The Role of US in the New World Order

The US is still world's number one, but the rest of the world is visibly crowding into that position once-thought unshakable. Brazil, Russia, India and China, collectively called BRIC, are gaining in political and economic clout to which the even mighty US needs to take conceding steps at times. The US economy as a percentage of the world has shrunk from 30% in 1998 to 25% in 2007, and the expected continuing shrinkage has given rise to the "decoupling theory" that the rest of the world, in particular Asia and China, no longer needs a strong US economy to function independently. As a whole, the European Union has overtaken the US in nominal GDP, thanks in large to a stronger euro.

In 2007, Toyota Motors officially dethroned General Motors to claim the crown of the world number one automaker, much to the continuing chagrin in the heart of America that started in the early 80s. Boeing, another perennial US power house, has been facing strong challenges from France's Airbus, and Brazil's Embraer is the third largest plane maker and the dark horse to make more interesting the competition in the world airplane builder industry. The latest setback come from the unlikely source of US Air Force who awarded the $35 billion aircraft contract in favor of KC-30 tanker of Nothrop Grumman and EADS (maker of Airbus) for being "better perfomer" than the Beoing-build KC-135 it is set to replace. Perhaps these events are merely symbolic in nature with little immediate economic consequences, nevertheless they are indicative of US businesses loosing a little bit more of edge.

The 2007-08 credit crunch exposed a great vulnerability in the core of the US financial system - too much debt, too much leverage and too much risk. ???To the dislike of Congressional members, the sovereign wealth funds from Abu Dhabi, China and Singapore, have dished out multi-billion capital to help the like of gargantuan US banks like Citigroup and Morgan Stanley. Brazil is now a creditor of US and its Brazilian real is one of strongest currencies. In an ironic role-reversal, the strong-arming US economy is now the prey being caught by the cash-loaded emerging nations at a moment of weakness.

More than about maintaining world supremacy, the greater concern is about functioning correctly in the new world order which the US alone can no longer dictate. Once dominant and supreme, the US will be forced to face the new reality and to reassess its changing role as the world's reigning number one.