Joanne Knight

January 14, 2009

The Globalised President

Filed under: international relations — joanneknight @ 10:51 pm
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In a globalised world the United States has enormous influence through international agencies. The United States has used and abused its power at the expense of other countries, particularly developing countries, and a change of President will do little to alter that without the political will. Born in Hawaii to Kenyan/ American parents, and educated in Indonesia, Hawaii and the United States, President-elect Barack Obama is being called an internationalist. The unprecedented attention this election has attracted reinforces the idea of a globalised world. Despite the global reach of this Presidential power, this position is chosen by less than 5% of the world’s population.

Fredrik Erixon, director of the European Centre for International Political Economy, believes that the Obama will cooperate with international institutions in contrast to the Bush regime, but there are influences within the United States which will still assert that the interests of the United States takes primacy over all others. For example Obama must deliver new markets to United States businesses if he wants Republican support in Congress.

In developing countries like those in Africa there is hope of a change of policy. ‘The current administration has had a high level of aggression and resistance to fundamental concerns from developing countries,’ said South African deputy Trade Minister Rob Davies.

With the growing influence of international organizations, like the World Bank, the International Monetary Fund, and the World Trade Organisation, countries and transnational organisations (including corporations) compete with each other under increasingly complex regulatory regimes. Winton Higgins, Research Fellow at University of Technology Sydney, argues that the United States so overshadows this new system that, to a large extent, the new regulation amounts to Americanisation. ‘The institutional forces, the fundamental rules of the game of the rulemaking process in our world also reflect undeniably the power of American actors, groups, networks, and cultural blueprints,’ he argues.

The United States has misused its power on various international bodies such as the IMF to forward its own trade agenda at the expense of other countries, particularly developing countries. The United States has effective veto power on the IMF and World Bank. Voting rights on the IMF are apportioned according to the size of each country’s economy and contribution to the fund’s capital stock. The United States has the largest vote on the board of 17%. Fifteen percent of the vote is needed to block any proposal. In the 1990s, under pressure from United States and other major shareholders, the IMF aggressively pushed developing countries to eliminate capital controls and de-regulate their financial sectors.

While the United States has recently abrogated its right to choose the President of the World Bank, it effectively has a veto on some decisions with just over 16% of the shares in the bank; moreover, decisions can only be passed with votes from countries whose shares total more than 85% of the bank’s shares. The United States is the only country which requires Congressional approval of the three-yearly pledges to International Development Association which gives powerful interest groups, such as cotton farmers and baby formula manufacturers, ample opportunities to impose conditions on the United State’s contribution to IDA and thereby on the Bank as a whole. The large majority of Bank economists have a post-graduate qualification from a North American university, whatever their nationality.

With the spread of democracy around the world from Southern Europe to South Asia since the mid-1970s, most countries have the institutional facilities to participate in a world election. The other option is for countries to take advantage of the current United States weakness to force it to relinquish some of its power on international bodies. China may in fact be taking such a line, pressuring the United States to give up its control over the IMF in return for help in the economic crisis. The Chinese Prime Minister, Mr Wen Jiabao, said that developing countries should have a stronger say in the financial system.

Globalisation has placed us in the position where the activities of one nation can affect intentionally or unintentionally every other nation on earth. The decisions of one powerful man can have a global impact. It seems we all have a stake in who controls this power. Let us hope that Obama’s dream of equality extends to the whole world.


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