Читать книгу World Politics since 1989 - Jonathan Holslag - Страница 20

In the 1990s, the West represented 60 percent of the world’s economic production and 50 percent of its manufacturing, with around 13 percent of the world’s population (see table 1.1). In the subsequent decades, that dominance diminished. It coincided with a decrease of public satisfaction with the state of the country (US only) and of trust in politics.

Economic weakening has important external consequences. The smaller a country’s share in the world economy, the more difficult it becomes to wield influence, because partner countries find alternative customers for their exports, alternative lenders, and alternative investors. In the last decade, table 1.1 shows, an average country still had around 26 percent of exports bound for the West, 39 percent of its loans coming from the West, and 51 percent of its foreign investment. The West remained a crucial economic partner. But its position was clearly eroded. This was also true for its military power. The global preponderance enjoyed in the years after the Cold War drew to an end and this relative weakening inevitably empowered other countries as security actors.

Despite economic decline, Western economies were resilient. Trade grew and so did domestic production. But it is clear that economic growth between 2010 and 2019 remained slower than in the previous 20 years (figure 1.2). The resilience of trade, an important element of globalization, did not always coincide with strong production growth. Western countries participated intensively in globalization, but their economies started to grow more slowly. There was also a large gap between globalization and production on the one hand, and the real disposable income of households on the other. The real disposable income is what households can spend, corrected for inflation. If incomes increase, but products and rent become more expensive, the real disposable income increases much more slowly or might even decrease. Particularly the poorest 40 percent suffered. Their real disposable income has had virtually no growth since 2000. Over the 30 years, their real disposable income growth was just 25 percent.

Figure 1.2 Selected growth indicators for the West (%)

Note: Figures for EU28 and US. All income figures are inflation-adjusted. The income figures for the bottom 40 concern the unweighted average of real disposable incomes for the US, the UK, France, and Germany.

Sources: WDI, BEA, SOEP, INSEE.

Western countries experienced a decline of their power and a growing gap between economic growth and purchasing power. The full impact of this weakening was mitigated by growing external debt. The majority of Western countries imported more than they exported. Later, we will discover that these imports primarily concern fuels from Russia and the Gulf States, consumer goods from China, and cars alongside other machines from Germany. If we accumulate the current account deficit throughout the three decades, it amounts to US$14 trillion, five times the size of the economy of the United Kingdom (figure 1.3). The current account includes trade and investment incomes. Germany and the Netherlands were key exceptions with large surpluses. Large, structural deficits can spark painful adjustment crises in the long run. Think of the tale by Jean de La Fontaine, about the ant and the grasshopper. When the cold winter kicks in and the industrious ant is not willing to help, the vulnerability of the grasshopper becomes visible.

Figure 1.3 The evolution of the net international investment position (US$ bn)

Note: US and EU countries. Germany and the Netherlands are set apart given their exceptionally large surplus.

Source: WDI.