Former Treasury Secretary Lawrence Summers warned of “troubling” signs that the US is losing global influence as other powers align together and win favor among nations not yet aligned.
(Bloomberg) — Former Treasury Secretary Lawrence Summers warned of “troubling” signs that the US is losing global influence as other powers align together and win favor among nations not yet aligned.
“There’s a growing acceptance of fragmentation, and — maybe even more troubling — I think there’s a growing sense that ours may not be the best fragment to be associated with,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin.
Summers was speaking on the sidelines of the spring meeting of global finance chiefs in Washington, where the key theme has been a warning about “fragmentation” of the world economy as the US and rich-world allies aim to reshape supply chains away from China and other strategic competitors.
“Somebody from a developing country said to me, ‘what we get from China is an airport. What we get from the United States is a lecture,’” said Summers, a Harvard University professor and paid contributor to Bloomberg TV.
Simultaneous to the spring meeting in Washington, hosted by the International Monetary Fund and World Bank, the president of Brazil — the world’s No. 12 economy — was visiting China, showcasing those two nations’ tightening relations.
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The semiannual Washington confab also follows a shock move by Saudi Arabia, Russia and other members of the OPEC+ group to cut crude-oil output — complicating the task for the US, euro zone and other developed nations battling to rein in inflation.
Deepening links between the Middle East and Russia and China — which recently brokered a rapprochement between Saudi Arabia and Iran — are “a symbol of something that I think is a huge challenge for the United States,” Summers said.
“We are on the right side of history — with our commitment to democracy, with our resistance to aggression in Russia,” he said. “But it’s looking a bit lonely on the right side of history, as those who seem much less on the right side of history are increasingly banding together in a whole range of structures.”
Washington will need to consider how to address this new challenge, he added. The structures of the IMF and World Bank will also be a key longer-term issue, he said. “If the Bretton Woods system is not delivering strongly around the world, there are going to be serious challenges and proposed alternatives.”
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