news Global woes pose risks, also openings for US

[dalajune]

WASHINGTON – The economic slump roaring across the world's geopolitical map poses weighty challenges, as well as some unexpected opportunities, for President-elect Barack Obama.

Japan and major European countries have joined the United States in falling into recession. China has seen its remarkable three-decades long export-fueled rise slowed. Oil-based economies on Washington's worry list such as Iran, Russia and Venezuela, are reeling, too.

The U.S. led the rest of the world into the economic crisis, and many global players hope Washington can lead the world out. International investments pouring into low-interest U.S. Treasury securities in recent weeks show that, even if the U.S. has lost prestige internationally in recent years, it's still deemed one of the safest places to park money.

The financial crisis drives home to other nations that "without an America that is successful financially, economically and therefore also politically, they're not going to be successful," said Zbigniew Brzezinski, who was national security adviser to President Jimmy Carter. "If we don't function well, no one functions well."

China had been on track to surpass Germany as the world's largest economy after the U.S. and Japan. But last week Beijing said its November exports took their biggest plunge in seven years in the face of weakening demand from the U.S. and other wealthy countries.

While China does not yet appear to be in recession, many factories have closed, raising the threat of heavy job losses that could fuel political unrest.

The effect of the dive in world oil prices — to under $50 a barrel from a high of $147 a barrel in early July — can work to the advantage and disadvantage of the U.S., analysts suggest. The economic slowdown may cut into the ability of militant groups based in the Middle East of financing terrorism operations elsewhere. But plunging oil prices will make it harder for Iraq to finance needed renovations to their oil fields and could affect the ability of states friendly to the U.S. to bankroll anti-terrorism programs.