Posted on 29-8-2002

Beyond Bush's Unilateralism
by Hazel Henderson, June 2002, www.hazelhenderson.com

Another Bi-Polar World or A New Era of Win-Win?"

In my Building a Win-Win World (1996) I sketched a chilling future scenario
of a new bi-polar world: The USA vs. Other Member Countries of the UN. The
USA had finally pulled out of the UN, whose headquarters had left New York
for Europe.

Today we see the post-cold war hegemony of the USA as a unilateralist
single superpower and George W. Bush's global, open-ended declaration of
"war on terrorism and evil." After 9/11, Bush stampeded the US public and
media into supporting him by offering no alternatives. In my 9/15
editorial, "Mr. Bush's Win-Win Option" I called for Bush to pay the US back
dues owed the UN; to designate the terrorist attacks as criminal genocide,
and seek UN cooperation in bringing the perpetrators before the World Court
in The Hague.

Meanwhile the Bush administration's unilateralism has shifted into even
higher gear. After the unprecedented US "un-signing" of the International
Criminal Court (ICC), the US is now seeking UN Security Council action to
exempt the USA from ICC jurisdiction. Bush continues to abrogate treaties,
including those on chemical and biological weapons, as well as the ABM
Treaty so as to continue developing "Star Wars II" missile defense. Bush
has targeted UN top officials including Mary Robinson, UN High Commissioner
for Human Rights, Robert Watson as Head of the Inter-government Panel on
Climate Change and Jose Bustani who headed the Organization for the
Prohibition of Chemical Weapons. Meanwhile, Sen. Jesse Helms is reviving
his efforts to prevent further payment on the over $500 million of back US
dues still owed to the UN, and right-winger John Bolton of the US State
Dept. is even targeting Secretary-General Kofi Annan.

Bush's dangerous "global war" cannot be checked by US voters, since
democratic machinery has been pre-empted by moneyed corporations and
powerful financial interests, compliant commercial mass media, pollsters,
lobbyists, etc. The two major US political parties are both captives (the
Republicans of earlier industrial, fossil-fuel sectors; the Democrats of
later-stage sectors: telecoms, biotech, computers, media, Hollywood, etc.).
Over 40% of the US public is independent - yet the rules are stacked
against third parties.

The United Nations is one of the pre-eminent social innovations of the 20th
Century and must form the basis of a reformed multi-lateral system. My
recommendations for reforming current international institutions,
revitalizing the UN and expanding civic society are summarized in Beyond
Globalization (1999). A more balanced world order must center on reforming
global finance, taxing currency exchange and reducing the US dollar's
unsustainable role as the world's de facto reserve currency (which is
destructive for all countries -- even the US itself). I favor a global
reserve currency regime based on the parity of the US dollar and the euro.
The fundamentals in the USA and the EU suggest that the G-8 has an
opportunity to peg the dollar and the euro into a trading band. This,
together with the new issue of SDRs, proposed by all the IMF country
members, promoted by George Soros and opposed only by the USA, would lend
to more stable currency markets.

Presently, even though the EU and China have the economic clout to
challenge US unilateralism -- so far, neither has attempted to check Bush.
Latin America is still divided in spite of Venezuela's Hugo Chavez
herculean efforts to encourage greater integration and policy coordination
and his leadership of the G-77. Latin American countries stood by Chavez
and Venezuelan democracy in the face of the right wing military coup (which
the Bush Administration approved and may have assisted). Yet, the USA
continues to exhibit many vulnerabilities since 9/11: to suicidal terrorist
attacks (due to its Middle East policies) to its dependency on imported
oil; new revelations about Wall Street since Enron, accounting scandals;
widespread corporate over-stating of profits and eroded trust in US capital
markets - added to the bursting of the "dot com" and "New Economy" stock
bubbles and the declining dollar.

The most likely end to US hegemony may come about through a combination of
high oil prices (brought about by US foreign policies toward the Middle
East) and deeper devaluation of the US dollar (expected by many
economists). Some elements of this scenario:

* US global over-reach in the "war on terrorism" already leading to
deficits as far as the eye can see -- combined with historically-high US
trade deficits - lead to a further run on the dollar. This and the stock
market doldrums make the US less attractive to the world's capital.

* More developing countries follow the lead of Venezuela and China in
diversifying their currency reserves away from dollars and balanced with
euros. Such a shift in dollar-euro holdings in Latin America and Asia
could keep the dollar and euro close to parity.

* OPEC could act on some of its internal discussions and decide (after
concerted buying of euros in the open market) to announce at a future
meeting in Vienna that OPEC's oil will be re-denominated in euros, or even
a new oil-backed currency of their own. A US attack on Iraq sends oil to
EUR40 per barrel.

* The Bush Administration's efforts to control the domestic political
agenda backfires. Damage over the intelligence failures prior to 9/11 and
warnings of imminent new terrorist attacks precipitate a further stock
market slide.

* All efforts by Democrats and the 57% of the US public to shift energy
policy toward renewables, efficiency, standards, higher gas taxes, etc. are
blocked by the Bush Administration and its fossil fuel industry supporters.
Thus, the USA remains vulnerable to energy supply and price shocks.

* The EU recognizes its own economic and political power as the euro rises
further and becomes the world's other reserve currency. The G-8 pegs the
euro and dollar into a trading band -- removing these two powerful
currencies from speculators trading screens (a "win-win" for everyone!).
Tony Blair persuades Brits of this larger reason for the UK to join the euro.

* Developing countries lacking dollars or "hard" currencies follow
Venezuela's lead and begin bartering their undervalued commodities directly
with each other in computerized swaps and counter trade deals. President
Chavez has inked 13 such country barter deals on its oil, e.g., with Cuba
in exchange for Cuban health paramedics who are setting up clinics in rural
Venezuelan villages.

The result of this scenario? The USA could no longer run its huge current
account trade deficits or continue to wage open-ended global war on
terrorism or evil. The USA ceases pursuing unilateralist policies. A new
US administration begins to return to its multilateralist tradition, ceases
its obstruction and rejoins the UN and pursues more realistic international
cooperation.