The two decades after 1989 —the year the Berlin Wall fell — is described by some as the 20 years of Capitalism. And next year will mark the commencement of the third decade with global capitalism having hit rock bottom— zero point or thereabouts. To Vladimir Putin the former Russian president and now the prime minister, the collapse of the Soviet Union marked by the fall of the Berlin Wall was the ‘Greatest geopolitical catastrophe of the 20th Century’. To others it has been a remarkable development with the people in Russia and other republics of the former Soviet Union being freed from the dictatorship of the Communist Party, most of them becoming independent republics. Ten Eastern and Central European countries have joined Western Europe and over the two decades attained fast rates of economic growth. Resultant economic woes and other problems such as unemployment was the price paid for the freedom of the people, it is claimed

Great expectations

Great were the expectations of many outside the Socialist countries—though not necessarily of diplomats and many socialist leaders— at the end of the Cold War. Disarmament would free billions of dollars for the betterment of humanity particularly of the developing world. Poverty stricken Asian, African and Latin American masses expected the billions that were diverted to armaments would be used for the alleviation of poverty. The age old dream of converting guns into butter was revived. But that did not happen. Instead the belief of Nazi Leader Josef Goebbels seems to hold on: Guns will make us more powerful, butter only make us fat.

There are few or no hopes for a better world in 2009—at least economically. The new American President Barack Obama will commence his term of office next January with a budget deficit projected at one trillion dollars whereas his predecessor George Bush   inherited a comfortable budget surplus.

Obama’s woes

America the most powerful economy in the world is staggering on is feet. So are its allies in Western Europe and Japan. China, India and Brazil—the emergent economies— are dependent on American and European markets for their products and even though China with its huge domestic market could cushion a part of the impact millions will be thrown out of employment. Poor countries in Asia and Africa will not feel the full impact of the global financial meltdown because the great majority of the poor people are dependent on subsistence agriculture but the middle classes that have acquired tastes of western consumerism will feel the pinch.

The alarming feature about the current financial crisis no one is certain of when or how the end of the crisis would come about. There are many pundits who can say what went wrong and what could be done. Unbridled greed to make money, lack of regulatory controls, removal of checks and balances are attributed causes. Infusion of billions and even trillions of dollars into failed financial and industrial institutions is now under way but none say when these infusions can resuscitate the economy.

To a layman this financial rescue operation looks like a patient on an operating table with the world’s best surgeons around but none are certain about what could cure the patient.

Political analysts point out that deamnds on Barack Obama by his own Democratic Party will be great, the party having been out of office for eight years. But Obama’s main task will be to patch up the deteriorating economy, Millions are being thrown out of employment, businesses and industries are closing down. It is certainly an unenviable position for a new president to be in.

Foreign policy challenges

In foreign policy Obama has to end the two wars commenced by George Bush. Pull out of American troops without the basic objectives of the reasons going in being fulfilled will not be to the liking of the American public. And now on his plate will be the Mumbai terrorist massacre with the two American allies Pakistan and India at logger heads. Pakistan is a too strategic and faithful ally to be ignored while India now the centre piece of American strategy created by the outgoing president cannot be given less priority than Pakistan.

Meanwhile there are immediate global issues such as globalisation, global warming and international terrorism that demand attention. However Obama’s priority would be the financial crisis. It is quite apparent that he would stand or fall on how he fares in tackling this issue.

The global crisis is converging on Obama. All countries, big and small are waiting what his decisions would be.