In this global crisis, the U.S. has opportunity

updated 7:16 p.m. ET Dec. 14, 2008

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."

Brzezinski said he believes "we have the chance again to establish our legitimacy internationally."

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.

Analysts say the downturn has led Chinese leaders to put their top emphasis on protecting the domestic economy, including establishing a $586 billion plan to create public works jobs.

"In the long term, the economic crisis could decrease their investment in terms of defense, which had been rising very sharply. On the down side, it kind of reverses the U.S. approach to try to engage them more globally as China turns more inwardly," said Steven Schrage, a former Bush administration trade official now with the Center for Strategic and International Studies.

Also, U.S. multinational companies need an economically healthy China as a market for their own goods.

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.

In Venezuela, it could help reduce the funds available for policies that threaten U.S. interests. That could include President Hugo Chavez's aid program for left-leaning Latin American governments.

In Iran, already isolated economically through international penalties, falling oil prices have dealt a hard beating to the country, helping further erode the popularity of Iran's hard-line president, Mahmoud Ahmadinejad, ahead of a tough re-election battle next year.

Ahmadinejad, already under sharp criticism for his unpopular economic policies, said this month that the oil-price plunge will force the government of the world's fourth-largest oil exporter to make painful spending cuts.

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