The financial crisis of 2008 altered the balance of both economic and political power in the world, according to former US secretary of state Condoleezza Rice.
Giving the keynote presentation at the Institute for Supply Management annual conference in Texas, Rice – now a professor at Stanford University – said the crisis was as big a shock to the concept of economic prosperity and security in the US as the 9/11 terrorist attacks were to the nation's idea of physical security.
“It has left imprints and impressions on the global balance of economic power and when you have changes in the balance of economic power, you will inevitably have changes in the balance of political power, too,” she said.
She was downbeat about the EU's prospects of tackling problems with the Eurozone. “Europe can't integrate further and it can't disband, so it will do what politicians tend to do and keep stumbling from crisis to crisis. They'll just keep [coming up with a temporary solution] and each time the crisis will get deeper.”
Rice added the BRIC nations (Brazil, Russia, India and China) will also have trouble adjusting to the economic landscape. Russia, she said, should not be considered a BRIC, instead “think of it as a global oil and gas syndicate”. India and Brazil will struggle to realise their potential because of “the stultifying influence of state interference”. And China faces “a demographic bow wave” as a result of its one child policy and growing demands for democracy.
The US, she said, needs to “mobilise its human potential”, such as creativity, innovation and technology, but also needs to improve skills and education to create jobs at home.
“The crisis in education is the single biggest national security crisis we face because if we don't educate our kids, we will continue to have people who are unemployed and we will rip ourselves apart. Because when your national creed is 'it doesn't matter where you come from, it matters where you're going' – you can come from humble circumstances and do great things – it had better be true,” she said.
Rice concluded the US has a lot to do to come out of the multiple global shocks –terrorism, the financial crisis and the spread of democracy – “in good shape”.
“But I am an optimist about our ability to do this,” she said, “because the USA has a way of making the impossible seem inevitable in retrospect.”