Former US Secretary of the Treasury
“Someone from a developing country once said to me, ‘What we get from China is an airport. What we get from the US is a lecture’”
Bloomberg April 14, 2023 6:30 pm Updated 10 hours ago
NEW YORK, NY JANUARY 30: Former Treasury Secretary Larry Summers visits FOX Business Network at FOX Studios on January 30, 2015 in New York City. (Photo by Rob Kim/Getty Images)
(Bloomberg) Former US Treasury Secretary Lawrence Summers has warned of “worrying” signs that the US is losing global clout while other powers are joining other nations and gaining ground.
“There’s a growing acceptance of fragmentation and, perhaps more worryingly, I think there’s a growing sense that it’s not the best ‘fragment’ to connect with us,” Summers told Bloomberg Television on Wall Street Week .
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Summers spoke amid the meeting of global finance leaders in Washington. The main theme was a warning about the “fragmentation” of the global economy as the US and its wealthy allies around the world seek to reshape supply chains away from China and other strategic competitors.
“Someone from a developing country once said to me, ‘What we get from China is an airport. What we’re getting from the United States is a lecture,'” said Summers, a Harvard University professor and Bloomberg TV contributor.
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Coinciding with the meeting in Washington organized by the International Monetary Fund (IMF) and the World Bank, the President of Brazil the world’s 12th largest economy visited China to demonstrate the closer ties between the two nations.
The biannual meeting in Washington also follows a surprise move by Saudi Arabia, Russia and other members of the Organization of the Petroleum Exporting Countries and Allies (OPEC+) to curb crude oil production making the task of containing inflation more difficult for the US zone and euro other industrial nations.
The deepening of ties between the Middle East and Russia and China which recently brokered a rapprochement between Saudi Arabia and Iran is “a symbol of what I see as a major challenge for the United States,” Summers said.
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“We are on the right side of history with our commitment to democracy, with our opposition to Russian aggression,” he said. “But we seem to be a bit lonely on the right side of history as those who seem far less on the right side are increasingly coming together across a whole range of structures.”
Washington must consider how to meet this new challenge, he added. The structures of the IMF and World Bank will also be a key longterm issue, he said. “If the Bretton Woods system does not work well around the world, there will be serious challenges and proposals for alternatives.”