Pakistan, Afghanistan and the decline of American power

October 18, 2008

On the floor of the New York Stock Exchange/Brendan McDermidDoes the financial crisis mark the beginning of the end of American global dominance? And if so, what would the decline of American power mean for Afghanistan and Pakistan? It’s early days yet, but here are a few themes that are emerging from the maelstrom.

If you put aside the many arguments over whether the Americans were, or were not, guilty of latter-day imperialism, you can find consensus on two main points: that the U.S. model of free-market capitalism has been sorely challenged by the financial crisis; and that America’s reputation as a military superpower has been tarnished by its less-than-successful campaigns in Iraq and Afghanistan.

In this respect, there are obvious parallels with the collapse of the British empire after World War Two, starting with its departure from India in 1947. Although Britain likes to think it won the war, its postwar situation carried all the hallmarks of defeat. It was virtually bankrupt and with the fall of Singapore to the Japanese in 1942 it had lost the myth of invincibility that allowed it to rule an empire on which the sun never set.  With neither the money, nor the credibility, to hold India by force in the face of a powerful Indian independence movement, it mustered as much dignity as possible for an emperor stripped of his clothes and left abruptly, partitioning the subcontinent into India and Pakistan on its way out.

File photo, cleaning the statue of Mahatma GandhiiLet’s assume for the sake of argument that this analogy works for the United States, and that it too begins to draw in on itself. The lessons of British imperial history suggest that when empires collapse, they do so not gradually, but in big leaps that create chaos for those left behind (for example in the estimated one million killed at Partition).

In an analysis in, Aziz Huq writes about how Britain, even after being forced to withdraw from India, only properly realised the limitations of its power in 1956, after its hopelessly miscalculated attack on Egypt following the nationalisation of the Suez Canal. “The country’s monetary weakness led directly to its military collapse in the crisis,” he writes. “The Suez fiasco … also marked the end of British imperial ambitions.”

This is not to suggest that the Americans are about to suddenly abandon Afghanistan and Pakistan.  In the short term, both U.S. presidential candidates Barack Obama and John McCain are committed to stepping up the campaign in Afghanistan. At the same time, Western leaders are already lowering their sights on Afghanistan, according to this analysis from Reuters Kabul correspondent Jon Hemming. In a country that is “famously unforgiving to foreign forces”, this may well have happened even without the financial crisis.

But it does suggest that whatever the next U.S. President decides to do about Afghanistan and Pakistan, it is unlikely to be smooth.

Iranian President Mahmoud AhmadinejadNow add into this mix the growing power of Afghanistan’s neighbours — Iran and Russia, traditional U.S. rivals buoyed up by petrodollars and so likely to benefit from the clipping of America’s wings that they have been dubbed along with Venezuela as a new “axis of oil“. Both Iran and Russia, along with India, supported Afghanistan’s anti-Taliban Northern Alliance when the Taliban were in power in Kabul, and are seen as likely to resist any attempt by the United States to seek reconciliation with the Taliban as a face-saving way out of the Afghan quagmire.

Then there is China, sitting on $2 trillion of foreign exchange reserves.  As I mentioned in an earlier post, Pakistan President Asif Ali Zardari just visited China to seek help to bail out Pakistan’s economy, in a trip that also marked out his independence from the United States. China has yet to fully show its hand in how far it intends to use its new-found economic might to exercise global political power.  But it’s worth remembering that the United States, when it rescued Britain from bankruptcy after World War Two, insisted on an end to British imperialism and a withdrawal from its overseas colonies. We don’t yet know what China will demand.

Does anyone want to hazard a guess how all this will play out? America’s status as the lone superpower looks vulnerable; Iran and Russia are loudly assertive, and China is quietly buying up the world’s economy.  Personally, I think there are so many variables that we can’t possibly know yet; but whatever happens, it’s likely to catch us by surprise.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Mere exploitation, or even less, the taking control of a territory is a failure from the beginning without social and institutional / regulatory development. The United States needs to establish a strong economic relationship with Pakistan, Iraq, Afghanistan, et cetera. That relationship would have the goal of raising the financial strength of the United States, both private wealth, and tax receipts to the United States Treasury. The terrible thing is that an administration, which was to be favorable to business has been an utter failure when it comes to promoting economic prosperity in, and for the places it occupies. We are not a friendly giant, but the proverbial bull in the china shop.

Posted by Mark John Hunter | Report as abusive

Merely exploiting, or worse, occupying a territory is a wasted of resources. There must be a return benefit to the nation, which takes a territory. The United States must invest in Iraq, Afghanistan, Pakistan, et cetera in ways which return economic stability and prosperity to the United States. The difficulty is that this administration has been a near complete failure at advancing ecnomic prosperity at home or abroad. The United States, instead of being a friendly giant, or a good body politic, is the proverbial bull in a china shop.
Institutions, regulations, market access, finance, and other methods can be used to advance an economy. Where are the best and the brighest to find the ways to make our economy, and those of the places we control to some extent prosper. The Bush adminsitration has for reasons of ideological purity shunned the best and the brightest.

Posted by Mark John Hunter | Report as abusive

Central Asia, Afganistan, Pakistan & India are the hot spots of the world right at this moment, but the eyes of the world should be on Eastern India and Bangladesh. Religious killings in India (Christian vs Hindu), ethnic Bengalis illegally crossing into India and Muslim fundamentalism in Bangladesh all are brewing to make an expolosive mix. India appears ahead now in the “Great Game” in Central Asia & Afghanistan, but I bet that the coming crisis in Eastern India inevitably will drain their resources away from endeavors in Central Asia at which point it must choose which geographical area is most important to them – they cannot handle both.

Posted by Alethia | Report as abusive

It’s the polling season. Which basically translates to hunting season for corrupt politicans in small states to go on killing spree. With a spineless government like Congress at the centre, there is a big ‘OPEN’ sign all over the place for such people in India.

Either way, after elections are done and a new government comes in power everything will go back to normal. I know this cause this is how it has happened before and this is how it will happen again.

Do note that minorities here are pretty much allowed to live (unless you count stuff like Chritians buying conversions and Muslims supporting terrorism) their life without any intrution from majority (Hindus), thanks to which India has the laws which makes it a working democracy in the first place (really, it won’t).

I mean religious killings happen in the west against minorities, that’s a different matter than unlike Christians, we don’t make a big deal out of it (we would but like I said.. Congress in power, useless, worthless, spineless.. bla bla.. list goes on).

Posted by Nikhil Sharma | Report as abusive

We have not lost in iraq or Afghanistan, to say so is a lie, In fact we have won on both fronts.

This article is weak and disturbing.

Go to iraq………..and af.

Posted by tim | Report as abusive

War is not over to say it is lost or won..its in expansion mode from iraq to afganistan to pakistan..its not diminishing..but expanding mind you..

Posted by Om | Report as abusive

“China is quietly buying up the world’s economy” – I dont think so. In my opinion, France and Germany are doing that.

@Alethia , There is no eastern India and western India. There is only one India. I think u added Eastern because you were confused by the country West Indies. It is west Indies and not Western India.

Posted by JK | Report as abusive

It is gross underestimate to say US is loosing its power. US has very strong democratic institutions that can catapult it back into the game. It is not a characteristic you can find in countries like Russia, China or Iran. Even in countries like India such institutions are taking shape and will take time to have better response times to large scale crisis.

Its totally immature to compare US with the Imperial British. After the world war 2 Britain lost significant colonies which greatly contributed to its resources. Unlike Britain which is a small Island, US is Geographically in an advantageous position. Also the population of 330 million or more of US constitute a very powerful testimony to the human spirit it can draw upon during the times of crisis.

China which is probably looking to make transition to a Democratic setup by 2020 will in fact face great deal of political challenges. Its current political setup is not sustainable in the long run.

A resurgent and aggressive Russia is a country to watch out for, as it is capable of indulging in power play on par with US.

Central Asia or Middle East are relevant to the world only to extent of the Oil resources they posses. There are indications that Oil will not remain the primary resource for Energy needs in future (say about 20 years from now). In such a scenario countries that have so far lived on petro-dollars will turn back to deserts. The so called ‘Great Game’ may be over even before it reaches it’s climax.

No doubt the world is heading towards multipolarity, but US will retain an envious position in future.

Posted by chanikya | Report as abusive

“Does anyone want to hazard a guess how all this will play out?”

America’s status as the lone superpower is cemented; Iran and Russia are mellowing, and China is quietly evaporating from the world’s economy. Personally, I think there are so many parodies that many can’t possibly comprehend it yet; but whatever will eventually happen, is no surprise, save for the ignorant with their hazardous guesses…

Posted by Indian | Report as abusive

‘Religious killings in India (Christian vs Hindu)’
— Inquisitionist propaganda,an Evangelist conspiracy(sic)

Posted by Indian | Report as abusive

I believe it’s been pretty well established that Iraq was a gross error in judgement. Our continued presence is also unwelcome there and the sooner we vacate that country
the better. With mixed feelings toward Afghanistan, I know
we cannot allow the Taliban/Al queda terrorists sanctuary.
Still, better to zero in on actual targets rather than expend our forces willy-nilly. Proping up a weak, corrupt government isn’t the way to go. Since the US isn’t an imperialistic nation, we have no designs on other countries, only the desire to have peaceful intercourse with nations around the world. Our alliance with Israel arouses animosity from the moslem fundamentalists, but
I don’t see how we can realistically nullify that commitment. But we should make every effort to help Israel obtain a reproachment with the Palistinians to
establish a basis on which both sides can build on.

Posted by schmendric | Report as abusive

The day US permitted BUSH to manipulate the FLORIDA 2000 result, US started sinking.
CLINTON controlled the world by ensuring LOW OIL prices, which took care of middle east, Venzuela and Bankrupted Russia.
BUSH, on his election, ensured that his patrons, the OIL and ARMAMENTS INDUSTRIES prospered. The IRAQ war FOfor their benefit.
Less said the better about DICK CHENNEY. He seems to believe that he is VICE PRESIDENT OF HALIBURTON NOT OF USA.



Posted by KVKS CHOUDARY | Report as abusive

Americans require some paronia to sustain themselves;
earlier it was clash of civilizations,then global warming
and now demise of capitalism and American hegemony.
NO Country can directly touch US. US is militarily far superior than any other country; China’s growth is dependent on exports to US.

But with graeter power comes greater responsilbility.
US gives its citizens the right to think and act independently;but subverts the will of entire nations.
The greatest enemies of US are its -: military equipment sales lobby and oil lobby.

US should teach its children to workhard not the blatant us aggression

Rise Of other countries does not imply the fall of US


“flap of butterflies wings can cause cyclone in texas”

Posted by manahar | Report as abusive

Its too early to write the demise of USA. Even today no country can come closer to it in terms of economic or military superiority. Yes they have made colossal mistakes in Iraq. But China (a US $2.5 trillion economy) or Japan (a $5 trillion economy) can’t replace USA (a $13 trillion economy) so soon. Most importantly, the US political, economic and military institutions are highly advanced and that will see its continued dominance. No country except Japan and India can come closer to USA.

Posted by Andrew | Report as abusive