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Malakhova Tatiana Sergeevna, Kuban State Universityy associate professory the Faculty of Economics E-mail: [email protected] Kolesnikov Nikita Pavlovich, Kuban State Universityy master of science, the Faculty of Economics E-mail: [email protected]
TRENDS AND CONTRADICTIONS OF THE GLOBAL ECONOMY CRISIS AND TRANSFORMATION OF THE WORLD FINANCIAL INSTITUTIONS
Abstract: In the current conditions, the economic, political and technological shift from West towards East has a significant impact on the balance of power in the world, which leads to the formation of new centers of competition and commonwealth. In conditions of global turbulence, it has become obvious that management of global system is virtually impossible from a single center of power. In view of that, it would be unreasonable to overlook the role of international financial institutions in spreading of economic crises across an economic bloc or the world economy.
Keywords: vanguard, periphery, forms of interaction, world economy, geostrategic economic block, financial institutions, financial mediators, financial crisis.
At the beginning of 21-st century, the problem of institutional building for global management has been exacerbated, which has received a wide acclaim in the world community in the middle of 20-th century. The dynamics of globalization processes had profound impact on uneven development of particular countries and world regions. In this regard, it is essential to examine in which direction the balance of power in the world will change, as well as which countries are able to overcome crisis in the world's economy.
We live in the world, where a dominant position is not acquired only by superpowers, as it was in a bipolar system, but also by emerging geostrategic economic blocs that sought to assert their positions in global economic and political spheres. With the creation of a multipolar system and emergence of the new centers of power structural problems of the key world's economies like USA or EU worsen. Unfortunately, geopolitical confrontation comes again
to the forefront, which affects economic relations between countries. The world economic system, dating from the mid 20-th century has been characterized by a tense confrontation between socialism and capitalism, which was developing for a variety of patterns [1]. International economical and political relations at the time were bipolar, largely because of confrontation between two great powers - USSR and the USA. The question is: "Is bipolarity possible in the modern world?" From the point of view of prof. V. V. Perskaya, it is possible, in case that external and internal condition will be conducive to it [2].
According to a number of experts, the USA and CPR economies may act as poles of the world economy. Still, we would like to emphasize that the beginning of the 21-st century is characterized by creating a multipolar system led by numerous centers. At the same time, the concept of superpower, in our view, is a phenomenon of the bipolar system period when USA and USSR were clearly marked as leaders. In the
present circumstances, a core with a potential leader forms up, around which the periphery countries concentrate. Only in modern conditions they are not oriented towards the ideological dimension, but on the weight and importance of a leader in the global economic and political sphere. Therefore, instead of the concept of "superpower" we suggest the concept of "geostrategic economic bloc (GEB)" [3]. We suggest author's definition of this notion in context of creating the multipolar system. Geostrategic economical bloc - is a union with partner countries (periphery) formed at the initiative of a dominant country with a purpose to assert interests of the first one and to increase their influence in a global politico-military, economic, monetary and financial spheres met with the periphery's resource base, which in turn leads to the multipolar system chaired by particular centers of contention and commonwealth [4].
We shall highlight three key geostrategic economic blocs: NAFTA (dominant country - USA), EU (dominant country - Germany), East Asia (dominant country - China). Two of them have already been established - EU and NAFTA. There is a distinct politico-military and economic leader in every highlighted bloc (USA, Germany, China). Their purposes are nearly identical - to orient as many states as possible towards their side. If in the Soviet period countries were oriented towards the ideological dimension, nowadays they rely on dominant countries position in the global sphere. In addition, lead countries, i.e. USA, Germany, China have in common that they use expansionist strategy in monetary and financial spheres, banking and that their TNCs and TNBs distribute their affiliated companies all over the world.
We also note that with establishment of geo-strategic economical bloc, positions of the USA are being dispersed and their weight in the global sphere is gradually declining. In the present circumstances, USA is one of the centers of power, which can't help having influenced on their reputation in the medium and long terms. The main reasons for the reduction of military and political domination of
the US in the transformation of the global scope are: strengthening the position of the Asia-Pacific region, particularly China, Japan and some new industrial countries; the formation of integration groupings and international organizations in opposition to the US; approval of the positions of individual countries in the military-technical sphere, in particular Russia, Germany; reducing costs to the national US Department of Defense military-industrial complex. In addition over the past more than ten years, there is a tendency to reduce the share of the US in world GDP. This situation is symptomatic of the fact that in the global financial and economic system the United States was the largest debtors. It can be stated that in the present conditions, new competition and community centers, led by selected Asian and European countries. China has formed a modern infrastructure in some sectors of the economy, new factories and enterprises are opening, focusing on creating innovative products. It is also necessary to emphasize that the monetary and financial system of China has been able to combine a high degree of openness to strict national control. In addition to the above, the Asia-Pacific region rather calmly, «survived» the first wave of modern global monetary and financial crisis.
It is logical that the neo-liberal model of the market economy yields its positions and is being criticized by the expert community. In general, the ideas of the neo-liberalism were applied during the transformation of the countries of the Central and Eastern Europe. They served as the basis for reformation of the Russian economy, without taking into account specificity of its forming and historical development. As almost every dominant country assumes, there is no country that can solve successfully its structural problems in context of the globalization. By uniting with partner countries (periphery), they put emphasis on ensuring complementarity and mutual benefit, taking into account national interests of every partner. Yet matters are different in practice.
The sanctions, which have been imposed against Russia, have exacerbated the structural problems
of the Russian economy. The social and economic development of the country is conditional upon external factors, in particular, on fuel prices, on the modalities of participation in WTO, on the global economic crisis. All these factors have a negative impact on the national economy development. The first wave of the global crisis became a breaking point for lot states of the world, including Russia. In conditions of the turbulent state of the world economy and worsening of the geopolitical relations of Russia in the world, it becomes harder year by year to restore the national industrial landscape, which was lost in the end of 20-th century. In the present conditions, Russia operates in different international groups, EEMA, CIS, BRICS. Still, under modern circumstances it is hard for Russia to confront the existing or forming blocs [5]. Within CIS and EEMA Russia is not able to accept the role of a leader, that's why we can consider these unions only as a platform for constructive negotiations. The main goal of CPR is limiting of the dominating position of American dollar, which gives USA advantages towards other participants of the world economic system, as well as accelerating of the internationalization of the Chinese national currency - Chinese yuan. For this reason, only countries most powerful and that are able to regulate world economy can radically solve complicated problems that are on the agenda [6].
Moreover, we have defined possible scenarios of cooperation of Russia with particular countries and regions of the world after cancellation of sanctions or their weakening: collaboration with key players in a global economy (USA, Germany, Japan, China etc.); reorientation of the national economy on the Asian market and collaboration with partner states in this region; increased interaction with partner countries within BRICS, CIS and EEMA etc.; restoration and development of the close cooperation with EU, or emergence of the geopolitical positions onto Eurasian space. We suggest that in under circumstances of the global instability it is necessary to improve cooperation with EU because both Russia
and EU need a truce. There are two models of including countries in world economy represented in the academic work of R. S. Grinberg and L. S. Kosikova "New trends of the economical collaboration in the post-soviet space" - integration and adaptation [7]. It is showed that the mixed model of collaboration with post-socialistic countries is most useful, while it allows to take into account geopolitical and geo-economical interest of Russia in context of the global instability.
Finally, an important, if not a superior, role of finance in the today's global economy should not be overlooked. Today's finance functions are not limited only by the mediation of the exchange of goods and services or by fulfilling the role of economy's circulatory system - it occupies the primary role in managing medium and particularly large businesses, as well as in government regulation of economy. The cause of this was reaching the limits of capital accumulation in economy with regard to the progress in the science and technology, and consequently, price rise of technologies, lengthening the production cycle and appearance of mass production, resulting in release of a large amount of money resources. It was caused by the massive accumulation of temporarily spare monetary resources by banks and other financial intermediaries.
Iffinance is considered as a factor of forming and developing of geostrategic economical blocs, it is obvious that it plays a key role as well as political, cultural, territorial and general economic factors. Such integration generally takes place by creating a supranational financial institution, the examples of which in the modern world are the ECB, the New Development Bank, the Eurasian Development Bank etc. However, the consequence of such integration can be spreading of financial crises, which arise in financial institutions of one bloc member country and proliferate across whole integration, or, in the worst case, across the whole world economy, as was the case with the US investment bank Lehman Brothers in 2008. Today's most risky financial institution not
only for the Eurozone, but for the world economy of financial derivatives, which are the main source of
as well is Deutsche Bank due to its colossal amounts crises in financial system.
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