There was a time  many years ago  when Time magazine was considered to be an American and international "institution." That explained why the world’s movers and shakers paid a lot of attention to the individual that the founder Henry Luce and his successors picked as the magazine’s Man of the Year.

That choice  basically announcing who was the persona that had the power to change the world  reflected the wisdom prevailing then among the political and corporate elites, located mostly in New York and Washington.

But gradually, Time magazine was transformed from that institution into the older and serious brother of People magazine, and now it has become, for all practical purposes, the Lenin Mausoleum of American journalism, an institutional corpse that is being preserved for some reason (prestige?) while People magazine, HBO and other media outlets keep the parent company in business.

Which leads one to ask: who really cares who or what Time selects as their person or "thing" of the year? I certainly don’t. But I’m nevertheless curious. Last year, the magazine opted for "You" as the Person of the Year, rejecting the "Great Man" theory of history according to which the powerful and the famous are the ones who shape our collective destiny as a species, and suggesting that instead in this age of globalization it’s "You"  the individual consumer of information  that was taking control of political and economic events.

This year, Time, perhaps disappointed by the impact that "You" seemed to have on our lives, decided to adopt a the traditional approach, and has selected a real person as its annual shaper of destiny  Russian President Vladimir Putin.

So we seem to be regressing to the reactionary "Great Man" theory of history. Mr. Putin is expected to evoke the memories of such Russian historical giants as Peter the Great and Comrade Joseph Stalin.

Personally, I’m not as impressed with the new tough-talking man in the Kremlin. Yes, Russia with its huge energy resources and large territory and population is reasserting its influence as one of the world’s great powers.

But it is not emerging as a major economic and military "threat" to the US and it is certainly not posing an ideological challenge to the West as the Soviet Union did.

No, we are not about to enter a new Cold War, as Time seems to imply. The new assertiveness of Russia is just another sign that we are gradually moving towards a multi-polar international system  although we are not there yet.

In fact, if I had to choose the "Thing" of the Year, I would have selected the move by the Government of Singapore Investment Corporation and the "unidentified Middle East investor" to inject a few billion dollars into the financially troubled Switzerland-based UBS, the fourth-largest European bank, as a clear sign that the balance of global economic power is changing in a very dramatic way.

The vast pool of financial wealth in East Asia and the Middle East  represented among other things by the Sovereign Wealth Funds (SWFs) is being poured into the world’s largest financial institutions.

It all reads like a chapter from a volume of Alternate History: China Investment Corporation acquiring a 10 per cent stake in Morgan Stanley. The Abu Dhabi Investment Authority bailing out Citicorp. A Chinese government-controlled bank making a huge cross-investment in Bear Stearns and investing US$3 billion in the Blackstone Group, a private equity fund.

At the same time, Middle Eastern companies have been establishing a financial foothold in global financial centers like the NASDAQ and the London Stock Exchange as well in non-financial empires like Sony.

It’s very difficult to make sense of these and other developments taking place in the global economic arena and to try to figure out if and how China and other emerging economies are going to translate their growing financial power into global political influence.

That the domestic political-social balance of power in these nation-states remain fragile and that their long-term economic development is uncertain, explain why one cannot promote with much confidence Welcome-into-the-China-Century grand forecasts.

While China, the Middle Eastern oil-producing countries and other emerging economies in East Asia and the Middle East, as well as in Latin America (Venezuela) may be challenging American global supremacy, the United States remains central to the global economic and military infrastructure, and there are no signs that any of the rising powers, including the European Union (EU) is ready to replace Washington in the driver’s seat.

That is not to deny that America continued to experience serious economic and military setbacks in 2007. In addition to pushing the US economy towards a recession, the housing market crisis and the credit crunch  by exposing the dark side of the interaction between policymaking and business in the US  have raised serious questions about the notion promoted by Washington that the American liberal economic system should serve as a model for the economies of Latin America and the Pacific rim.

Moreover, economists are debating now whether the problems facing the US economy are cyclical or structural, whether the eroding power of the US dollar is just a part of the process of rebalancing the global financial system, which will make it possible to cut America’s trade and current-account deficit, or whether the weakening US currency is a reflection of a long-term deterioration of its economic fundamentals.

It’s doubtful that we will find out an answer to these question in 2008. More likely, as the US continues to print more dollars, the American economy will continue to muddle through.

Similarly, the US military "surge" in Iraq, coupled with the growing expectations that America is not going to attack Iran in 2008 and that the Israeli-Palestinian peace will continue to "process," will allow the Bush Administration will sit out most of next year without igniting a major explosion in the region that could put even more downward pressure on the US geo-strategic position and bring about a massive increase in energy prices, unless that is, Israel decides to attack Iran.

But if the financial crisis at home has accentuated US geo-economic weakness in the form of massive deficits, a weak dollar and rising oil prices, the mess in Iraq and the continuing tension with Iran and other global military diplomatic problems like North Korea expose the erosion in US geo-strategic power.

It is less likely that the Americans will be able to fight two major wars around the world at the same time. To put it differently, the US has less of the kind of economic and military leverage it used to employ in the past in order to affect the global balance of power.

That not only means that Washington will have to place on the backburner its global democratic crusade. It will be more difficult for the Americans to energetically promote the liberalization of the global trade agenda. It also points to the need for America’s military and trade partners, as well as the rising powers of China, India and Russia to try to fill the vacuum created by the overstretching of US economic and military power.

The hope is that the next person in the White House after 2008 will be more inclined to work together with the rest of the world in trying to defuse global military tensions, especially in the Middle East and continue the process of economic globalization.

But the growing anti-globalization sentiment and anti-immigration mood in the United States in the form of political pressure in support of protectionism and isolationism suggest that the adjusting of US interests and policies to the changing realities of weakening American economic and military power will not be easy.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.