Neo Liberalism Impact On Hegemony Development Research Paper 2022

Running head: NEO-LIBERALISM IMPACT ON THE US HEGEMONY DEVELOPMENT
NEO-LIBERALISM IMPACT ON THE US HEGEMONY DEVELOPMENT
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NEO-LIBERALISM IMPACT ON THE US HEGEMONY DEVELOPMENT1
Introduction
Globalisation is complex. It can no longer be considered as the case of “us” and
“them”. Globalisation has instigated disconnection between the way economies and their
management have been concurrently economized and up-scaled (Potrafke 2015). On the other
hand, the United Kingdom’s Brexit referendum has surprised fair play and financial markets
in all over the world. While considering the previous episodes of contagious financial
turmoil, the success of the “Leave” vote has eased the path of global investors. Meanwhile,
taking into account the number of cases of recent pandemic Covid19 labelled by the World
Health Organization (WHO) is increasing in numerous countries around the world. Global
economic dealings are encountering shocks by the virus and important calls for turning the
West into less reliant on provisions from third world nations (Hutton 2020). However, in
theoretical sense a possible stoppage of the current affairs of globalization possibly will to
some extent decrease the level of frustration with the current disproportions in development.
However, the implication whether this slowdown is in fact capable of alleviating the overall
structural complications which the global economy is experiencing recently remains an
important question. In a world that is gradually ruled by two global powers namely the US
and China, the new frontline of globalization is known as the cyber world. The global
economic setting to the U.S.-China relationship is nonthreatening, reproducing modest
development but with several likely headwinds (Saval 2017). Forecasts of recent affairs by
the International Monetary Fund (IMF) are positive which shows predictable rise in
international growth of around 3.5 per cent and higher into 2018. Furthermore, investment,
business as well as employment are all predictable to recuperate. As per studies, the digital
economy, in its early stages throughout the third wave of globalization, is currently
developing as a potency to add up with e-commerce, digital amenities and 3D printing
(Kidwell et al. 2016). The paper is going to explain the way in which neo-liberalism has

NEO-LIBERALISM IMPACT ON THE US HEGEMONY DEVELOPMENT2
impacted the development of the US hegemony. In addition, it is going to analyse the rivalry
between the US and China for global hegemony.
Discussion
Understanding Neoliberalism
Neo-liberalism impacted the development of the US hegemony
Neoliberalism is seen as a definitive occurrence, a social order or a different financial
hegemony. It has occurred due to the successful struggle of upper capitalist as well as
managerial sessions that is the upper classes in opposition to the production workers as well
as clerical-commercial sections (Gledhill 2018). A new discipline of neoliberalism was
forced on workforces, by regulating the pattern of their buying control, new labor situations
besides the weakening of welfare. Even though, after World War II, substantial rate of profits
were preserved within nonfinancial companies to the end of venture, in neoliberalism, profits
were profligately circulated as dividends and, up to 2000s, an outsized portion was given in
the form of interest (Venugopal 2015). Furthermore, policies implemented for stabilizing
value were also substituted for macro strategies with an aim of growth and service. In
addition, fiscal regulations introduced due to the Great Depression were progressively raised.
As a result, limitations to global trade were removed to the profit of unrestricted trade as well
as the free global movement of capital which was imposed to majority of nations. Thus,
neoliberal globalization thus indorsed the nature of transnational corporations at the global
level (Kotz, D.M., 2015).
Neoliberalism effect on international financial institutions (IFIs)
International financial institutions (IFIs) are known as most influential agents of
economic reform in the world. According to Bowles (2016), these organizations offer funding
to national governments even though not completely and the governments of emerging
nations. The two most recognized IFIs are known as the International Monetary Fund (IMF)

NEO-LIBERALISM IMPACT ON THE US HEGEMONY DEVELOPMENT3
and the World Bank. The IMF as well as World Bank has its origin since the end of the
second World War in a political setting that is very unlike from the present scenario. On the
other hand, their roles as well as modalities are properly restructured in order to aid the
interests of the ones who capitalize from neoliberalism. As per studies, while functioning as
unbiased institutions, the IMF and World Bank only offered services to the influential
welfares of western nations (Eriksen 2018). Moreover, previously in both the organizations,
the power of election of particular nation was not measured by population. On the contrary, it
was measure as per the amount of capital which the country funds to these organizations and
various other political factors. Thus it reflected the amount of influence the country can exert
in the world. As per studies, the World Bank’s Country Policy and Institutional Assessment
(CPIA) index that is functioning currently in order to determine eligibility for World Bank
credits measure prospective borrowers as per the detailed list of actions of market
approachability, recognized value, and social inclusion (Schrecker 2016).
On the other hand, the control of the IMF showed great clarity with any country’s
financial struggle as at this juncture it necessitates capitals in order to make outlays on private
loans. Babb and Kentikelenis (2018) have noted that before the endowment of the IMF, it
enacts conditions on the nation seeking capital, thus requiring it to undergo structural
modifications in its economy. According to Nur (2015), these conditions are known as
‘Structural Adjustment Programs (SAPs) which intend to upturn cash flow into the country
with endorsements of exports to aid the country settle its debts. On the other hand, according
to the control of the G7 in IMF policy making, the SAPs reflect high neoliberalism. The
effective influence of the IMF tends to be superior in comparison to its association with the
scope of its loans as private financiers frequently determines to offer credit to country on the
basis of the performance of the IMF (Babb and Kentikelenis 2018). However, the role of the
IMF in the Asian financial crisis during the late 1990s led the IFIs to undergo strict