The United States, the EU and Japan have all been badly hit in the ongoing financial crisis. Developing countries, however, have accumulated a large amount of foreign exchange through their exports. The foreign exchange reserves of emerging markets and developing countries totaled $4.09 trillion in 2007, according to the IMF. As a result, developing countries have not suffered as much as developed countries in the financial crisis. Asia, which is currently playing a crucial role in the international financial market, can help stabilize the world economy.

U.S.-Russia relations enter a downward spiral

In 2008, the Bush administration clung to its policy of containing and weakening Russia. The United States has extended its sphere of influence right to Russia's borders by expanding NATO eastward, fueling "color revolutions" in some members of the Commonwealth of Independence States and deploying anti-missile systems in Eastern Europe.

Moscow grew increasingly intolerant of Washington's moves. Russia went to war with Georgia in August when the latter launched an attack on South Ossetia, a breakaway region. After forcing Georgian troops out of South Ossetia and Abkhazia, it recognized the two regions as independent.

Russia's power has swelled in recent years thanks to its pragmatic domestic and foreign policies and rich energy resources. Its GDP has breached the benchmark of $1 trillion. Experts have predicted that Russia may become one of the world's top five economies with per-capita GDP reaching $30,000. In this context, Russia is eager to regain its great power status instead of yielding to U.S. pressure. At the same time, it has stepped up efforts to restore its influence in the Middle East. It cemented bonds with Iran, Syria, the Hamas organization and member countries of the Gulf Cooperation Council such as Saudi Arabia. Russia also took part in the reconstruction of Iraq. President Dmitry Medvedev warmly received visiting Libyan leader Muammar Gaddafi on October 31-November 2. The two countries also signed a cooperative agreement on civil nuclear energy.

For all their frictions, the United States and Russia need each other. "We hope that our partners, the new administration of the United States of America, will make a choice in favor of full-fledged relations with Russia," Medvedev said in his state of the nation address on November 5. He pointed out that Russians do not have "inherent anti-Americanism," suggesting that the United States should take the initiative in improving relations with Russia. After U.S. President-elect Barack Obama takes office in January 2009, the United States may adjust its policy toward Russia. It may slow down NATO's eastward expansion and the deployment of anti-missile systems in Eastern Europe.

The United States and Europe join forces to deal with emerging countries

The United States and Europe faced a host of severe challenges this year, such as the financial crisis, the adoption of China's development model by other developing countries, economic recession, non-traditional security threats, hotspot international issues and the reemergence of Russia.

Because all these challenges have something to do with emerging countries, the United States and the EU have collaborated in dealing with these countries. They exerted pressure on emerging countries in the first half of this year. In the second half of the year, as the financial crisis escalated, they tried to cozy up to them. Generally, they have three approaches to coping with these countries. First, they try to incorporate them into the Western-dominated international system by outwardly strengthening cooperation with them. Second, they adopt a hostile policy toward countries that challenge their core interests-model of development, ideology, trade, finance, security and climate change. Third, they attempt to undermine cooperation between emerging countries by befriending some of them while demonizing others.

Despite their common goals, European countries will not put themselves at the disposal of the United States. France provides a telling example. While supporting the U.S. position on major international issues, French President Nicolas Sarkozy believes that France should establish stable relations with emerging countries. As the rotating president of the EU, he has publicly criticized the laissez-faire economic policy of the United States.

International hotspot issues become more complicated

The Bush administration's antiterrorism efforts have spawned more terrorism. The Taliban has staged a comeback in Afghanistan, executing a number of violent attacks. Terrorist attacks happen frequently in Iraq and Israel. Al Qaeda has gone international and become better organized. It even canvasses supporters publicly in the name of doing business. A report by the British Defense Ministry says thousands of terrorists are operating in Britain and they are planning to launch new attacks in the country.