2016: What’s ahead for the world?

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By and large the previous year was a year of crisis escalation, brought forth by the emergence of new sources of tension not only in diplomacy but also in actual military conflict. On the one hand, fresh sources of armed engagement and humanitarian issues had world leaders worried overnight (ISIS beyond Syria and Iraq, Russian intervention in Syria, migrant crisis in Europe). These events were not predicted before 2015.

2016 will be marked by an increase in local conflicts, like in Ukraine and in the Arabian Peninsula where the rift between Sunni and Shia Muslims will intensify. In fact, as of press time, Saudi Arabia has cut off all diplomatic ties with Iran, the latter infuriated over the execution of a prominent Shia cleric. It is expected to be joined by other Sunni majority countries in the Middle East. This year might just be the time for the spreading of these conflicts to more states.

The presidential elections in the United States will put on hold major foreign policy decisions, as the American public gets distracted by the convoluted race to the White House. As for the exiting American president, Obama will protect what he has accomplished in 2015, including the rapprochement with Iran and Cuba.

As the United States continues to be rejected in many areas of the world, the leadership vacuum that it will create will give opportunities to other major powers, and with it, a new era of anti-West geopolitics will emerge. The post-American century is an irreversible occurrence now as other major powers like Russia, China, and Brazil take on responsibilities beyond their typical spheres of influence. In the military sphere, Russia has re-entered the Middle East in a big way, while China will now formally launch the Asia Infrastructure Investment Bank (AIIB), aimed at rivaling the IMF and World Bank.

The global economy is expected to be ‘disappointing and uneven’ in 2016 because of the continuing slowdown in China, sluggishness in world trade, the threat of rising interest rates in the US, the ongoing fall of oil prices, and the vulnerability of emerging economies to absorb economic shocks, according to the IMF.

General elections will take place in Taiwan, a Western-backed state that is unsure about its identity vis-à-vis China. The emerging leader might give Beijing fresh fears regarding the longstanding One-China policy. The UK public will go to the polls to decide whether to stay or leave the European Union, while in the Philippines, presidential elections will decide whether a future leader will continue to provoke China and further impress the United States for its own benefit.

Islamic State (ISIS) is expected to be put on hold territorially in Syria and Iraq, thanks to Russia’s military intervention. However, it might gain influence beyond the region as other terrorist groups (like Boko Haram in Nigeria, and other groups from Somalia to terror groups in South East Asia) pledge their allegiance to Daesh.

The United States and NATO will further infuriate Moscow as it decides on sending nuclear weapons to Poland, a former Warsaw Pact member. As a result of Washington’s antagonizing policies in Europe, Russia will further invest in its armed forces, which might trigger a new, expensive, and unnecessary arms race in continental Europe.

Europe’s most powerful leader, Angela Merkel, is expected to leave office after three successive terms. What this might mean for Europe is a change in policy towards Russia (sanctions), the migrant crisis, the German commitment to the entire Eurozone project and Berlin’s attitude towards economically and socially troubled states like Spain, Greece, and Italy.

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2015: The World Ahead

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It is undeniable that a new calendar year has its own transformational effect on everyone: if only the start of a new year has the power to recalibrate world events to more optimistic trajectories. The year 2014 saw an avalanche of disasters, from wars in the Middle East, to the unrest in Ukraine, to the triple air disasters, to the resurgence of Ebola in Africa and the collapse of oil markets towards the end of the year.

In almost every global issue, 2014 has strained not just the wits of our leaders, but also the resources that were required to tackle them. Indeed, we can only wish that humanity’s problem-solving vigor does not fatigue itself in the year 2015. What then are we to expect for the year ahead?

On the economy front, the United States, still the world’s biggest economy (but not anymore in a few years’ time), is expected to slowly move out of its unemployment woes which in effect will help in improving its GDP. Economists are looking at 3% growth with unemployment going down to a modest 5.3%. They also predict a stronger dollar against the euro and the Japanese yen.

Economists also predict continued growth for China, but at a slower pace in the months ahead. As for Germany, the Eurozone’s economic powerhouse (and savior), its giant trade surplus will likely shrink this year. Already a legitimate and a functioning entity, the Eurasian Economic Union, a rival to the European Union, already came into effect on January 2, 2015. It comprises the initial countries of Russia, Kazakhstan, Kyrgyzstan, Armenia, and Belarus. Despite its potential competition with the EU, the new EAEU called for “start(ing) official contacts between the EU and the EAEU as soon as possible”.

For the rest of the world, most economists agree that the world is headed for a better economic outlook in 2015. For instance, the International Monetary Fund predicts the global economy to expand to 3.8% this year, compared to 3.3% in 2014. Such growth is the fastest since 2011, and the downward spiral of oil prices means businesses and consumers alike will have more money to spend on other things. On the energy side, economists predict still lower oil prices in 2015, thanks to continued oversupply and the reluctance of oil majors to cut production.

Political activity in major European countries like the UK, Greece, and Spain will see an interesting shakeup this year. Starting with Greece, concerns in Brussels will finally see the light (or dark) if a left-wing party challenges the present austerity measures and with it, bring back memories of a Greek exit from the Eurozone. At 24% unemployment, similar public sentiment in Spain will test the euro-wide policy of austerity in the coming Spanish local elections. In the UK, general elections will be held in May as well, where the dissolution of the present Parliament will likely take place, while political rivalries are expected to be ‘neck-and-neck.’

Another notable mention is the expiration of the United Nations Millennium Development Goals (MDGs) on December 31, 2015. Discussions as to what will replace it, along with which priorities should be set, are already underway, with some prominent leaders suggesting a focus on broadly the same issues for global development, while others suggest embarking on the newer UN Sustainable Development Goal (SDGs). Regardless of the global issues that will be focused on, the new goals will represent the most challenge to Ban Ki-moon and represent the most important legacy as he leaves the UN after his term ends in late 2016.

Emerging economies and realities: Despite their reliance, US keen on halting China’s economic influence

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The recent Asia Pacific Economic Cooperation (APEC) meeting in Beijing has once again highlighted the United States’ fervor for grandstanding acts of stealing the spotlight away from its rivals, or at least halting the advances of emerging economies and political powers beyond the Western hemisphere, whether it be at home or abroad.

Just a day before the APEC summit, US President Obama gathered participants to the US-led but China-excluded Trans Pacific Partnership (TPP) held in the US embassy in Beijing. The TPP is essentially a regional trade agreement that aims to undermine China’s own Free Trade Area of the Asia Pacific, which is a broader framework for bringing closer integration of Asian economies.

This display of intent comes at a time when the TPP is yet to resolve long standing issues that has halted it from becoming a fully functional economic bloc. There are still protectionist issues to be settled between Washington and Tokyo, for instance, and New Zealand’s intention to “pull out of the negotiations if politicians in the US used them as a vehicle to try to contain the rise of China.”

IMF and World Bank: Tired economic powerhouses

As the United States’ economic and military influence further erodes, the vacuum it is creating is more and more being filled by emerging powers consisting of China, Russia, Indian, and Brazil, which together in July 2014, account for roughly 20% of the world’s economy based on GDP and 30% based on Purchasing Power Parity, which is a more accurate measure of world economy. In July, BRICS proposed a $100bn New Development Bank to meet infrastructure and development projects at a time when the West continues to erode its role in global trade.

The ongoing shift in global influence from West to East has rendered the traditional economic clout of the West, through the World Bank and International Monetary Fund, unable to meet the enormous investments that are required by developing economies in the Asia Pacific region and Latin America. Indeed, both lending institutions have become hostage to their colonialist approach to development, such as in leadership, voting rights, capitalization, headquarters, and staffing, which are all dominated by the United States.

The perception that emerging economies are still heavily reliant on advanced economies for market access and demand is quickly coming to a pass. In its International Trade Statistics 2014, the World Trade Organization concluded that “more than half the exports from developing economies were sent to other developing economies in 2013.” It also revealed that “countries in Asia sent more than 60% of their exports to other nations in Asia and to Africa and the Middle East, compared with just over 15% each to North America and Europe.”

As has been observed in the past decade, this tectonic shift in global economic activity will only continue to progress to reach other economies not held hostage by the traditionally two-edged economic and political policies of the West.