The year 2011 has been marked by a continued, if not official, recession in the U.S., while other Western nations have turned to austerity measures to fight off national bankruptcy. Developing African states have suffered through famine and extreme violence, while the youth in the Middle East have raised their voices and fists to proclaim they have had enough of authoritarian rule and inequality. Their actions created a ripple effect that resulted in the Occupy movement in the U.S., a movement that, while often chaotic and misunderstood, sent a message that resonated with tens of thousands of Americans.
If the Universe had ears, I imagine it would hear the Earth rumbling.
Africa: Extreme Violence and Corruption
Let’s start in one corner and make our way across. In Africa, the Democratic Republic of the Congo has experienced continued violence and mass rape. Some tie the violence to the illegal mineral trade, believing that the violence has traveled the physical path used by smugglers. (Read “Congo’s Mineral Trade in the Balance” for more information.)
Corruption in the Congolese government is rampant, and the gap between the wealthy and those in extreme poverty is massive. Fortunately, just this week Congo held elections. There is, of course, no assurance that the results will be legitimate, but democracy often struggles when corruption is so prevalent. America succeeded through democracy because it was a gradual process. In nations where the UN flies in ballot boxes and people are told to pick their favorite candidate, it often backfires. (Look at Rwanda for an example of this.) Still, at least some progress is being made.
Moving over to Somalia, we see a nation that recently experienced the worst drought in decades, and subsequently high mortality rates. Over 29,000 children died from starvation over a period of 90 days.
Here is a very informative video on why the international community did not see this coming, and how international aid distribution affected response to the crisis.
Fault Lines, Somalia
Middle East: Spring Has Sprung
The Middle East has seen a year of intense turbulence – regimes toppled, heavy-handed dictators squashing public protests, men setting themselves on fire to express their fury.
In Egypt, Kamal el-Ganzouri has been (re)appointed as Prime Minister. This may be good news for the under-privileged class, since he seems to have a positive economic agenda. In fact, he received a Ph.D. from the University of Michigan in Economics. As with any country facing revolution, the Egyptian economy is not doing very well at this moment, being effectively labeled an “economic winter” following the Arab Spring.
Europe: A Crumbling Euro?
Skipping over other countries in the Middle East facing similar circumstances as Egypt, let us turn to the Euro. What a mess! It’s possible that the Euro will disintegrate in 2012, according to an article run in the Economist on Nov. 26. Greece seems to carry the blame for part of the problem – after “stretching the truth” on their debt in order to become part of the European Union, they have had to usher in some serious austerity measures that have upset their citizens. There is a possibility that they will face bankruptcy in the coming months. Greece would no longer be able to pay its officials, utilities would be shut off, and Greek banks would be in hot water, since the state owes them around 60 billion Euros.
If they end up bankrupt in 2012, it will impact not only the EU, but the entire world. Our banking system is so globally integrated that what happens to one of us happens to all of us. A report in the New York Times had this to say:
“From global airlines and shipping giants to small manufacturers, all kinds of companies are feeling the strain as European banks pull back on lending in an effort to hoard capital and shore up their balance sheets.
The result is a credit squeeze for companies from Berlin to Beijing, edging the world economy toward another slump.
The deteriorating situation in the euro zone prompted the Organization for Economic Cooperation and Development on Monday to project that the United States economy would grow at a 2 percent rate next year, down from a forecast of 3.1 percent growth in May. It also lowered its economic outlook for Europe and the rest of the world, and a credit contraction could exacerbate the slowdown.”
The U.S.: A Waking Nation
To make a long story short regarding the U.S. economy, things are looking slightly more up than they were in 2008. We are not in an official recession, but we probably will be tomorrow. In a late September, 2011, report, the Economic Cycle Research Institute said that a double-dip recession was imminent and inevitable.
“It’s either just begun, or it’s right in front of us,” said Lakshman Achuthan, the managing director of ECRI. “But at this point that’s a detail. The critical news is there’s no turning back. We are going to have a new recession.”
Setting that aside, the Occupy movement is a significant symbol of the people of the West’s disenchantment of the current economic system. Old activists and new are filling the streets with signs and chants, claiming things like “Banks got bailed out, we got sold out,” and the now worn-out phrase, “I am the 99%.” While the message is often muddled and the method is portrayed as chaotic, one thing stands out: the juxtaposition of massive corporate profits and the highest foreclosure rate in recent history does not sit well with tens of thousands of American people.
In a country known for keeping up with the Jones’ and climbing the corporate ladder, the Occupy movement is to me the most unexpected event of 2011. The world is in revolution, and much of it is tied to economic policy. When the elite of the world grow more powerful and wealthy every day, while more families fall below the poverty line, there is a problem. South America has known this for years. The indigenous people of many South American countries are the ethnic majority, but ethnic (often white) minorities are the ones who own the resources and have the wealth. While this disparity is not nearly as pronounced in the U.S. as it is in, say, Brazil, it is becoming clear to many people that it is headed that way.
And as a friend of mine recently said, the demographics in the U.S. are changing. By 2020, whites will be in the minority compared to Hispanics and blacks. Is it possible that the U.S. will become a nation where the ethnic minority is the market-dominant majority, as Amy Chua describes in her book “World on Fire?” Yes, possibly, and that usually does not end well.
Looking Ahead to 2012
What does all this mean? The Earth grumbles and shakes, but will it settle back into a comfortable hum or shatter in further revolution and a melting economy? Occupy may fizzle out, or it could become a strong political force. The elections in the Middle East may usher in an Arab Summer, or it could place Islamic parties in power that would create repressive theocracies, like in Iran. At this very moment, it appears that the Muslim Brotherhood is ahead in Egyptian polls.
Economically, things do not look well. Unemployment benefits will soon run out for millions of Americans, which will result in millions of additional foreclosures. Drastic changes need to be made, but as of now, nothing useful is being passed through the House.
In Europe, Greece will either have further austerity measures and risk riots from discontent citizens, or lose EU status.
Meanwhile, CEOs of corporations continue to amass huge profits, while their employees lose their homes.
Person of the Year
The 99% of the world. It will be the People who change the world, not the elite or dynastically wealthy.
Book of the Year
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, by Abhijit Banerjee and Esther Duflo. This book discusses how poverty and aid influence the lives of those who make less than a dollar a day. It describes how those in extreme poverty live, and imagines a world beyond poverty.
