An Explosive Cocktail to Toast the New Year’s Upheaval

Two major developments in 2011 are of fundamental importance for the future of the world. First, the Arab upheavals have demonstrated that people power will have immense importance worldwide in the coming decade. The evident fear of contagion on the part of China’s rulers is undoubtedly justified, since a tide of unrest is already growing in that country. This fear must now be shared in the Kremlin as well, as the period of Vladimir Putin’s uncontested rule is brought to an end by a mass demonstration movement.

Second, the European debt crisis has demonstrated that the financial crisis of 2008 was not an isolated event that would be overcome in two or three years, as complacent governments had pretended. On the contrary, it was the beginning of a profound crisis of the entire world economy. The crisis of the banking system has triggered a systemic crisis of state finances, because of the burden of supporting the banks combined with the contraction of state revenues. This crisis has exposed the underlying weaknesses of the architecture of the Eurozone, but it is not confined to the zone. The question being debated now is how fundamental the effects will be on the whole world economy, and whether there will be a new great depression.

A Fast Fusion

These two trends will come together more in 2012. The Arab revolutions were not directly triggered by economic crisis, but they do reflect a more fundamental dissatisfaction with authoritarian rule across north Africa and the middle east. Indeed, political demands are now everywhere inflected with economic grievances, which are only going to be sharpened as the world economy slows. Political revolt has, after all, economic consequences, undermining tourism and damaging general business confidence. In countries where political change is achieved, social conflict will not be far behind. And, of course, economic crisis brings deepening social conflict even in supposedly mature democracies, as is very evident in Europe.

It is difficult not to see 2012 as a year of even greater upheavals than 2011 — though the results will probably be as mixed as those of the Arab spring itself. The uneven pattern of popular revolt, reform, repression and even armed conflict will probably spread across more countries and regions. In the Arab world, clearly the Syrian uprising is the crucial test of the first half of 2012. In Europe, where 2011 saw the surprising replacement of democratic by technocratic governments in Greece and Italy, 2012 will certainly see more serious polarisation in many countries as governments try to impose deeper austerity.

The biggest question is how fast and how badly the slowdown affects China, and whether social unrest begins to escape the ruling party’s control. If this were to happen the implications for the world would be even more profound than those of the momentous events in the Arab world in 2011.

A Missed Agenda

It is striking how far world politics seem to have slipped from the grip of the sole superpower which, barely a decade ago, was set to make the twenty-first another American century. The United States election seems so far to be almost a sideshow, with the hopes invested in Barack Obama long gone, his presidency firmly constrained by a Republican congress, and his opponents careering through one manifestly weak candidate after another as their primary season begins in earnest. Yet the US clearly has the potential to make the global crisis radically worse if it allows its maverick Israeli allies to attack Iran.

Governments and popular movements alike will be grappling in 2012 with the explosive cocktail of global governance, austerity and democracy. Presidents seeking re-election and prime ministers seeking to distract their publics may increasingly resort to national chauvinism. Popular anger may turn against minorities as well as rulers. This could be a year of ugly as well as hopeful developments. And so far there is little sign of the kind of internationalist, social-democratic politics that might offer some deeper solutions to the political and economic crises.

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