2011 year-ender
Every year brings changes, but some years really are turning points: 1492, 1789, 1914, and 1989, for example. Does 2011 belong in the august company of such Really Important Years? Probably not, but it definitely qualifies for membership in the second tier of Quite Important Years.
Three big stories ran right through the year, any one of which would have qualified 2011 for membership status. The Arab Spring is an epochal event, the euro crisis threatens the EU with collapse and confirms the shift of economic power from West to East. And the struggle to prevent disastrous climate change was abandoned for the rest of the decade.
The name, it should be noted, is the Arab Spring, not the Muslim Spring, because a majority of the world’s Muslims already live in countries that are democratic: Turkey, Indonesia, Malaysia, Bangladesh, Pakistan, and even Iran (in roughly descending order of how democratic they really are). But the Arab countries seemed remarkably impervious to democracy – until it suddenly became clear that they weren’t.
The revolutions in Tunisia, Egypt and Libya were not just about elections. They were revolts against the arrogance and corruption of the ruling elites, against poverty, against the reign of fear that underpinned all of those regimes. But there was and still is a genuine democratic idealism at the heart of these revolutions.
Similar revolutions could well spread to other Arab countries in the coming year, but in some cases they may not even be necessary. Formerly autocratic monarchies like Jordan and Morocco are in full retreat, hoping to safeguard their privileges by granting political freedoms to the people. And the long and increasingly bloody struggle in Syria could still end in a relatively peaceful transition to democracy, not a civil war.
From the sublime to the ridiculous
The decade-old euro, which aspired to become the common currency of the EU, is in acute danger of collapse, and the efforts of European leaders to save it have been comically inept. Seventeen of the 27 countries in the EU, including all the big economies except Britain’s, use the euro, but that number may drop sharply in the next few years.
The euro was a political project from the start, and it may also die of politics. The initial idea was that a common currency would bind the EU members closer together, but it never made any sense for low-productivity economies like Spain, Italy and Greece to use the same currency as high-performing economies like Germany.
The only way it could have worked was for the richer countries to subsidize the poorer countries forever. Then, provided that there was also a powerful central bank to stop the poorer countries from borrowing too much, the whole project might have worked.
When the tide goes out, as legendary investor Warren Buffett put it, you find out who’s been swimming naked. The European economies were as naked as jaybirds, and so the vultures began to circle (to mix a metaphor).
There are three possible outcomes to this mess. One is that the poorer countries simply bail out of the euro and revive their old separate currencies, which would cause some serious bank crashes in Europe and collateral damage elsewhere. The second is that the euro as a whole collapses, causing severe damage to all the Western economies, including the United States. The third is that the EU itself falls apart.
Option one is almost certain to happen. Option two is getting more likely by the month. Option three is still relatively unlikely – which is just as well, given what a disunited Europe used to be like.
And so to the really bad news
The Arctic sea ice is disappearing faster than even the pessimists feared, massive floods are devastating huge areas and sea level is rising at twice the predicted speed, but nothing will be done about it for the next 10 years. That, effectively, was the decision – or rather, the non-decision – taken at the annual climate change summit in Durban in December.
It has been clear since the debacle at Copenhagen in 2009 that a global agreement to curb the warming was in grave trouble, but the deal in Durban may have been worse than no deal at all.
It is not the first time that short-term self-interest has triumphed over the long-term common interest, but it may be the worst time. By 2020 it will probably be impossible to prevent the rise in average global temperature from exceeding 2 degrees Celsius, which is generally agreed to be the point of no return. After that, we will probably find ourselves in a new world of runaway warming. We know it, and yet we do nothing.
