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5 global trends to watch in 2011
Jim Meszaros
What does 2011 hold for global politics, diplomacy and economic growth? Here are five trends to watch as the year unfolds.
1. U.S.-China relations: Political capitals around the world are closely watching relations between Washington and Beijing. With a myriad of issues to address – from North Korea and Iran to the South China Sea and trade, currency and climate disputes – will the bilateral relationship be one of confrontation or cooperation in 2011? President Hu’s high-profile state visit to Washington in late January is likely to set the tone for the year.
2. Emerging markets will fuel growth: Brazil will have a new government, Indonesia is quietly becoming another Asian tiger, and India’s economy may grow faster than China’s in 2011. Europe and the United States may register only modest economic growth as stimulus programs wind down and unemployment remains high, but developing world markets will fuel global economic growth. In fact, they may grow four times faster than rich markets. Multilateral companies will look behind the BRIC markets (Brazil, Russia, India, China) for new opportunities: Turkey, Saudi Arabia, South Africa, Vietnam, Colombia, Egypt and Indonesia will attract investment interest.
3. Africa rising: Sub-Sahara Africa will enjoy improved prospects in 2011, fueled by commodity exports to Asia, improved governance and political stability, and a growing middle-class population that is enabling urbanization, consumerism and expanding stock markets. The fastest growing sectors should be telecoms, banking and retailing. Africa’s largest country may split in two, if South Sudan emerges as an independent nation.
4. Currency disputes: As the global economy recovers, countries will pursue their own competitive advantages in trade and investment. No country wants to let its currency appreciate, the results of which are declining exports and foreign capital. But in an era of global imbalances someone must be a net importer. Currency interventions may spark new protectionism and diplomatic angst – not just between Beijing and Washington, but in several political capitals.
5. Tightening budgets: Europe and the United States will struggle to tighten national budgets. In the United States, can a Republican House of Representatives and President Obama agree on a deficit reduction strategy, or will 2011 be one of continued stalemate? Meanwhile, American consumers are still struggling with debt and nervous about unemployment. In Europe, the big-borrowing countries outside the euro zone are especially vulnerable, while growth in Germany, France and the U.K. will remain subdued as stimulus programs fade away, leaving a weakened private sector to pick up the slack.
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Five global trends to watch for this summer
Jim Meszaros
While much of Washington will focus on domestic issues this summer in the run-up to November’s congressional elections, a world of uncertainty lies ahead for America’s political, economic and security interests around the globe. Here are five developments on the global stage to watch closely over the next three months:
1. Europe: This is a year of global economic recovery – with growth weakly returning to the U.S. and many Asian economies. But sovereign debt concerns in the euro zone are making leaders, investors and markets nervous. The recent EU and IMF bailout program for Greece may be just the beginning of a long summer of economic uncertainty if Spain, Italy or Portugal experience a similar crisis. And the newly-elected British government of Prime Minister David Cameron faces difficult fiscal choices in the months ahead.
2. China: The Obama administration and Congress are pressuring China to float its currency, which many believe creates unbalanced trade flows between the U.S. and China (as well as with Europe). Quiet talks currently underway between Beijing and Washington must yield some results in the weeks ahead, or Congress will raise the pressure for the White House to act. Meanwhile, trade frictions are brewing as the U.S. investigates a variety of Chinese goods being dumped in the U.S. market, with China threatening to retaliate against any new tariffs. A deteriorating U.S.-China relationship could impact cooperation on Iran and North Korean nuclear programs or the prospect of reaching a global climate treaty (which in any event does not look optimistic for this year).
3. Middle East | Central Asia: The U.S. public is growing impatient for results in Iraq, Afghanistan and Pakistan. And with a continued stalemate over multilateral sanctions against Iran’s nuclear program and a seemingly stalled Middle East peace process, there are few good options for the U.S. efforts to create a balance of power across the region. Meanwhile, Russia is quietly rebuilding its influence in places once dominated by the former Soviet Union, and Turkey looks to enhance its influence across its neighborhood.
4. Mexico: Concerns over increasing drug violence and narcotrafficking along the U.S.-Mexico border is rising to the top of Washington’s foreign policy agenda. And with the Obama administration and Congress promising to take up immigration reform before the November elections, this could be a contentious period for bilateral relations with our southern neighbor, which commemorates its bicentennial of independence in September.
5. Africa: Regardless of what is happening on the global stage, for about 30 days this summer much of the world will be watching soccer pitches across South Africa, as 32 national teams compete for FIFA’s 2010 World Cup championship. This will be a moment of tremendous pride for all of Africa as it hosts its first global event, with many Africans hoping a successful tournament helps improve the continent’s image from one of conflict, corruption and poverty.
