2008 - A step closer to the abyss

"Once more unto the breach, dear friends, once more" - the world slips closer to the edge of the precipice, but once more we seem to have been reprieved. This cannot go on indefinitely. The lesson of 2008 is that we have edged closer to self-destruction through war, climate and finance, but the world still has an opportunity to fix itself. The wars in Afghanistan and Iraq have been as bad as they could be, but hope of peace is still there. There has been total inaction on climate change this year, but environmentalist movements are as close to government decision makers as ever. The global economy has taken a battering throughout 2008, but has not touched large sections of society.

Another theme of 2008 has been how unresolved regional issues that have simmered have got close to breaking point. These might include Zimbabwe's internal crisis, Russia's short war in Georgia, the protests for democracy in Tibet or the latest Israeli onslaught on Hamas. This reflects badly on the international community as well as those involved. Internal matters are internal matters and there is a limit to what the outside world can do. But a failure to have united positions on issues like Georgia’s NATO membership or vast differences between southern African and European relations with Robert Mugabe have made the international community powerless.

It’s hard to find some positives in 2008, but three events stick out. The Beijing Olympics were very controversial, with questions on censorship, pollution and Tibet scrutinised in the build up. How China will develop as a country and an international actor is still unclear. But the Olympics was a positive step, showing what China can add, rather than what negatives it might have. In September CERN scientists in Geneva launched the Large Hadron Collider, firing protons around a 27 kilometre ring and recreating the Big Bang. Science is one thing that the world is getting right at the moment, and if the same efforts were put into resolving conflict and poverty, the world would be far better off. Finally, it had to be, the one and only. Barack Obama will inevitably disappoint some in the next four years and many of his plans will not work out as planned - that’s the nature of politics. But November 4 was a great day for the optimists. Here are a few summaries on 2008.

Global Economy
2008 was a devastating year for global economics and the financial sector - with a mere $14 trillion wiped off world share values. From September onwards, the state of the global economy, in particular the financial sector has been a dominant issue. The bringing of American mortgage firms Fannie Mae and Freddie Mac in public ownership was followed by the bankruptcy of Lehman Brothers and the sale of the greatly reduced in value Merrill Lynch. The subprime mortgage crisis of 2007 morphed into the financial crisis of 2008 at this point, since when a tsunami of financial turmoil has followed. The crisis in banking has impacted on most of areas of the economy and has brought the onset of a global recession. The relationship between governments and the free market has been profoundly altered by this crisis. Banks are essential for business, commerce and industry, so a bailout can be justified, even though it was their incompetence that created the mess. A reform of the financial system is promised, but on whose terms - the governments, the taxpayers or the bankers?

Meanwhile, not unrelated, food and energy prices soared in the first half of the year. Food prices increased through many interlinked factors or a “perfect storm“: increased biofuel production; changes in diet in China and India to resource intensive food; higher oil prices impacting on fertilizers and food production; natural disasters like Cyclone Nargis that caused a spike in rice prices. But thanks to the global recession and fall in world demand, food prices are now falling again. Although the credit crunch might impact on farmers production capabilities, causing another surge in prices.

The fluctuating of oil prices throughout 2008 has been one of the year’s most curious economic stories. Prices soared over $100 for the first time in January, and then hit a record $147.27 in July. Prices had been increasing at a gathering rate throughout the decade, but Tensions in the Middle East, increased demand in China and India and a fall in the dollar’s value all contributed to this spike. However just as environmentalists had a minor celebration, hoping that this new era of higher petrol prices would reduce car usage and emissions. And just as governments were talking of pushing the alternative energy agenda further, the global recession brought prices back down again. The rich producer states have invested this incredible boon back into green projects, but will this be enough? Its good PR but expanding these advances in clean technology across the globe will take a long time. The world’s dependency on oil and its role in numerous global issues was reiterated again in 2008.

South Asia

If one area of the globe had a bad year, it was South Asia. 2007 had been a bad year for Pakistan, 2008 was worse. The ongoing conflict in its north westerly border with Taliban militants escalated through the year - air strikes by American unmanned drones raised the temperature further. Pakistan’s chaotic political system took one step forward - with the resignation of the unpopular General Musharraf. This was replaced by the combined PPP leadership of prime minister Yousaf Raza Gillani and president Asif Ali Zardari, widower of Benazir Bhutto. Zardari - also known as Mr 10% - is an unlikely saviour for Pakistan. Deeply unpopular with large parts of the population and faced with a worsening security situation, his chances of success appear slim.

Pakistan’s year was just as bad as Afghanistan, where the decline in security has led to a proposed increase in US troops. The so-called Iraqisation of the conflict, complete absence of political authority and an ongoing humanitarian crisis has made Afghanistan worse than ever. Achieving stability in Pakistan first and securing the border seems a likely solution, but this region is so lawless and uncontrollable, that quick progress is very unlikely soon. A General Petraeus led “Sons of Afghanistan” strategy has been hinted at. But 2008 may well be the year that Afghanistan became unsolvable.

India had escaped this maelstrom for most of the year. Domestic terrorism - linked to the Students Islamic Movement of India and Naxalite groups - had occurred throughout the year, but India’s perilous position so close to this chaos was only fully revealed by the November Mumbai attacks. The Mumbai atrocities proved that India still faced a far from resolved situation in Kashmir and that it was on the frontline in the war against Islamic extremism in northern Pakistan. Lashkar-e-Taiba has liberation of Kashmir as its founding objective, but diverting the Pakistani military from its war against the Taliban in the north, was an additional objective from the attacks.

Pakistan is therefore the key country in the region and probably wins the unwanted end of year prize for most dangerous country of 2008. Obama will focus attention on Pakistan after January. It has become a launch pad for attacks on both its neighbours. British intelligence believes that the majority of terrorist plots in the UK are born there. And just to make things worse, it has nuclear weapons.

On a positive note, India has made further progress in securing its position as a leading economic power. If India can cope with the global recession, then it could - alongside China - dominate the next decade. The rise of the Indian billionaires; the immense Indian middle class and their purchasing power; confident expansions abroad, as seen by Tata’s buyout of Jaguar, reflect this upward growth.

Americas

Two questions have dominated American politics in 2008: who will be the next President and what will happen to the economy? The longest, most expensive and most historical election ever kept America in stasis all year. With the current administration out of ideas and with no agenda, their sole objectives were to not make life too difficult for John McCain and to limit the damage from the economic downturn. The official transition might only have started after Obama’s victory in November, but a transition has been in place since the start of the year. Some President’s - notably Clinton - use their remaining time for shuttle diplomacy and end of term initiatives. The Bush presidency has had a slow death since late 2006. Iraq, the defining issue of the last 8 years, has moved to just about bearable situation for Bush to leave on. The economic problems have either been dealt with by bipartisan cooperation or left half resolved for Obama to pick up (in particular the proposed bailout of the car industry). 2008 was a year of change for America, but not a year of action.

South of the border and into Latin America, many questions are unanswered. How will the region cope with a global downturn? Will left wing governments maintain their ascendancy? Whilst Fidel Castro stepped down after half a century, Hugo Chavez looked set to fulfil his ambition as US - antagoniser in chief in the region. The failure of the Bush administration to effectively engage in the region has presented openings for China and Russia to strengthen ties. Latin American leaders are not only looking for new alliances, but they are also strengthening cooperation across the continent.

The problems that have characterised Latin America still exist though. Drug trafficking on a vast scale still has a deep impact on society and politics from Colombia north to Mexico. In the latter, brutal and gruesome gang wars threaten to consume the whole state. With such narco-power, gangs in Mexico have turned the country into a northerly version of Colombia. Corrupt politicians have allowed the traffickers to become a real threat to the state. The drug wars in Latin America have simmered for a long time, they reached a dangerous point in 2008, next year will probably be worse. President Obama might face one of his worst crises just south of the border.

Environment

One step forward, one step back was the theme for the environment in 2008. Governments claim that they have introduced a range of measures to cut emissions and made the changes necessary for society to tackle climate change. Activists will claim that these measures have not gone far enough and that other actions - like proposed extra runways or nuclear power stations - are at best counterproductive, at worse a major step backwards.

America's new ally

Its four weeks until President-elect Obama's inauguration and then the fun begins. The members of his new administration are very familiar - made up of current Bush appointees like Robert Gates and Democrat regulars, in particular Secretary of State Clinton. But we are no wiser as to how the new administration will approach the countless problems facing the world. Foreign policy never works the same in print or the academic arena as it does in the bad and dangerous real world.

Plenty has been written about who President Obama will visit first and which foreign leader will have that privilege of an Oval lawn press conference first. The convention says that American leaders usually engage with key regional allies first. Canada and Mexico are the usual favourites. But international allies often follow quickly. President Chirac was the first foreign leader to visit George Bush, although this was before his inauguration. Blair was the first non North American leader to visit in February 2001. British prime minister Brown and President Sarkozy will be champing at the bit, after either Mexico or Canada are catered for.

But given the critical situation in the world, this convention of meeting key international allies should be put off this time. Here is an alternative first visitor. Russian President Dmitry Medvedev should at least be at the White house before the first month is out. Russia are widely feared and distrusted, but their importance is vastly understated.

The worsening in relations between the United States and Russia during the Bush era was totally avoidable, reflecting American arrogance and Russian bitterness. The five day Georgian conflict was the culmination of this decline. Bush and Putin had initially warmed and had many similarities - both blunt and arrogant men united with machismo and callousness as seen by their hardline responses to terrorist atrocities. As Obama's website summarizes well: "the Bush Administration's erratic policy of embracing Vladimir Putin but neglecting U.S.-Russian relations". America's Iranian obsession that led to missiles defence plans in Eastern Europe and blind unilateralism that left no room for anyone but a few willing "partners", created unnecessary splits.

The installation of missiles in Poland and Czech Republic and the encroaching expansion of the NATO to Georgia, owed plenty to a Cold war ideology of containment and arms build ups that still remained in the Republican party. As Obama's campaign puts well again: "Retrofitting outdated 20th century thinking to address this new 21st century challenge". With these Cold war warriors finally gone, a new attitude to Russia can develop in Washington. Not only is Russia a different international player to its Cold war guise, new global realities make Russia both a completely different potential ally with modern day interests but also with a previously untouched range of talents that the international community can draw on. Russia through its immense historical authority and vast natural resources still has the power to influence in the world's most difficult places. This persuasiveness has been left on the sides lines for the last eight years. Obama, hopefully, is smart enough to realise that Russia is indispensable.

Russia realises like the rest of the world that Obama's presidency is a watershed. Obama and Medvedev have already spoken and US-Russia relations were put down as a priority. Creating positive relations with Russia, is also given its own sub-heading on Obama's website. To him it should and does rank alongside working with Israel, dealing with Iran and of course Iraq.