As we enter 2014, it is worth looking back at 2013 and giving thanks for things that went right!
(1) The Eurozone avoided political or economic disaster. Despite austerity policies damaging top-line economic growth, and leaving many European countries with higher debt/GDP ratios than in 2007, the promise of the ECB to do “whatever it takes” has lowered interest rates and prevented state bankruptcies.
(2) The Syrian civil war did not drive up oil prices and create a global economic or energy crisis. For this, we can thank fracking and new oil finds in many parts of the world. And the people of Iran for electing a regime committed to discussions with the West.
(3) The other Arab Uprising countries (Libya, Yemen, Egypt, Tunisia) have managed to avoid all-out civil wars; which historically are all too common in revolutions. So far, only Syria (and Libya briefly) suffered from full-scale combat operations.
(4) China’s economy has stumbled but not fallen. The new leadership has strengthened its position and committed itself to reforms to boost domestic consumption. They have also been willing to prick bubbles in housing and credit.
(5) America’s economy has picked up and its political uncertainties are waning. The worst wrangling over the deficit and budget seems behind us, the Tea Party extremists seem to have lost their intimidating hold over the Republicans in Congress, and a sensible (if far from ideal) compromise seems to have emerged on the budget, with progress on the minimum wage, immigration, and spending now looking possible.
So let’s give a cheer for five disasters-in-the-making that could have turned out much worse. That is not to say these problems are all resolved, or that there are not others lurking. My next post will look at the most troubling threats to global order and prosperity in the coming year. But we can take heart that our ability to resolve — or at least muddle through — severe problems is still capable of keeping us from falling into the worst outcomes.