A World On The Edge

I hereby yield the floor (again) to Paul Rogers:

A combination of long-term trends and the global economic turmoil of 2008-09 is fuelling a potential revolution of frustrated expectations.

The global financial downturn that accelerated throughout 2007-08 for some time seemed to be largely confined to a cluster of western states - the United States, Spain, Japan and Britain among them. Yet the greater extent and severity of the crisis that erupted on "debtonation day", 9 August 2007, is becoming clearer. As late as November 2008, the International Monetary Fund (IMF's) monthly update was forecasting that overall world output would rise by 2.2% in 2009; the leaders were expected to be some of the "tiger" economies, especially China. Now, in late January 2009, that assessment is being downgraded sharply: to 0.5% prospective overall growth, the lowest annual rate since 1945.

There is a bleak implication here: that emerging economies will for the foreseeable future no longer be able to drive the global financial machine. This in turn dissolves the hope that they would cushion the worst impacts of the recession in wealthy states. The IMF cites a range of evidence - lower commodity prices, worsening export prospects and financial constraints - to forecast that the growth of the emerging and developing economies will shrink from 6.25% to 3.25% in 2009 (see "World Growth Grinds to Virtual Halt, IMF Urges Decisive Global Policy Response", 28 January 2009).

The impact of this fall will be especially heavy on the approximately 4 billion peole who compose the marginalised majority of the world's people, those who lack security and minimally reliable living-standards. The International Labour Organisation (ILO) warns that there could be 51 million job-losses in 2009. The food-security summit in Madrid on 26-27 January 2009 heard that while food prices had declined in the past few months, they were still 30% higher than in 2005-06 (see Victoria Burnett, "UN chief warns of food shortages in poor countries", International Herald Tribune, 27 January 2009).

The United Nations secretary-general Ban Ki-moon drew attention to a recent rise in malnutrition, which he linked to the wider economic downturn: "With the spreading misery of shrinking economies, communities that were starting to emerge from poverty must wrestle instead with fewer jobs, limited access to credit and restricted market opportunities."

A tale of two trends

It is in this context that members of the global elite are gathering for the annual World Economic Forum summit in Davos, Switzerland, on 28 January - 1 February 2009. The emphasis in most of the discussions - organised around the theme of "shaping the post-crisis world" - reflects the concerns of the rich west in particular, albeit with high-profile contributions from the prime ministers of (for example) Russia and China.

The real issue that the Davos summiteers are unlikely to address is the impact of the recession on a worldwide community in which thirty years of neo-liberal economic policies on a global scale have failed to deliver any measure of true economic justice. There has certainly been growth, most recently in some of the largest Asian economies; but this has been accompanied by the evolution of a transnational elite of well over a billion people that has forged ahead of the rest.

The extent of the divisions is staggering. A striking example is found in a study of the "household wealth survey" by the Helsinki-based World Institute for Development Economics Research, which shows that the richest 10% of the world's people own 85% of household wealth whereas the poorest 50% own barely 1% (see James Davies, Susanna Sandstrom, Anthony Shorrocks & Edward N Wolff, "The World Distribution of Household Wealth", WIDER Angle, 2/2006 [World Institute for Development Economics Research, Helsinki]).

The fundamental failure of the liberalised world system to counter such divisions has, however, been paralleled by another and far more welcome trend: the impressive growth in education, literacy and communications across the world. This achievement, owed primarily to the efforts of hundreds of millions of people across the global south, means that there are now far more people who have shared in educational progress. At the same time, this very advance carries with it a clearer and more widespread recognition of the realities of their marginalisation (see "A world in flux: crisis to agency", 16 October 2008).

This global phenomenon may be beyond the awareness of most of the world's elite - but huge numbers of people in the majority world have an acute understanding of both how far they have come and how high are the obstacles to thier further progress. The result is no longer what used to be described as "the revolution of rising expectations"; but rather a potential revolution of frustrated expectations. This has already led to revolts from the margins, which are likely to continue.

The recent experiences of China and India is instructive (see "China and India: heartlands of global protest", 7 August 2008). In 2006, for example, the Chinese authorities had to introduce a new group of security forces - 600-strong elite squads in each of thirty-six cities dedicated primarily to social control. They were intended to supplement existing policing systems attempting to cope with a rapid rise in social unrest (see Jane Macartney, "China creates crack units to crush poverty protests", Times, 20 June 2005).

In India, the neo-Maoist Naxalite rebel movement that originated in West Bengal in 1968 might have been expected to be consigned to an over-full dustbin of history (see Ajai Sahni, "India and its Maoists: failure and success", 20 March 2007). Instead it has been able to expand its influence and engage in sustained combat with official security forces; it is now active in 185 districts, located in seventeen out of India's twenty-eight states. In 2007, the movement was described by India's prime minister, Manmohan Singh, as the "single biggest internal-security challenge facing India" (see P V Ramana, "Red Storm Rising", Jane's Intelligence Review, August 2008).

A further example of the potential revolution of frustrated expectations is the violent reaction to the rapid rise in food prices in 2007-08. This led to numerous riots and other civil disturbances in Mexico, Senegal, Morocco, Mauritania and elsewhere (see Dominique Baillard, "The demand for grain won't stop growing", Le Monde diplomatique, May 2008 [subscription only]).

These developments are only the more visible indicators of a deeper resentment among communities that have far greater access to communications technology (especially television) and are far more aware of the scale of the world's social divisions than ever before (see "A world in the balance", 13 November 2008). In a situation where half of the world's population is now urbanised, many of the divisions are stark and unavoidable; not least the development of heavily-guarded gated communities, some of them akin to medieval walled towns (see "A tale of two towns", 21 June 2007).

The risk of revolt

The key point here is that these alienated and often violent responses have all evolved during a period of overall growth, in which even in the midst of wide social divsions the prospect of economic betterment has remained open.

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