As we rapidly approach the end of the first month of 2016, many of the dangers that lie ahead for the democratic West and its values have become progressively clearer. Just days into the New Year, diplomatic ties between regional giants Saudi Arabia and Iran were abruptly ended, threatening to throw the Middle East into yet more disorder. The global economy too sputtered, as fears about China’s beleaguered economy led to a fall of seven per cent on global markets this month.
This August, it will have been nine years since the first active phase of the 2007 financial crisis, and in many respects the world hasn’t quite returned to normalcy. Interest rates are still at a historic low and much of Europe remains buried in debt. We are far behind where we were when the last crash happened; some consider a new crash as highly likely, or even imminent, with even George Osborne joining the chorus to warn of the ‘cocktail of risks’ ahead.
The economy this year is ensnared by deep and troubling uncertainty. Osborne’s cocktail – slowed Chinese growth, recession in the BRICs, and excessively cheap oil and copper – are threats enough, but even more lurk behind the shadows. Just as in 2007, financial regulation is once again a key suspect, with politicians worried that the Financial Conduct Authority is at risk of ‘falling asleep at the wheel’ just as its predecessor, the Financial Services Authority, was accused of doing in the last crisis.
The major fear this time, however, is that another crash could prove lethal to global capitalist institutions. The last crash almost dealt a knockout blow, with the UK a mere two hours away from total economic collapse according to then-Chancellor Alistair Darling. Another crash, if as deeply painful and as widely felt as the last one, could exacerbate the economic pain felt after five years of austerity. With the Chancellor’s new ‘living wage,’ unemployment could shoot up and the crowning achievement of the last government, economic stability, left a relic of a more hopeful time.
The political ramifications are equally unpredictable. Whilst a few months earlier it would have been reasonable to assume a crash to be followed by a resurgence of interest in Corbynite socialism, there is plenty of evidence that such an event would only benefit the populist right. In the US, Donald Trump and Ron Paul have used fears of a crash as a vindication of their belief in even freer markets; the inevitable European complications of any crash could poison the referendum debate and give Nigel Farage yet another weapon to use against the European Union. Almost 43 years of co-operation with Europe to create the world’s largest single market could be thrown away for what have always been quite unclear rewards.
Against this dangerous backdrop, the situation in the Middle East shows no sign of improving. Though the Coalition’s air-strikes against Islamic State have reduced the so-called state’s territorial control, stability won’t return to the region without improved relations between Saudi Arabia and Iran. Political change in Saudi Arabia present a threat as well; as the world’s second largest oil producer, an uneasy transition threatens to play havoc with the region. The threat of terrorism, of which we were so brutally reminded in Paris, could also escalate as Islamic State loses more and more territory. New security threats will also emerge; from Islamists in north Africa to further Russian aggression in the Ukraine, the turbulence of the last few years will not fade away.
When 2016 comes to a close, the world may not be a darker place than it was as 2015 ended. Just as when 2014 ended, it is easy to find risks and dangers ahead. Our minds are adapted to do so with ease. Though there are risks, and they do pose a serious threat to our economic and political security, it is worth not overstating the dangers. For every gloomy prediction made about the last year, two predictions were missed about the wondrous opportunities and progress made by humanity. Rubella was eradicated from the Americas last year, Cuba and America re-established diplomatic relations and a much parroted hard landing in China looks set to be relatively soft. In December, the Paris Agreement committed all countries to reduce their carbon emissions for the first time ever. Even the years we find dark as we look back had their glimmers of hope.
In spite of all this, there is much cause for caution in the year to come. Ultimately, disaster is never far away, and 2016 could be its year. The threats to our security – from economic collapse to Middle Eastern crisis – have no reason in particular to be the threats that bring Britain and the West to its knees, but they equally demand our time and attention. Just over a hundred years ago, Britain became involved in a war stated to ‘end all wars.’ Unfortunately, the battle for peace and prosperity looks set to go on and on.
