December 11, 2007
Five biggest events of 2007
I ended last year with a column that looked back on 2006 and tried to list the "five most important events" of the year. They were - I claimed - Russia’s cut-off of gas to Ukraine; the bombing of the golden mosque in Iraq; the release of an "Inconvenient Truth"; Israel’s invasion of Lebanon and the US mid-term elections.
I intend to repeat the exercise for 2007 in my column next Tuesday (18th December). But with a slight difference. This time I would like to canvas opinion ahead of time. Please let me know, by Friday, what your nominations are. Of course, I realise this in some ways a fatuous exercise. But that’s never stopped me in the past.
Here is my preliminary top five - plus some other events that I’m considering. I won’t go into much detail about my reasoning, otherwise I’ll have written the article in advance. Events are numbered chronologically:
1) The surge
2) Sarkozy elected
3) Blair steps down
4) Flotation of PetroChina - becomes largest company in world by market cap, selected largely for symbolic reasons
5) Sub-prime crisis
But that’s a tentative list, and I’m open to persuasion. Here are some other events I’m thinking about including - Musharraf’s mini-coup; Hamas’s seizure of Gaza; something Russian - either Putin’s Munich speech, or possibly today’s announcement that Medvedev is his chosen successor; the monks’ revolt in Burma; Gore gets an Oscar and a Nobel prize; the revival of the EU constitution; the NIE report on Iran; the resignation of Shinzo Abe; the defeat of John Howard; Turkey’s constitutional crisis and the re-election of the AKP; the last episode of the Sopranos.
Please feel free to add to my list, or to make a case for any of the events above.
I’d say:
1-) The surge is not important because it has been a surge in propaganda only.
The number of US troops dying has fallen because they are keeping out if harm’s way and giving money and weapons to the Sunni tribes as a form of bribes. America still faces long-term entanglement in Iraq and eventual defeat.
2-) Sarkozy will generate a lot of heat and not much light. There will be much strife in France and his wings will be clipped. This may be important for the above reason and not because Sarko will achieve any of his agenda.
3-) Blair’s stepping down is a move from notoriety to obscurity. The government still carries out the same policies so there has not been a change in substance. I think history will be very harsh on Blair and rightly so, although he will have filled his pockets and won’t care. (People, please don’t buy any memoirs he may publish!).
4-) Petro China’s market cap…this was for technical reasons and in itself not substantive. The continued rise of China in 2007 might be a better heading.
5-) Sub prime…I think this is an important story or at least looks so as of now because its depths and implications are not yet clear. We know it is a darned deep hole but don’t know how deep.
I’d say Al Gore’s story is better than the PetroChina’s because the environment is now a mainstream issue (possibly 2007 is the first year when this finally took place).
What goes on in Russia is clearly important and the whole Putin succession saga and the makeup of the Russian ruling elite is a ripe topic.
I think the Pakistan turmoil is important because we may be witnessing a fracture of the post independence elite and its replacement with something that may be either wonderful and democratic or an appalling scenario of Taliban with nukes.
The NIE report will blow over. the Zionist lobby is too powerful in the US and the “let’s bomb the ragheads” lobby will take over.
The rest of the stories (AKP, Abe, Howard) are clearly not among the top 5 important things that happened in 2006 although they may be in top 20.
Other things to consider are the fall in Dollar and the rise in the oil price.
Best,
P
Posted by: Pacifist | December 11th, 2007 at 3:56 pm | Report this commentMy thoughts are to events that may not necessarily be having huge effects now, but which will probably have big ongoing effects on the world. I also want to list new things, and not ongoing events, however those ongoing events may be.
So, the subprime mortgage-back securities crisis/real estate inventory hangover in the U.S. Aside from possibly causing a Japanese style recession (although I sincerely hope not), it may also trigger tighter regulations on financial markets in the U.S. and abroad.
The new oil field discovered by Brazil. Three reasons that this seems big. First, once it comes on line, it could cause a deep drop in the price of oil. (This seems outrageous to suggest, but look how freakishly volatile the price of oil has been in the past 30 years, with price swings for much less substantial reasons.) It might force “peak oil” theorists to revise their deadlines, if this becomes the first of many super-deep offshore fields. And finally, what makes it exciting is that it is being developed by Petrobras with technology in which Petrobras is the acknowledged world leader. This heralds the rise of BRIC multinationals, as does the PetroChina IPO.
Those two events stick in my mind, more for what they might bring in the future than for their present effect (although the present effect of the subprime mess is quite bad, to be sure).
Posted by: RWB | December 11th, 2007 at 5:03 pm | Report this commentItems 2 and 5 are absolutes. The others have had their day, but it is debateable how lasting the marks are that they have left. Personally, I do not attribute Iraq’s let up in violence directly to the Surge. Exhaustion alone has likely played a bigger role.
I would add Chavez’ defeat at the referendum poll and Gazprom’s link up with Algeria’s Sonatrach.
It is doubtful you will agree, but I would dig into what really was discussed in the corridors of the Naval Academy a couple of weeks ago–and in certain boardrooms in the days just preceding.
Then you can decide if the NIE report was an independent event.
Blair’s value is measured by his virtual absence today. Who pays him now?
Posted by: WCM | December 11th, 2007 at 5:41 pm | Report this commentDear Mr Rachman
It is notoriously difficult to predict the future. Usually it is the non-events, not mentioned on such lists, which turn out to have had the greatest long-term ramifications. However you’ve indicated how these could be included on the list by means of some event of symbolic significance. Therefore my choice is:
1. The (Continued) Rise of China (any symbol, such as Petro-China, will do). The mirror image of this non-event is the fall of the US dollar. The latter doesen’t symbolise any absolute decline of America, rather a relative decline, as some of the rest of the world grows-up. America, or more correctly California, will remain the world’s technological power-house for the forseeable future.
2. Climate Change finally enters the mainstream (again, choose your own symbol). This one vies for top position with the previous non-event on my list.
3. The NIE report. This mini-coup is definitely more important than Musharraf’s. It is doubly significant: a) whilst in Russia executive power will possibly have been transferred from the president to the prime minister, in America executive power has altogether evaporated. b) the report may turn out to be a defining moment in the Rise of Iran.
4. Elections to the Duma. The face of post cold-war Russia has finally emerged: a one-party authoritarian state with an assertive and independent (read: unilateral) foreign policy. The unwinding of the Soviet legacy is over, and the end result is — totally atavistic.
5. The surge will have turned out to be a turning point for America in Iraq, and by extension for the Middle East as a whole. This somewhat contradicts my choice for 3), but that’s how life is — full of contradictions. Or possibly 3) and 5) cancel each other out and nothing changes in the ME — which is quite the picture you’ve painted in your latest column, of the US facing Iran in a strategic stand-off in the Gulf.
The sub-prime crisis can’t be a top 5: the vagaries of the markets are rarely of long-term significance (witness, for example, the ultimate insignificance of the 1997 emerging-market crisis, which was much sharper than today’s). Unless that is, the sub-prime crisis leads to long-term structural shifts in the functioning of the markets — but that isn’t very significant for international affairs, the remit of your column.
Posted by: RCS | December 11th, 2007 at 5:42 pm | Report this commentI agreed with several points here.
The fall of the USD is not significant - the dollar is now likely to rebound. I think the interesting thing is the weakness of the renminbi and whether China will let it rise, as it should given the strength of its economy.
I think 2007 will unfortunately be the year that brought back inflation. That, again unfortunately will be long lasting and extremely damaging. Food prices, China (see inflation 11yrs high), the UK (producer prices), the Eurozone… Globalisation has so far been generating cheaper goods for all, now that many countries are out of poverty thanks to globalisation (the Uruguay Round really) their demand for goods and services is rising hence a wave of inflation that is spreading.
Also, that “decoupling” nonsense needs to be put to rest.
Claims to the poles riches also took place this year - unfortunately again, our children (or grand children) might be taught that 2007 was the beginning of both more global acceptance of climate change and start of exploitation of the poles.
I’m also afraid Sarko’s election might be remembered. Hopefully, only for positives but somehow, his hyper activity suggests he’ll also be remembered for not so positives things. (the endorsement of Putin’s victory was interesting.)
Also, if decoupling is nonsense (which I believe) and the US is heading for a recession (which I also believe), then the whole world is likely to slow down. (btw - see the Economist for the Finance piece on how world growth is no doubt overly optimistically computed - essentially a technical argument on how to value Purchasing Power Parity rates) Given the ever increasing income inequalities (and corporate/wall St excesses), this slowing down world economy will hurt many people and historically that has led to new political movements. A renewed form of socialism/communism? Given the green movement has attracted many former “reds”, I’d expect the whole green agenda to become more powerful but also more “red”.
And maybe 2007 is Tech bubble 2.0 ! See ridiculous prices for Facebook. ($15bn!!!) Add “social networking”, “web 2.0″ and valuation sky-rockets.
Posted by: fxtrader | December 11th, 2007 at 8:36 pm | Report this commentMy picks!
1.China’s Foreign Trade (Jan to Nov 2007s up 23.6 percent from last year, totaling $1.97 trillion…and btw, that amount surpasses China’s total foreign trade for all of 2006.
2. NIE Report 2007 ( repercussions around the world to be felt for years to come/also acts as death announcement for the neo-cons)
3. Sarkozy election (everyone will see EU differently due to his leadership especially in JULY 1, 2008 when France heads up EU)
4. SAUDI LEADERSHIP COMES TO FORE (under King Abdullah, SA emerges as dominant leader in Middle East (plays major role in US IRAQ IRAN and Pakistan conflicts…creates nuclear consortium for region, begins process of economic and religious courts reform and takes militants in its midst, reaches out to Iran and Israel yet arms up from US, Russia GB, signals US, new relationship afoot)
5. THE YEAR of Putin/Russia took PIPELINE POLITICS to new heights …SCO Summit , Caspian Agreement …etc..
Posted by: Lisa-Helene Lawson | December 12th, 2007 at 12:12 am | Report this commentwoops ! on Saudis…should read: takes OUT militants in its midst
Posted by: Lisa-Helene Lawson | December 12th, 2007 at 12:15 am | Report this commentI vote for the steep and steady turn in the US dollar as well. Remains to be seen, of course, whether this marks the beginning of a shift in the way Asian economies have been financing profligate US spending, but certainly appears to be. A related phenomenon, although perhaps not worthy of Top Five status, is how the Gulf countries have chosen to recycle their petro-dollars this time around. Does crazy Hugo not make the Top Ten? James Fallows certainly seems to think he’ll be playing an increasingly key role in geopolitics.
Posted by: M Barr | December 12th, 2007 at 7:22 am | Report this commentAgree with concerns about inflation (certainly food & energy prices in Eurozone) rearing its ugly head but cannot square this with the growing consensus of a world-wide (US led) slowdown–unless we’re using the ‘S’ word.
Posted by: M Barr | December 12th, 2007 at 7:28 am | Report this commentWould challenge FXtrader’s well-reasoned dismissal of the USD fall (e.g., what you call the subprime crisis). Agree that the dollar seems likely to recover its balance, but only as the direct costs of the US-originated crisis are transferred off the US balance sheet. Martin Wolf, Jillian Tett or John Authers can give you good numbers to work with, but I would look at this as follows in the context of a geopolitical event:
– I would avoid the title of “subprime crisis”, as this conveneniently transfers the problem for the history books to the backs of poor/overextended/”undeserving” US mortgage holders. The problem lay, as Wolf has detailed, in a near-complete abandonment in the US of sound credit practices, and the initial deadbeats were often far from being classed as the US poor, of which there are many.
– In rough numbers, a direct shortfall of more than USD300B in the US banking system since August has now been funded with direct funding from taxpayers and investors of more than USD100B ; to further offset these losses in global markets, the dollar has been allowed to fall further, wiping more face value off the US bill for the debacle. Recovery in the US has been funded elsewhere, mainly in Europe. (Wolf et al can straighten out the numbers and the macro story, but I believe it is a compelling disturbing one even if FXtrader’s position is right in short-term market strategies. Bottomline: Europeans and others are beginning to pay for the US binge in inflation rates, as will US consumers, but at a lesser rate.)
– When Japan hit a similar wall beginning in 1989, the world, again US led, largely forced tough medicine on them. The Fed turned its back on some bank capital slippage where US interests were at risk, but little more slack was offered. Even harsher responses have been meted out under US direction of IMF policy. Yet the US cried in AUgust and the world has broken every rule of sound economic management to bail them out, buying their fear story that all would collapse. If China had gone into crisis in 2007, what would the response have been? Europe? Look back at how the US responded to Russia’s pre-Putin crisis.
– The Iraq war has largely been paid for by US policy to sink the dollar. Admittedly, the past few months appear to have almost made GWB uncomfortable, but it hasn’t shown. I suggest he is content with where the US economy is.
– The US has gambled big since the Clinton years, when the windfall post-Sviet-collapse “surplus” covered another decade’s overspending in the US. The entire world hungers to live like Americans, but is it not time to lift the curtain on their game?
Posted by: WCM | December 12th, 2007 at 8:58 am | Report this commentJust after closing my post, I opened Martin’s analysis. Sorry, but it seems he has written that paragraph! Haunting, logical, but perhaps the other side of that story–where the US will take the global economy now that it has failed to have the reins taken away from it after such a wreckless and self(?)-serving run of things for the past few decades?
I think it unfair to lay all the blame on Bush, as the Clinton years, Larry Summers and Robert Rubin having been reality checks, are where the seeds of many problems were sewn. Also, as Sarkozy carries an American Bible (some days), perhaps there is a story in how in 2007 Europe became a full co-dependent of the US.
Posted by: WCM | December 12th, 2007 at 9:23 am | Report this commentDear Gideon, I think you are right the surge belongs in the list; I would feel slightly entitled to gloat about my predictions but the political follow up has been lamentable. Still, the Sunnis have chosen against Bin Laden’s brand of Islamism which has disappeared from the political landscape. In a way it also is quieter because Iraqis have collectively tired of all the hatred and violence, such adolescent behaviour can only continue for so long until the elders chose the lesser of evils, sided with the US and put a stop to it.
I think Mr. Blairs resignation is a non-event, UK foreign policy will continue along the course set during WW2. European countries have very little maneuvering space to alter their policies since they won’t be able to form a collective foreign policy despite the wishful thinking of the new ‘constitution’ in which the new European foreign rep will not effectively be able to compel any constituent government to alter its foreign policies. And even if that were not the case there is no rational alternative to alignment with the US and other liberal democracies.
Sarkozy’s ascent and the rout of the socialists seems to be a landmark shift this year, it is as if the French collectively did economics 101 and reluctantly agreed with its fundamentals. Sarko already has successfully faced both trade unions and rioters.
The rise of South American’s populist socialism also seems to have hit its head with the defeat of Chavez in the referendum, but if that is the turning of a tide remains to be seen. A nation like Brazil seems to have decisively taken its place in the global economy and that may determine the fate of Chavez’ revolution more than his antics.
The Soprano’s may be gone, but the Wire (another HBO show about inner city life in Baltimore, MD) is going from strength to strength; season 4 has been stellar. Worth every second of our time.
Posted by: Felix Drost | December 12th, 2007 at 11:15 am | Report this commentGideon, I’m not sure there are specific events which stand out above any others. However, there certainly are specific areas, which, when added together make up more than the sum of their parts. On that basis, my picks are:
1) Price of oil leading to the following consequences:
The relative rise in Opec’s bargaining position given tightening supply / increasing demand (for much of the year)
Venezuela’s attempted rise on the world stage
Speeding up of search for green fuels - which also plays into the climate change agenda
The rise of sovereign wealth funds - a key trend for the next few years
2) Credit market turmoil as a symptom of over consumption by US / Europe. Consequences:
Transfer of assets to producer countries - China
Possible herald of global recession - global decoupling theory seems to have had its day
Further weakening of the USD
3) Events in the Middle East - not sure any of these can be singled out ahead of the others (possibly the surge?):
Capture by Iran of British sailors
Defection of Iranian defence official - leading directly to the NIE
The surge
Israeli airstrike in Syria - who knows where that story will lead us
Hamas takeover of Gaza
Continuing assassinations in Lebanon and everything that represents - possible civil war in 2008?
4) Changes of elected leaders worldwide leads to shifting alliances:
France - US / French realignment
Australia - Australia moving away from the US
Russia announcement - will Putin keep his hand on the levers of power as prime minister?
5) Islamic fundamentalist terrorism continues as it does so, people realise it is not the poor and dispossessed who are the instigators, but the educated middle classes. A list of some of the countries that have been hit this year (some more than once)
Posted by: AYC | December 12th, 2007 at 11:51 am | Report this commentUK attacks - continuing to shape public debate in the UK
Algeria
Pakistan
India
Morocco
Turkey
Gaza
Israel
Maldives
Holland
Philippines
Dear Sir,
I can’t really talk about most of the items you’ve proposed. One I know well is the case of Mr Sarkozy. So far he does not deserve to be on your list (next year maybe).
In these first 6 months he totally failed to deliver important socio-economic change. Fundamentals are just as bad as they used to be (education, government debt). So on the short run, France is unlikely to grow enough to suddenly shift the balance of power in the EU let alone in the world.
The fact that he moved closer to the US has bear next to no consequences. As a comment above said: more heat than light.
Best
Posted by: Maharbbal | December 12th, 2007 at 1:53 pm | Report this commentDear Sir,
I can’t really talk about most of the items you’ve proposed. One I know well is the case of Mr Sarkozy. So far he does not deserve to be on your list (next year maybe).
In these first 6 months he totally failed to deliver important socio-economic change. Fundamentals are just as bad as they used to be (education, government debt). So on the short run, France is unlikely to grow enough to suddenly shift the balance of power in the EU let alone in the world.
The fact that he moved closer to the US has bear next to no consequences. As a comment above said: more heat than light.
Best
Posted by: Maharbbal | December 12th, 2007 at 1:58 pm | Report this commentI think your provisional list is a little short on major international political developments. I would argue that something relating to Russian foreign policy does indeed deserve inclusion, especially given the possibility of renewed crisis in the Balkans. This should not be the announcement of Putin’s chosen successor; Medvedev’s election will not herald a shift away from the Kremlin’s increasingly confrontational international stance. Instead, I’d back your tentative suggestion about Putin’s Munich speech. This was truly momentous event that aptly symbolises Russia’s feverish determination to reestablish itself as a major global power. The importance of this speech was largely overlooked at the time. I feel that its significance will only be fully recognised in the years to come.
Posted by: James Brown | December 12th, 2007 at 2:09 pm | Report this commentNon-events like the rise of Sarkozy and the fall of Blair are of interest only to the dwindling number of people who still believe that the world centers on Europe. There are not too many of those left on the side of the Atlantic from which I am writing. Nor, I suspect, are there a a great many left in the rising nations of Asia, the Persian Gulf and, yes, Africa, who think so either.
Having said this, I will readily admit to being biased in favor of giving greater importance to events in America that perhaps they deserve, in view of the declining influence and respect worldwide for the world’s largest debtor nation and certainly one of its most belligerent. This is even being reflected in the diminishing amount of space given to events in the US in the news and letters pages of the FT (but not the opinion page).
However, I believe that there are two things going on in the US which will continue to be of major world-wide significance. The “surge” in Iraq is not among them. I would call it the “sputter” instead. The American empire is on its way out, regardless of whether the monthly death tolls in Iraq fluctuate, like the stock market, up or down. Even if the US “wins” in Iraq, to use the somewhat quaint term favored by the hard neocon right, whatever government results in that country is virtually guaranteed to fall far short of the US client state that Vice-President Cheney and his hardy band of American Enterprise Institute hawks still believe can be set up after a sufficient number of US soldiers and Iraqi civilians had died. Even now, the Iraqi government is getting closer to normalizing relations with Iran and China; not, one presumes, the original premise of the US invasion.
The two US events of 2007 that really do matter are, obviously, the subprime mortgage crisis and, less publicized internationally, the US move toward dictatorship. The subprime mortgage crisis is the equivalent of a financial hurricane Katrina for America’s minorities and disadvantaged. This crisis is exposing the extent to which America’s financial system, and by extension, that of much of the world, depends on outright fraud perpetrated by sophisticated financial institutions on those who were least able to protect themselves against predatory lending. The Bush administration, as usual, is seeking to bail out the big banks and other lenders who are mainly responsible for this scandal, while protecting as few of the victimized homeowners as posssible.
The other main event, as I have mentioned, is America’s move toward dictatorship. True, some of the outward forms of democracy are still there-for now. But how can any country whose main topic of political discussion is which forms of torture to use be called a democracy in reality? Torture, of course, is only one aspect of the loss of freedom in America. As Russia also moves toward dictatorship and China continues to back up some of the world’s most despicable regimes while continuing to repress its own dissidents, are we moving toward Orwell’s world of Oceania, Eurasia and Eastasia? We will doubtless begin to see some more answers to this question in 2008.
Posted by: algasema | December 12th, 2007 at 2:26 pm | Report this commentAt least two here have had high expectations for Sarkozy, and on that basis I would agree with Maharbbal that he is not worthy of mention. However, Sarkozy’s rise to power is an incredible and destabilising story, particularly for the EU.
Prices in Paris are on the rise, while unemployment is reported now under 8 percent. Sarkozy policies are contributing more to the first observation than to the second, for which de Villepin deserves the credit given standard lags. By May of next year, we should have the true economic measure of this clever man.
Many here clearly now see the political measure of this new little Emperor. Yet the French public seems uncharacteristically content to cede their grand political institutions and broadly based administrative governance to le Président.
Jacques Attali cites in his recent book an account of when a young Sarkozy joined Mitterrand on a flight and showed off a bit of his quick grasp of message and boundless ambition. Mitterrand told Sarko he would go far, but Attali recounts the gestures that suggested the former president was less than impressed with what was driving him.
Worst case argument for keeping Sarko on the list: 2007 is like 1809. Best case: 2007 is analogous to 1851. Either we likely face 1814 or 1871 by 2010.
Posted by: WCM | December 12th, 2007 at 2:56 pm | Report this commentIt’s a bit of a fashionable concern, but 2007 was also the year that sovereign wealth funds really begun to move into public consciousness. These funds, particularly those in the Gulf, raise all sorts of ‘national security’ fears among the paranoid, and this has become a useful trope for economic nationalists. But SWFs have proved useful in recent weeks in keeping Citi and USB solvent.
More importantly for the economic and political stability of the Middle East, SWFs offer oil producers the chance to smooth their economic consumption. They could be part of the solution to the long-term Middle East challenge of young, underemployed populations in search of wealth and opportunity.
Posted by: Simon | December 12th, 2007 at 3:04 pm | Report this comment1) Musharaf’s mini coup. Probably a turning point for Pakistan.
2) Sub Prime Crisis. A turning point for the world economy. The US resigning from the post of consumer of last resort, at the same time as allowing the dollar to fall. Making it quite likely the dollar will no longer be THE reference currency in the same way it has been for decades.
3) Hamas takeover of Gaza. Is there any real reason to believe the Palestinian territories will be reunited? The end of a window of opportunity for a two state solution.
4) The oil price surge. The first time in over a century when what China did was probably the most important factor in a world market that interests everyone.
5) the surge in Iraq. This definitely appears more successful than I expected. I fear this may be because lots of mad jihadis have now run off to places like Algeria to plant bombs. i.e. another dispersal of the struggle. If it is successful for the reason George Bush thinks, then it still makes the list.
What could turn out to be more important than any of that is the non event of action to curb global warming. There hasn’t been any real action. Another year wasted.
Posted by: Dafydd | December 12th, 2007 at 3:16 pm | Report this commentI would consider the rise of Sarkozy and the stepping down of Blair to be incosequential– really, who cares and what, if anything, has changed in any monumental way as a result of these two events?
However, I would like to note that the following events are going to have significant effects later on:
1)The decline of the Fund
The following items are noteworthy:
—the appointment of Strauss Kahn as the MD of the IMF who was appointed by the G-7 on a manadate of cutting staff (15 % or roughly 300-400 staff members out of a total of some 2400);
—the refusal by G-7 countries (notably the US and UK) to let the IMF sell any of its gold reserves which would effectively have allowed the IMF to develop a relatively more independent voice– instead its dependence (and hence irrelevance) is ensured in the following decades.
— the appointment of Simon Johnson an intellectual non-entity as its Chief Economist, suggesting that other more heavy weight candidates could not be persuaded to join (or were unwilling to work with the institution)
—–central banks, including the ECB, around the world are coordinating to deal with the financial market turmoil in the world but the IMF is nowhere in sight.
— the huge reserves available at the disposal of China and other emerging markets/oil producing economies, their willingness (specially China) to lend to emerging markets without conditionalities unlike the Fund
In short , I think 2007 marks the year where the Funds decline (in economic relevance, power, prestige and human capital) becomes more visible.
2)the rise of pro-democracy movements (e.g in Pakistan and Burma), and at the same time, the swing in international support towards dictatorship (USA, UK, EU for Musharraf; France for Russia,China and India for Burma).
3)The other usual suspects for the most important things in the year: the emerging markets and China humming along
4) the rise in commodiy and food prices (also linked to the environment) - begs the question of are we looking at future of environmental refugees and famines?
Posted by: Tehmina Shaukat | December 12th, 2007 at 4:02 pm | Report this commentI would proffer that the story “Blair Steps Down,” is not germane - that hand-writing has been on the wall for a number of years. Rather, it’s how badly Gordon Brown has wasted his poltical currency in such a short time. That’s the story. Yet, it’s never easy to follow a legend.
My submission for a top story of 2007 is this: the failure of the US and EU to formulate an effective energy policy, and the corresponding consequences to foreign policy, e.g., the rise of Russia, Venezuela, and Iran.
Posted by: LSS | December 12th, 2007 at 5:53 pm | Report this commentLSS–a good twist linking many of the threads in this blog!
Posted by: WCM | December 12th, 2007 at 6:04 pm | Report this commentIndia: the USA’s appreciation of India as a major power by way of the nuclear deal. Ok, it’s not “operationalised” yet (and may yet fail), but fundamentally it is symbolic of the shift of India/US geopolitics on to a new paradigm, with concomitant regional and global significance.
Posted by: IPSS | December 12th, 2007 at 7:41 pm | Report this commentHere is a cluster of events and processes which will feed into the global scene for some time.
1) The subprime collapse and the consequent enfeeblement of some strong financial actors
2) SWF: The sovereign funds will “renationalize” across borders.
They will have huge political implications.
3) The coming out of Russia as an assertive force in the security area.
(It could be marked by Putin’s Munich Speech). In addition qualitatevely their diplomacy outshines everybody else’s.
4) The comimg out of China as an assertive international investor especially in Africa and elsewhere.
I believe we are looking at the demise of the IMF.
5) The implosion of the European Social Democracy at the Political level and the beginnings of new left formations : Merkel is moving to the center and the new german left is vacuuming adherents from the SDP.
Similar events are happening in Italy and in Greece. The new actors are mainly the unions here.
These factors can be taken in combination to reach some interesting conclusion.
Posted by: Max | December 12th, 2007 at 8:36 pm | Report this commentHamas’ “seizure” of Gaza and the serious rupture of relations between Hamas and Fatah in Palestine should be included in your top five, because it marks a significant change in how the world views the Palestinians - i.e., not as a united undifferentiated mass of people but as comprising groups with different agendas - as well as a change in how Palestinians regard themselves. The Israeli-American-Fatah proceedings at Annapolis were a direct result of the fear, on the part of those parties, that the “Hamas-Iranian-Hezbollah” axis is dangerously ascendant.
Posted by: SM | December 12th, 2007 at 9:43 pm | Report this comment.
O.K. here we go
1 the surge …its end game and hardly change things
2 sarkozy elected …euromarginal, with the twiddle-dee merkel
3 blair step down …..same as above , Brown will do an imitation
4 flotation of petrochina ….Asia needed a center ,Japan didn’t ,couln’t ,woudn’t
but when China start throwing it’s weight in the financial first league, bye bye Europe
5 subprime crisis…….the start of a recession or the great depression !!?? there are enough issues pending to create a vicious feedback
So it’s 4 and 5 for me
a couple more
6 …the price of food , last year crisis was due to bad weather and ethanol production, this year the hight price of energy will keep ,through the world , the famillies food budgets larger with less money to spend ,a drain on standards of living
7 … oil supplies are going to be tight , the prices might seriously rise ,the only hope ( !? )is a large decrease in demand
8 ….Russia is thoroughly cheesed off with western europe and the U.S. in particular
Posted by: jeannick Guerin | December 13th, 2007 at 12:30 am | Report this commenttheir thinking goes ” it’s more than time to get a bit of respect with those clowns and stop being a door mat !
if the best way to be left in peace is to put some steel under their troat ,so be it , it will keep everybody nice to each other “
How about the CIA’s revelation that it destroyed interrogation tapes? That could finally trigger an investigation with teeth into the Bush Administration’s breaking of US and international law on mulitple fronts. Ultimately it could lead to war criminal prosecutions.
Posted by: Asp | December 13th, 2007 at 2:22 am | Report this commentThe big story that includes all the other stories, is the widely held perception that the United States of America can no longer cut the mustard.
America’s decline colors and links together all of your five points and must be “the” story of 2007.
Posted by: David Seaton | December 13th, 2007 at 7:08 am | Report this commenthttp://seaton-newslinks.blogspot.com/
All I’d say Gideon, is important to whom? 4 out of the 5 events you quoted really gravitate around America and the fifth (Russia-Ukraine),is of little concern to 75% of the world’s population.
Perhaps what would be more enlightening and entertaining would be to describe this time around major sea changes, strategic economic shifts, political changes etc, firstly, - and then find “important” events that illustrate these tectonic changes - for all people across the world. I think more folk cld then identify with your conclusions.
For example if you had suggested that we are seeing the decline of international oil coys’ power in relation to the growing worldwide emergence of national oil coys over the last year(s), then the Gazprom-Ukraine event would have more resonance to people in China, India, Venezuela - who may then ponder about their own national energy giants and how this economic shift effects their lives and their country’s interaction with other nations around the world.
Just a thought.
Tim
Posted by: Tim | December 13th, 2007 at 9:37 am | Report this commentTim - shouldn’t that be 1 out of 5 events that “really gravitate around America”. The first four events happened in Iraq, France, Britain and China - and three of them had little or no American involvement.
This is a fun exercise, but bear in mind Zhou Enlai’s famous verdict on the importance of the French Revolution - “it’s too early to say”. Who knows what events of 2007 will make it into the textbooks of the 22nd century?
It would be nice if 2007 is remembered for scientific and technologoical progress rather than the usual dreary round of politics and violence. But since science and technology are not my area of expertise, the best I can think of off the top of my head is the accelerating spread of Facebook.
Posted by: MR | December 13th, 2007 at 9:57 am | Report this comment.
Great idea Tim ,
let’s open our wings and soar in the blue yonder
1 The american crisis ,
the usual recourse to force as diplomacy has hit some snags ,such as bankrupting the currency and being rather underwhelming
the U.S. has now a seriously depleted image of power ,it will make all endeavors more expensives
2 the utter wreck of the europeen project ,
it is now little more than the provincial branch of NATO ,shorn of ressources and not dissimilar to the old holy roman empire ,
3 the rise of the east ,as foretold by Nostradamus “The oriental shall rise from his seat”
..whatever !!!
the good thing about vague rambling is that one has a large bag to stuff things in ,
where does the east start ,is Russia east ,the old byzantine eagle ( nicknamed the chernobyl chicken ) look both east and west .
4 the pouring of petro-money to some seriously nonwestern contries , some trade groveling is on the cards , with the furious selling of military toys , weapon companies should be a good investment
5 the failure of any significant climate control ,
everybody is guilty from the anti-nuclear greens to the U.S. and Chinese government , oh well it was to be expected , people are crazy and selfish !
.
Posted by: jeannick Guerin | December 13th, 2007 at 10:55 pm | Report this commentA few other ideas:
1) REACH finally becoming law.
Posted by: Jerome a Paris | December 14th, 2007 at 9:07 am | Report this comment2) oil production declining for the second year running
3) China becoming a coal importer
4) the end of the last Greenspan Bubble
5) Artic ice sheet melting to a record low surface.
There are many good thoughts and phrasings here. Jeannick’s rewhet my interest in the thread.
The Surge: As it is law-and-order and included no efforts on the part of the US to build/advance better governance and transparency over the economy, and particularly oil, I feel it does not DESERVE mention. Richard Armitrage is on the interview circuit now saying that it is still far short of where it should in law-and-order terms. He further sees cause for a break up. Interesting Post-Bush-neocon messages he tries to carry these days. He represents Conoco now.
Islamic terrorism/jihadism, in so much as these terms coin what the neocons think is the Enemy, is certainly not a new development, and arguably a diminishing trend. Again, as I said before, I hesitate to credit the Surge, but see exhaustion on key battlefields and a sense that the US-neocon enterprise is imploding on its own a bit.
Looking forward to your piece! Merci d’avance!
Posted by: WCM | December 14th, 2007 at 11:32 am | Report this commentAll credit to Tim ,
While the U.S. friends would have a great sensitivity to Iraq , I have the feeling it’s getting to the end game ,the U.S. ,like Saddam ,ruling through the local big men
the receding of the Neo-Con crowd seems final ..?! the coming election will probably be fought on economic and local issues by traditional conservatives on the republican side
Very serious budgetary issues have to be considered ,war has always been a ruinous exercice .
The British are probably looking at some way to lessen the pain , even the mighty U.S. army might have to seriously consider it’s bottom line , that would means a greater care given to diplomacy before engaging
there is a tidal wave of power-money going east , the last time ,after 1973 ,the west responded by manufacturing it’s way out of the crisis and came out stronger .
The future is very foggy on this one . the size of the problem is larger , the energy resources then present are gone and so is a large part of the manufacturing .
what will happen to the american ( and europeen ) car industry , this borrowing crisis will not help GM or chrysler , the high price of gas has got to hurt them badly
the oil crisis is the flip side of the climate crisis , this last one will be milked for all it’s worth by the governments
Posted by: jeannick | December 14th, 2007 at 9:57 pm | Report this comment….your standard of living going down and your energy bills going up are to “SAVE THE PLANET”
it sound better that “we are incapable of doing very much about anything “
Mr. Rachman, you seem to be focusing on events…how about a confluence of trends?
1. Securitization crisis. Its a lot more than sub-prime. Thats just where it manifested first. Its a $400 BB and counting train wreck of high finance’s most modern creation for unlimited funding and fees.
2. Oil has doubled from $50 BBL range to near $100 in 07. Its quadrupled in 4 years. No matter ones bias, you need to sign on to concepts of peak oil. Supply / demand imbalance is here to stay and will get worse.
3. The sharp fall in the dollar; nascent evidence of multi-market recessions forming; reserve banks limited options to band-aid correct.
4. Continuing evidence of global climate change brings this costly issue to the forefront of politics and planning.
5. If we must have an event, I would take one from GWOT. The Saudi’s have supposedly thwarted 2 large scale planned terrorist strikes on oil facilities in the kingdom in 2007. Whether its US tactics in Iraq or our allies in SA, our achilles heal is an incresingly fragile supply system with zero or even negative excess capacity, and our enemies know this and cannot be prevented from striking successfuly forever. Imagine a successful strke of this magnitude and a price spike to $250 per barrel… now that would surely make the list of the entire decade.
Thanks for your reporting and the wonderful insights of FT. The other posts were illuminating.
Posted by: J Johnson | December 15th, 2007 at 3:16 pm | Report this commentIn my opinion you risk missing the bigger picture by focusing too much on individual events.
Posted by: Patrick | December 15th, 2007 at 4:50 pm | Report this commentTwo subjects that only make your B-list are the growing agressiveness of Russia and Turkey’s fascinating balancing act between East and West coupled with the risk of invasion of Iraq.
I would have thought that, when history looks back on 2007, developments in these countries would be seen to have been on a knife-edge with the potential to affect the world.
.
All thanks to Tim
Since this blog is on foreign affairs , I assume straying too far onto economics or life style might be verboten
all coming events will take place against a background of climate change rhetoric and uncertainties as to the price and availabilities of food and energy , it looks like 2008 will be a bear year , possibly a polar bear too ,both Russia and the U.S.A. will have elections , the results are probably of no importance whatsoever
Really , the sea change seems to be a massive swing of productive power to the east ,
Japan ,as usual ,was a precursor back in the late 80ties
More ominous is the consciousness of this shift
The opening ceremony of the 2006 Asian Games in Qatar were a eyes opener , there was a distinct tone of militancy ” who need the west ” and a twinge of anti-White racism
The European dream of the Fourth Reich ,imitating the progressive First and Second has now degenerated in a free economic zone
Amorphous politics are hijacked by pro-Washington alliance of traditional followers like England and danemark joined at the hip to vociferous anti-Russians like the balts and Poland
the traditional core of Germany ,France and Belgium is in disarray , Germany has swung toward Washington as has France .
all are riddled by domestic problems and the very survival of Belgium can be questioned
Add a severe economic downturn and Europe become a witch-brew
Kosovo and the missile shield loom large in the coming year , more than their intrinsic importance it will be a test of Europe attitude to Russia , so far empty talks of strategic partnerships have been no more than glorious rags covering a lame and bony nag
The shanghai group is the nucleus of trouble ,so far it is only a diplomatic spare wheel , but the prospect of a military , political and economic entente between China ,India and Russia with Iran asking in ?!!!??
Posted by: jeannick | December 16th, 2007 at 12:51 am | Report this commentthat would be some bargaining clout
Gideon - 1 to 3 are in my view non events. Sarkozy and Brown will be primarily influenced by their nation’s strategic interests rather than by their own peronal inclinations. Any apparent policy shifts of global significance will be more style than substance! The surge represents an ineffective face-saving decoy that masks the real cause for the decline in violence - the real cause being the payoffs made and deals done with the Sunnis. The ’surge’ is spin and is designed to re-badge capitulation into military victory! Meanwhile Afghanistan is rapidly going down the tube! Dont let the spin win!
Petrochina is important because it marks China’s ascendance into the highest echolons of the corporate financial stratosphere notwithstanding its outlandish (and undeserving) valuation! This marks the next stage of China’s journey from commercial and industrial giant to true global power.
87 it was stocks and 97 currencies! 07 and its debt - Subprime is a potential achilles heal for the world economy and the impact could be even worse in 08 particularly if a US recession hits the mountain of outstanding LBO debt hard!
In place of 1, 2 and 3 - id say the re-appearance of an aggressive Russian stance vis a vis the West should definitely be counted
The second (and permanent) oil shock could be another - along with the rise of oil producing nations as regional power brokers - Venezuela, Iran, Russia, as examples
The definitive arrival of India on the global stage is another interesting development - esp in terms of capital flows, takeover activity, the nuclear deal with the US, etc. etc. Of course a US recession may hasten the flow of jobs being outsourced to India among other countries, and a political backlash may follow!
Regards,
Posted by: Lyndon D | December 16th, 2007 at 5:12 am | Report this commentLyndon
subprime, sarko and blair definitely!
but the surge is a non-event, i’d rather say the cia report saying iran has stopped its nukes.
and petrochina leaves me cold. isnt’ there another piece of biz news on china’s rise?
and wot about burma?
Posted by: alex | December 17th, 2007 at 2:07 pm | Report this comment