Global Trends by Martin Khor

Monday 29 December 2003


BLURB:     The old year is about to ring out.  The new year is almost upon us.  What can we expect in 2004?   The results of the Presidential elections in the US will have a larger impact than anything else on the shaping or re-shaping of the world.  Malaysia will have its own elections too.  On the economic front, there is much uncertainty, but also the possibilities for change.  All in all, it will be an exciting roller coaster time ahead for us.


Now that 2003 is almost behind us, what does the new year hold in store?

First and foremost, the world will be watching closely the presidential elections in the United States.

And rightly so, for the result of this race will have such a major impact on the US but perhaps even more so for the world. 

 It was a common belief that it doesn't really matter who becomes the US President, for there isn't much difference between Republicans and Democrats, and the President -- whoever he or she may be -- will in the end carry out the same programmes as his or her opponents, predecessors and successors.

But the Bush presidency has changed this traditional view.  Bush and his close circle of neo-conservative allies have certainly made a difference in the three years they have been in power.  

If Al Gore had become President, arguably his response to 11 September might have been different.

The US may not have embarked on an attack on Iraq without a United Nations sanction.  It may arguably not have adopted the doctrine of pre-emptive strike, in which the US can strike or invade another country and change its regime and entire system on the ground that the country could potentially be a security threat.

The US under a Gore would likely have been more respectful of the United Nations and the opinions of other countries.

Under Bush, US economic policy and practice also changed dramatically, with big tax cuts benefiting the rich, a dramatic rise in military spending, and an incredibly widening budget deficit.  

Just as significant (many would say outrageous), Bush took crony capitalism to new heights, with companies associated with his Vice President and other cabinet members and advisors winning contracts worth many millions or billions of dollars, especially arising from the Afghanistan and Iraq wars.

Bush's policies on the environment are also seen as a disaster, as pro-corporate interests have veered his government away from environmental regulation at home and abroad, as witness the US withdrawal from the Kyoto Protocol on climate change.

Even corporate figures like George Soros are viewing the Bush policies as disastrous both for the US and for the world.  Soros is helping to fund an anti-Bush election campaign.

There is dread in many countries that another five years of a Bush presidency (2004 plus a new term) could cause the US to be even more of a global bully, tightening its hegemonic grip, resulting in a global law of the jungle, where the strong can take over the territories and property of the weak with impunity.

Thus, the overwhelming question of 2004 is whether there will be a "regime change" in the US through the presidential elections, or whether we will have another Bush term, with all the consequences.

Bush is the favourite to win again, and probably he will, especially since the Democrats do not have a candidate that at this stage seems capable of unseating him. 

Economic growth seems to be picking up in the US.  With Saddam Hussein captured, the US has its war trophy, so many Americans can maybe set aside the awkward question why it invaded Iraq in the first place since there is still no evidence of weapons of mass destruction. 

But it is early in the elections race and many things can happen to disrupt the Bush campaign.  Maybe a credible Democrat leader will emerge.  Maybe the Iraqi resistance to occupation and growing US casualties will sour the American mood. 

Just as important, will confidence in the US dollar continue to decline, causing turbulence in foreign exchange markets and a contraction in funds flowing to the US?  Could there be a new financial crisis, this time in the US?   Would that have an impact on the polls?

If a new US President emerges from next year's electoral race, then manyu people around the world will hope fervently that the US will make a U-turn back to international cooperation, to a cleverer and more effective way of combatting terrorism by fighting global injustices and inequities, and to stopping the crass cronyism in the present US economy.  

Also interesting to watch in 2004 is whether the European countries can get their act together and be a more effective counterweight to the US. Germany and France are eager to have a stronger Europe, including with more autonomous military capacity, so that Europe need not be so dependent on -- and thus subservient to --  the US.

But many other European countries, including the UK but especially the newly independent East European nations that will soon join the European Union, are more inclined to accept and to want to remain under the shadow of US dominance.

The developing countries have also recently started moving more effectively as a bloc, at least on trade issues.   It remains to be seen if the various groupings that formed at the end of 2003 will survive and strengthen in 2004 to make a real impact.

At the World Trade Organisation several new formations have emerged.  They include the Group of 20, involving big countries like Brazil, India, China, South Africa, Nigeria and Indonesia, on the agriculture issue;  the Core Group on Singapore Issues (which Malaysia coordinates);  and the Group of 90, being a big alliance of the African Union, the ACP (Africa, Carribean and Pacific) Group, and the Least Developed Countries.

In 2004, can they get a notch higher in influence, by moving from a reactive stance of blocking bad proposals of the rich countries, to a pro-active stance of putting forward and pushing their own positive agenda?  If they can, and if the rich world finally listens, there is hope for reform of the system.  

In contrast, if the developed countries become more hostile to the rise of the developing world, then there will be deadlock in the WTO and an attempt by the powerful to get their way through other means, such as bilateral treaties and policy conditions attached to aid.

There will also be a fair chance of bumps and even crises in the financial arena in 2004.  We can expect more exposure of financial frauds and corporate wrong-doings, such as is now being uncovered in the Italian company Parmalat with up to US$10 billion missing.

It will be touch and go whether the US dollar will avoid a meltdown of the type other countries have undergone. If that happens, will there at last be a move to reform the global financial system, which too much resembles a casino?

In 2004, China will remain the world's fastest growth engine, with India not that far behind, and Southeast Asian countries will be hoping to get trade benefits from this.

There will be strides towards regional trade and economic agreements in Asean and Asia.  But the Asian developing countries moving in this direction should prepare well for the negotiations so as to avoid future problems such as excessive import competition displacing local industries.

There will be more health and environmental scares in 2004.  The new year should see a return of public attention to these issues, as many aspects of health and the environment are at crisis point.

In February, Malaysia will host the international big meetings of the Biodiversity Convention and its Cartagena Protocol on Biosafety.  It will be an important occasion to review the deteriorating state of the world's biodiversity and to commit to action to reverse this trend, and to promote sustainable ways to grow food and to use and conserve the forests, mangroves and seas.

How governments cope with SARS, HIV-AIDS and other diseases that may pop up in 2004 will probably determine the people's future well being more than anything else.

However, there is no escaping the fact that 2004 will be another year dominated by politics and international relations. 

Malaysians like everyone else will be watching whether the Iraqi resistance is maintained, and whether and how the US will transfer power to Iraqis;  whether violence will erupt again in Afghanistan;  whether the Palestinians will be able to move forward even a little in their struggle for statehood and freedom from occupation, and whether other countries, especially the US, will finally help them instead of giving Israel a blank cheque to do as it pleases.

In Malaysia itself, 2004 will be a defining year in politics as the General Elections will be held.  The Prime Minister, Datuk Seri Abdullah Ahmad Badawi, would want to put his own stamp and style on the Malaysian political and social scene through a resounding win.  On the other hand, the Opposition will want to keep the flame of their message and battles alive. 

The new year will provide the answer on how the citizens and voters will respond.

As Malaysians say goodbye to the old year, only one thing is certain in this period of uncertainty.  The new year may or not bring better times -- but it will surely bring twelve interesting and exciting months ahead for us.