Global Trends by Martin Khor

Monday 27 December 2004

2004 --- The year in review

It’s almost time to say goodbye to 2004, a difficult and anxious year for many people around the world.  George Bush was re-elected President, the Iraqis put up a stiff resistance to occupation, the Palestinian-Israeli conflict entered a new phase, the mighty US dollar declined, and East Asia looked ready to rise. 


It’s almost the end now of another year of global events and developments that have been exciting but laden with difficulties and anxieties..

The year 2004 was so full of ups and downs that many people feel they need the few days of rest before the New Year, to recover and recharge the energies to face the year to come.

The single event with the most global significance was probably the re-election of George W. Bush for a second term as United States President.  The voting was close and a recount is still going on in Ohio, the state which in the end decided the Presidency.

It was a result that depressed a lot of people around the world, as well as almost half the American voters who didn’t vote for him.

Bush and his small team of advisors have changed the course of US foreign policy, with an aggressive “you are either with me or against me” approach that has shaken the world. 

The new aggression was best exemplified by the doctrine of unilateral pre-emptive strike, which was so devastatingly implemented in Iraq.  Countries like Syria, Iran and possibly North Korea could also be targeted next.

Bush is unpopular and feared in most parts of the world, so it came as something of a shock that Americans could re-elect someone who had misled their country into war, violated human rights, brought American capitalism to new heights of cronyism and the economy into huge budget and trade deficits. 

The year brought a new understanding that it is not only the Bush administration but also a majority segment of the US population that have views and positions that differ from most parts of the world.

However, even more surprising in 2004 was the resilience and growth of the resistance movements in Iraq.  They somehow organized themselves with deadly effect against the small and dwindling coalition of occupying countries led by the US and United Kingdom. 

The killing of 26 people, mostly Americans, in an army canteen near Mosul last week exposed how vulnerable the occupation forces are, and how effective the resistance forces can be.

Thus, even as the year confirmed how much of a sole super-power the US has become, it also showed the limits of American might in the face of national or local resistance on the scale the Iraqis have waged.

Bombings and other acts of terror continued to grab headlines, and they happened through the globe from Spain and Israel to Pakistan, Indonesia and the Philippines, increasing people’s sense of insecurity.


The acts of terror by individuals and militant groups were accompanied in 2005 by acts of terror or abuse of human rights by the state in many countries. 

Perhaps the most shocking scenes were the descriptions and pictures of the torture and abuse of prisoners held by the American forces in Abu Ghraib prison in Iraq  and Guantanamo Bay in Cuba.  The Americans’ November offensive in Fallujah, which killed more than a thousand Iraqis, also stood out.

The Palestinian-Israeli conflict continued to occupy centre stage, with the suicide bombings by Palestinians more than matched by the assassinations, missile hits and leveling of homes and buildings in Palestinian territory by the Israeli government.    

The death of Palestinian Authority President, Yasser Arafat, deprived the Palestinians of a leader who dedicated his life to their national struggle.  It is hard to predict how effectively a new Palestinian leader will continue the fight for the Palestinian cause, and how seriously the US and UK will push for a solution.

In Asia, new political leaders were elected to power:  Prime Minister Manmohan Singh in India and President Susilo Yudhoyono in Indonesia.  By year end, it was still too early to tell what difference they would make. 

In Malaysia, the new Prime Minister Datuk Seri Abdullah Badawi consolidated his authority and popularity in 2004.   The release from jail of former deputy premier Datuk Seri Anwar Ibrahim was also a major event, which some political analysts have predicted will change the national political equation.

On the economic front, the World Trade Organisation somewhat recovered its step by concluding a “package” of agreements at the end of July on how to proceed with negotiations, after the collapse of its Ministerial meeting in Cancun in September 2003.

The year’s more publicized development was however the proliferation of bilateral and regional trade agreements that now threaten to over-shadow the WTO.

Fluctuations among the major trading currencies, namely the US dollar, the euro and Japanese yen, caused an emerging sense of instability.  By year end, the US dollar had weakened significantly and seemed on the the verge of an even steeper fall, as fears increased that the record trade deficits will not be covered by new foreign investments in future.

With the dollar in a downward spin, and the European and Japanese economies in the doldrums, the Asian countries were the best performing in 2004.  In particular, rapid growth in China generated more demand for commodities and other imports from other countries.

The year ended with Asia looking again like the growth centre of the future.  The growing confidence was articulated by a proliferation of economic agreements between Asean countries, China and India.

A historic decision was made at the Asean summit in Vientiane at the end of November that a first ever East Asia Summit would be held in Kuala Lumpur next July.

The expectation is that Asean plus its three North-east Asian partners (Japan, China, South Korea) will strengthen political and economic ties and cooperation, so as to better face the challenges and dangers of an unstable global economy and the new international political scenario.

All in all, it was a difficult year that is about to pass, and it looks as if another tough year will soon be upon us.