by Piet Coetzer

News overview: Emerging trends of 2012

A review of the year that was and what to expect in the new year

Gwede Mantashe
Gwede Mantashe.jpg

So far, this year will not be remembered in history as being dominated by one or two big events either domestically or on the global front. Rather it was a year of emerging trends as we move towards the midway mark of the second decade of the 21st century and sets the scene for what could be a very eventful 2013. 

On the domestic front the 2012 news was dominated by increasing signs that the governing African National Congress (ANC) alliance is experiencing what can be described as post-liberation stress syndrome. The symptoms include internal alliance and party tensions and leadership battles, emerging divergence of interests with these groups battling for dominance over policy direction and state resources.

There were also increasing signs of discontent peaking within the broader community as frustration has mounted over unfulfilled expectations that came with the advent of democracy, now almost two decades ago. Symptoms of this include endemic protests about service delivery and  living conditions in the sectors of mining and agriculture.

On this front, the relentless and continuing international economic crisis also did South Africa no favours, with unprecedented high levels of unemployment and especially of the youth.

Stalemates also developed, this year, in national debates on crucial issues such as to what extent should nationalisation of key economic sectors and/or state intervention in the economy and land reform take place. The national elective and policy conference of the ANC, starting this weekend, could set the tone about this for the next couple of years. 

Depending on what  compromises between internal factions are reached, it could also impact heavily on the future of the party and the alliance for some years to come.

On the international front the state of the global economy and regional conflicts against a background of intensifying competition for resources remained a dominant issue.

There is still no lasting solution in sight to the European economic crisis, with profound implications also for South Africa. America is heading for an internal showdown right now between its major parties in Congress over how the country’s unsustainable budget deficits should be handled. 

Nouriel Roubini, a New York University professor dubbed ‘Dr Doom’ because he was the economist who famously predicted the 2008/09 financial crisis, recently said he is sticking to his view that the global economy is on course for a ‘perfect storm’ in 2013. At the same time a senior economist at Old Mutual Investment Group South Africa (Omigsa) also warned that the best the world can hope for over the next few years is slow growth – and that is if nothing more goes wrong.

Roubini highlighted five factors that could derail the global economy:

  • A worsening of the debt crisis in Europe; 
  • Tax increases and spending cuts in the United States that may push the world’s biggest economy into recession; 
  • A hard landing for China’s economy; 
  • Further slowing in emerging markets and 
  • A military confrontation with Iran.

On none of these fronts do the prospects seem to be improving as 2012 draws to a close. In fact the recent conflict between Israel and Gaza was intimately linked to the tensions between Iran and the West. By supplying missiles for use against Israeli targets, provoking the eight-day conflict, Iran sent a message that it can open war fronts elsewhere if it should be attacked.

More of the same can be expected in 2013 and the Middle East and North Africa remain very unstable with Egypt seemingly in the greatest danger of descending again into internal chaos.

With the American and European economies struggling to avoid another recession and to restructure for sustainable growth, signs of a new world economic order continued. The Brics group of nations, of which South Africa was the most recent addition, moved closer during 2012 to wean itself from the domination of the American dollar.

During 2012 the international financial system, and the banks at the heart of it, came under increasing pressure for reform. This is a trend that can be expected to continue and intensify.

Africa emerged stronger during 2012 as a player on the international energy scene with regular news about new oil and natural gas finds. This will see the continent increasingly being sucked into global power politics and competition for resources.

The drought in America during its past maize harvest season again exposed the world’s vulnerability in food security. The effects of this will be felt for some time to come.

Lastly the economic and sovereign debt crisis in many parts of the world and the austerity policies to deal with it have pushed the issue of economic and financial inequalities to the forefront.

In many countries, including members of the so-called developed world like Greece, Spain, Italy, Portugal and more, it has led to social unrest. Expect social stability to remain under pressure across the globe.

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