Looking back on 2016 and ahead to 2017

By Sumantra Maitra
0 Comment(s)Print E-mail China.org.cn, January 1, 2017
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Fast-departing 2016 will be remembered as an epochal year in world history, like 1917, 1945 and 1989. However, the unraveling actually started in 2004 without most people noticing.

But no one, not even us columnists from our lofty heights were prepared for what happened. So, what went so badly wrong? Let's take some individual cases to seek an explanation.

Nationalistic sentiments were supposed to make a comeback sooner or later. The reason was forced social construction and liberal hegemony. In Europe, there had been massive elite-driven social engineering seeking to dictate terms, with regards to fiscal policy, immigration, foreign intervention elsewhere and changing social and cultural norms.

Unfortunately, the problem with Europe was that it is really a socially conservative place. The forces of nationalism were only lying dormant anyway, and came back the moment an opportunity occurred.

People are angry with the forced assimilation programs, which were essentially elite-driven and had no backing among common people. The majority of European population had no idea that Angela Merkel would open her doors to millions of migrants, most of them not even from warzones, and would essentially take it upon herself to decide the issue for the entire continent.

The resultant mayhem, including waves of crime, rape and terror attacks inevitably led Europe on the verge of disaster. Country after country has succumbed to a nativist backlash, something realists had been warning about for a long time. The chance is that this will continue in 2017, getting steadily worse.

On the economic front, as well, it is just commonsense that without a common fiscal and tax policy, there is no way a common currency can succeed. Now, for that one needs to have a United States of Europe or a federal structure, which is not going to happen anytime soon.

This means, the common currency in Europe will be doomed to be enmeshed in differing levels of labor mobility, comparative advantage, efficiency, and productivity, and will never be able to spur uniform growth across the whole region.

This means: much fewer jobs, and more resentment, among native Europeans about incoming migrants, who might or might not take the low income jobs they could have done. That's not going to change anytime soon, either.

Across America, the election of Trump threw everyone off track, however, it is not quite clear that Trump will radically alter U.S. foreign policy; at least, there's not much evidence yet. His financial and economic policies will be led by traditional supply-siders, and some protectionists. Yet, it's unlikely they'll be able to achieve much active policy change, based on the structural constraints of trade.

In foreign policy, Trump is again trying a crude version of Madman Theory, but again, it's unlikely he has the finesse in terms of foreign policy patience and the knowledge of Richard Nixon who invented this strategy.

Also, Trump's cabinet is full of Huntingtonian crusaders, and one single major terror attack will keep them occupied for the next four years. In fact, other great powers might draw solace from the fact that he likes deals, and will be in one if offered a good enough bargain, and promoting democracy and human rights don't matter much to his transactionally-based mind.

However, it's not all gloom. Asian geopolitics remains stable. The AIIB is rolling, and more and more countries are interested. The trend of the economic center of gravity passing eastwards is irreversible, and will survive if careful policies are followed.

Innovation will drive key economies, and more and more people with brains will flock to China and India, if the two countries can provide sufficient money and research opportunities. Automation will take over ever more jobs in the West, which means the focus of manufacturing remain East.

Having said that, every new year comes with hope and trepidation. While most countries are only looking to survive in an anarchic system, major wars can easily start over miscommunication. And nothing in this planet is now of great importance than to have constantly-open backdoor channels of communication between the great powers. Only then can uncertainty be tackled.

Sumantra Maitra is a columnist with China.org.cn. For more information please visit:

http://www.china.org.cn/opinion/SumantraMaitra.htm

Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.

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