Rude Awakening in 2016

Rude Awakening in 2016

By: Erreh Svaia

“Reason has always existed, but not always in a reasonable form.”

Karl Marx

The world woke up on Monday 4th on the wrong side of the bed, the financial markets, those indicators that seem more often to control our lives every day, crashed at the news of China's growth not meeting expectations again, people tend to think that we are in perilous of a new world recession, the truth is that the 2008 crisis hasn't ended, it is still here and we all can feel its effects, China's sudden enormous economic growth was a bubble, a bubble that affected our vision and made us lost our focus, it gave Latin America's left wing populist governments the chance to grow and it also created the myth of the BRICS, in reality, that bubble has been bursting since 2015, when the growth rate in China started to slow down, now in 2016, we have to face the reality that the Chinese bubble could burst this time once and for all.

Add to that the fact that Japan and the European Union haven't been able to escape the recession since 2008, Japan, troubled for decades by the ghost of recession and deflation weren’t able to see the results of the applied “Abenomix”, and the European Union with the apparent handicap of not being able to take quick actions because of its size and it's heterogeneous composition looks unable to fulfill the expectations of its member, this year, the UK is having a referendum in order to evaluate its membership; Russia, Brazil, South Africa are in the same position they were before the Chinese bubble seems to confirm the situation; India, yes, India is still an enigma, although it looks that India economic growth could be the big surprise this year.

In Latin America, governments and people are turning towards the center right, it seems that almost a decade of economic growth would be lost and gone forever, the region seems as the one to grow less worldwide, and the chance of recovery is going to show in a very slowly way, Brazil, the region biggest economy, and for once, its biggest hope, is still realizing what happened within it leftish government, now plagued by endless accusations of corruption, Brazil still has to face some political struggle with the political implications against president Dilma Rousseff, and if that wasn't enough, Brazil will host this year the Olympics, an event that will put the country in the spotlight, and in an uncomfortable place, perfect for social upheaval; will the Pope Francis come to their rescue as he did before the World Cup?, The Pope will be apparently giving a hand to Enrique Peña Nieto Mexican government, a government of pure image that never managed to deliver its original promises, the structural reforms were deep enough or in the proper time in order to detonate true significant growth, endless accusation of ineptitude, corruption and the government far from reach polices has managed to white wash every ugly truth surfacing, but no one is taking responsibility for them.

In Argentina, new president Mauricio Macri is making difficult and painful moves in order to dismantle the bureaucratic system built by the Kirchners in order to align the country to a new dynamic and finally start developing economic growth after years of recession, for the whole continent, it will be a tough year, and the future of countries like Bolivia, Ecuador, Nicaragua and Peru is remains to be seen, as oil and gas prices continue to drop, weakening economies.

This year brought us also a new conflict in the already troubled Middle East, yes, a new one with a dispute between the two major Islamic leading countries, Saudi Arabia and Iran, one of them, SA, a USA ally, and the other one, a longtime rival, now hesitating to open its economy and create deals with the West, the cause, a dispute for religious conflicts after Saudi Arabia executed a Shiite cleric, the ancient fight of Sunnis and Shiites seems to be reactivating, putting heavy pressure on the region plagued by armed conflicts in Israel, Syria, the terrorist presence of the Taliban, Al Qaeda and Daesh, the Authoritarian governments in Turkey and Egypt, Iran is still under suspicion of developing nuclear weapons, while Saudi Arabia and the other oil producing countries face heavy debt, weakened by the world fall in oil prices.

The USA, although its economy gave positive signs at the end of 2015, but they are not convincing enough to foresee more growth this year, apart from that, this year we will either see the first woman president in the USA, or a somber return to a more conservative and nationalist government in the north neighbor, as Donald Trump seems to be inspiring the anti-establishment and hate tendencies apparently lying dormant in the USA.