John Rapley
IT WAS a fairly good year for the world economy. The so-called jobless recovery did not deter Americans from taking advantage of cheap credit and rising housing prices to continue shopping. China's economy continued booming, Japan seemed out of the doldrums and Russia, basking in the glow of high oil prices, continued growing. Irritated by rising global demand and supply insecurity in several countries, oil traders bid the commodity to record levels on the world's principal exchanges. But by year's end, the oil price was settling back down.
Meanwhile, China's soaring appetite for industrial inputs drove commodity prices to record levels. This delivered the benefits of global growth to poor countries for the first time in years.
WAR AND ELECTION
The main stories in the U.S., of course, were the war and the election. Lingering American euphoria over the capture last year of Saddam Hussein soon gave way to dismay at the persistence of the Iraqi insurgency. The toll in American lives surpassed 1,000; the Iraqi death count was many times that. The rebels showed no signs of abandoning the battle, targeting foreigners and Iraqis working for the Americans. The U.S. handed formal power to the Iraqis in a rushed, hushed ceremony, and prepared for elections early next year.
If the prospects for the Iraqi polls do not look so good, the White House found some consolation in the Afghan vote. Their favoured candidate, Hamid Karzai, won a decisive victory in an election that, while less than perfect, was mostly peaceful and well-supported. However, the hunt for Osama still led nowhere. Not that it cost U.S. President George W. Bush at the polls. Despite his unpopularity, anger at the war and a record voter turnout, his campaign managed to energise conservative supporters with unabashed right-wing rhetoric. Republicans then slid on his coattails to solidify their control of Congress.
SURPRISES
Elections elsewhere delivered some surprises. Early in the year, a bomb attack disrupted the Spanish campaign. The prime minister apparently lost his party the vote when he clumsily tried to blame an evidently Islamist attack on a local rebel movement: he was obviously hoping to deflect attention from his unpopular support for the U.S. war in Iraq.
In Taiwan, a bizarre presidential election which featured a (weakly) attempted assassination attempt delivered victory to a secessionist candidate; by the autumn, though, nationalists seeking reunification with China restored their influence in parliamentary elections. Vladimir Putin won a huge victory in Russia's presidential elections. His popularity then plunged, as he mishandled a horrific terrorist attack on a school in southern Russia and meddled ineffectively in Ukraine's own presidential election. The African National Congress took firmer control in South Africa. India's ruling Hindu nationalists suffered a surprise defeat in nationwide elections.
Canada's voters, annoyed with the governing Liberals' complacency, disciplined them by reducing them to a minority but still did not expel them from office. South Africa continued its policy of more active engagement in African affairs, leading the African Union to greater involvement in Sudan's Darfur crisis and mediation in the ongoing fighting in Cote d'Ivoire. Eastern Congo, however, remained a tinderbox, with several regional players continuing to stir a troubled cauldron.
UNILATERAL WITHDRAWAL
Israeli Prime Minister Ariel Sharon pressed ahead with his controversial policy of unilateral withdrawal from the Gaza Strip. However, the sudden death of Palestinian leader Yasser Arafat created uncertainty in the region, as his would-be successors began clamouring for position ahead of next year's elections.
On balance, optimists could point to a year which saw rising prosperity globally, and more citizens of the planet living in democracies than ever before (a record tarnished closer to home, though, by the strange removal of Haitian president Jean-Bertrand Aristide). Pessimists, though, could point to some storm clouds gathering on a distant horizon. The U.S.'s twin deficits in its budget and current account showed no signs of abating. This diminished the confidence of global investors in the U.S. dollar, driving down its value. As the year ends, the dollar remains vulnerable to a run, leaving a question mark hanging over the global economy. So, 2005 could continue the positive trends of 2004. Or, it could not. One thing is certain, and that is that it will provide an interesting show.
John Rapley is a Senior Lecturer in the Department of Government, UWI, Mona.
