Brendan Shaw
“The governments may be different. But the people actually always have one desire and that is to live and to raise their families in peace.”
- Mel McMullen, former WWII US fighter pilot with the ‘Flying Tigers’, October 2023
Mel McMullen, a former ‘Flying Tiger’ with the US war veteran who helped defend China against the invading Japanese army during the Second World War, neatly summarised what should be one of the guiding principles as we navigate the thorny global issues of 2024.
At the end of the day, regardless of where people live, what language they speak, whatever their culture or ideology, usually people just want to live a happy life and raise their families in peace.
As we enter 2024, there are many big issues where the question of how different we all are versus how much we’re the same will be a key strategic, social, economic, environmental and political question this year.
It’s worth keeping McMullen's words in mind as we face these.
Wars and hotspots
The New Year’s Day edition of the Financial Times had three stories all in the same screen about geopolitical hotspots around the world (and, no, Denmark isn't one of them ... ).
Source: Financial Times, 1 January 2024, www.ft.com
Russia’s invasion of Ukraine, the escalating Israel-Gaza conflict, and the ongoing territorial tensions between Taiwan and China are all contributing to global uncertainty and geopolitical risks.
If there was ever proof that we need to do better at recognising our commonalities rather than our differences, these examples help make the point. Strategic issues like these are likely to continue to provide a backdrop for 2024.
Decoupling the ‘non-binary’ global economy
News in the early days of 2024 that Chinese electric vehicle maker BYD had outsold its American competitor Tesla for the first time is emblematic of broader transitions happening in the global economy. China’s economy, along with those of other East Asian countries, is on the rise. (Notably, though, BYD is heavily backed by American investor Warren Buffett).
At least on a purchasing power parity basis, China’s economy overtook the US economy in size some years ago – about the time Donald Trump was US President, and India is fast catching up.
In a recent report, the World Trade Organization found that growth in trade between the US and China is slowing, while trade between like-minded trade blocs (defined as those who voted along similar lines at United Nations votes) is increasing. These blocs are trading more within their membership and less with other blocs. “There are the first signs of trade reorientation along geopolitical lines, indicating a shift towards friend-shoring,” the report said.
The head of the WTO, Dr Ngozi Okonjo-Iweala, has warned about the fragmentation of the global economy, saying that:
“opponents of fragmentation argue that it would be extremely costly in economic terms, offers dubious benefits in terms of security, and would unwind the growth and development benefits that economic integration has delivered for people around globe. Even worse, far-reaching fragmentation would make it harder, possibly impossible, for the international community to address challenges of the global commons.”
The world economy has become ‘non-binary’, in the sense that it is now multi-polar with a multitude of forces pulling it in all different directions. An imbalance in monetary and fiscal policy, ongoing wars in multiple countries, persistent inflation eating into the economic wealth of people, companies, governments and countries alike, and the renewal of nationalistic policies against a backdrop of decoupling and deglobalisation all make it a more fragmented and uncertain world.
Size of economy - China, India and United States (GDP USD trillion, PPP)
Source: World Bank. Data bank, https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD, accessed 4/1/2024.
Varying inflation rates across the world
All of these aspects of the non-binary economy haven't been helped by the historic surge in inflation in the last few years, initially spurred on by post-pandemic supply chain shortages, the war in Ukraine, and then accumulated substantial labour cost increases as workers endeavour to maintain the real value of their incomes and make up for low wage growth in years past.
While the International Monetary Fund projects lower global inflation in 2024, inflation rates are projected to vary markedly across the world.
World inflation rate (%)
Source: IMF Datamapper, https://www.imf.org/external/datamapper/PCPIPCH@WEO/WEOWORLD, accessed 4/1/2024.
Projected inflation rate by country, 2024
Source: IMF Datamapper, https://www.imf.org/external/datamapper/PCPIPCH@WEO/WEOWORLD, accessed 4/1/2024.
Immigration
In his 1993 book, Preparing for the 21st Century, historian and futurist, Paul Kennedy, predicted that immigration and the political issues around it would become one of the defining features of the 21st century.
He wasn’t wrong.
With globalisation, labour mobility, geopolitical instability, inequality, wars, ageing and demographics driving change, immigration has become a big issue in the world. Since the Covid-19 pandemic, this has only become more pronounced. The social, economic and demographic changes that are continuing across the world are driving some major population changes, leading to significant political issues in those countries.
Countries like Australia, France, Germany, the United Kingdom, and the United States are all currently looking at how to toughen immigration restrictions and impose more controls over who, when and how new immigrants come to their countries.
While things like employment needs, labour demand and skills are important factors here, in these countries the debate – to varying degrees – also involves culture and environmental factors.
Climate change
Of course, perhaps the biggest social issue that dwarfs all others is climate change. This is a fundamental issue affecting humanity’s survival and that of other species and environments on the planet.
Last year, 2023, was the hottest year on record, and probably the warmest year in 125,000 years.
Efforts under the Paris Climate Agreement to limit global warming to 1.5 degrees look increasingly like they will not be met.
Source: Our World in Data, https://ourworldindata.org/explorers/climate-change, accessed 4/1/2024.
The likely impacts of this are many and varied including more variable and violent weather events including droughts, floods and storms, widespread economic and financial costs across the world, as well as effects on human health. For example, the World Health Organization has deemed climate change to be a major threat to the global fight against malaria and has been blamed for a rise in dengue fever in Europe in recent times. Meanwhile, the WHO has also warned that heat-related deaths will increase five-fold by the middle of this century.
Ironically, while 2023 was the hottest year on record, it was also the year where global carbon emissions hit a new record.
Source: Our World in Data, https://ourworldindata.org/explorers/co2, accessed 4/1/2024.
Moreover, there were strong calls this year from various quarters, including the United Nations Secretary General, for countries to end fossil fuel subsidies. According to the International Monetary Fund, global fossil fuel subsidies hit USD 7 trillion a year - roughly equivalent to the entire combined annual value of the Indian and UK economies. That's how much the world spends each year on subsidising fossil fuels. The IMF has called on governments to introduce carbon taxes or risk ‘unsustainable’ fiscal hits from climate change.
As a global community, we are way off the mark here and unless radical action taken soon, the global community will suffer serious social, economic and environmental costs as a result.
Post-colonialism and the balance between East and West
One of the broader mega trends confronting many countries - high income and emerging markets alike - is the unwinding of the era of European colonialism.
For many centuries up to the mid-15th century, the center of the world's economic power and wealth was in the East. The Arabic world, Indian and Chinese empires dominated the world in terms of wealth, power and prestige.
Then, probably from the time Christopher Colombus accidentally stumbled across the Americas (he was looking for Asia) in 1492 up until the end of World War II in 1945, the European / Western countries controlled much of the world in a period of colonisation and colonialism.
Since the Second World War, the colonial era has (arguably) been unwinding as various emerging countries and cultures across the world have achieved independence, seen renewed economic growth and development, and notions of equality have haphazardly (sometimes dysfunctionally) spread through humanity. Witness the size of the Chinese and Indian economies vis-a-vis the United States as an example of this. One indicator of the changing situation in emerging markets is places like Hangzhou, Shenzen, Bengaluru, Hyderabad, Guangzhou, Sharja, Ho Chi Minh City, Shanghai, Kigali and Beijing in the list of cities with the fastest growing number of millionaires in the world.
Cities with fastest growth in millionaire population in the world, 2012–2022
Source: Rao, P. 2023. "Ranked: Cities With the Most Millionaires in the World", Visual Capitalist, https://www.visualcapitalist.com/cities-most-millionaires/, accessed 4/1/2024.
Countries all over the world are dealing with the aftereffects of the post-colonial era, whether it's the United Kingdom refusing to return the Elgin Marbles to Greece, rising protectionism in the United States and Europe in the face of competition from China, or Australia holding a referendum to enshrine Indigenous Australians' right to be heard in the country's constitution.
There's a tendency in some quarters to view this all as a zero-sum game where either the East OR the West must triumph. But the smarter approach - for humanity's sake - might be that we need to do a better job of looking for opportunities to make the world a better place for everyone.
Post-pandemic health systems
It’s remarkable that so soon after a global pandemic that had such a massive economic and social adverse impact on global society that the world is already moving on in the face of major issues in health sectors around the world. (Although experts will tell you that the ‘panic-neglect’ approach to pandemic preparedness has a long history).
Health systems the world over are suffering from the combined impacts of inflation, major workforce shortages, worker burnout, ageing populations, problems from post-pandemic mental health and non-communicable diseases, falling real workforce wages and health systems losing out in the battle for budgetary funding.
Countries saw health spending reach record levels during the pandemic, and while a reduction in spending can be expected as COVID-19 recedes into the recesses of our consciousness, maintaining health system investment in the future will be important.
Source: WHO. 2023. Global spending on health: Coping with the pandemic, p. 5, https://apps.who.int/nha/database/DocumentationCentre/GetFile/60563521/en, accessed 4/1/2024.
Last month in its annual health expenditure report, the WHO warned that maintaining health spending levels may be difficult given fiscal pressures faced by governments. But it warned:
"Amid this more difficult financing environment, a key challenge for countries will be to resist the urge to de-prioritise government spending on health. Doing so risks rolling back progress towards universal health coverage."
The good news is that some previously sidelined issues in global health are receiving greater attention today. Air pollution being one example. Recent data shows the life expectancy gains that could be achieved in cities around the world if they can reduce their air pollution to WHO recommended levels.
It is possible that one of the biggest single gains in life expectancy in the world could occur if India can get its cities’ pollution levels to WHO recommended standards. For example, residents in the national capital region of India around Delhi could live 12 years longer on average if they had cleaner air. In fact, the top 78 cities in the world with the most to gain in terms of longer life expectancy by achieving better air quality are all in India.
Potential increase in life expectancy if breathing clean air (years)
Source: Batra, A. 2023. "Mapped: Life Expectancy Gains from Breathing Cleaner Air", Visual Capitalist, 24 December, https://www.visualcapitalist.com/cp/map-of-life-expectancy-gains-clean-air/, accessed 4/1/2024.
Of course, progress on the global pandemic treaty will be critical to future health system resilience and pandemic preparedness, in a classic example of the need for more 'us' and less 'them' thinking. Learning the lessons from the COVID-19 pandemic, particularly the importance of international cooperation, is critical. The final text of the treaty or accord is scheduled to be discussed at this year's World Health Assembly in May in Geneva, but there are doubts over whether this deadline will be met.
A record year for democracy?
Against the backdrop of these and other issues, this year will probably set a record for global democracy. 2024 will be a unique year for democracy worldwide. This year around 2 billion people, half of the world’s adult population in at least 40 countries, will be going to the ballot box in national elections to vote for their governments. However, as experts have suggested, in a year when democracy should be celebrated as reaching a new milestone, there is instead talk of ‘democracy recessions’. These are a result of a rise in authoritarianism and illiberalism around the world, weakening institutional protections in a number of major democracies, and growing disillusionment among young people about democracy and the reasons for having elections in the first place.
And it’s not just the number of countries having national elections that is significant this year, but also some of the individual countries that are having them. The list of places that are likely to have their national presidential and/ or parliamentary /congressional elections this year include:
Bangladesh (January)
Taiwan (January)
Pakistan (February)
Belarus (February)
India (March)
Russia (March)
Ukraine (March, but TBC)
European Union Parliament (June)
Mexico (June)
South Africa (May - August)
Sri Lanka (March (parliamentary) September (presidential))
United Kingdom (probably autumn)
United States (November)
There’s more than a few crucial and controversial places holding elections this year. It could be that by the end of 2024, the world’s entire geopolitical map could be changed.
A range of issues are going to be at play during these elections, including globalisation vs nationalist tendencies (or ‘drawbridge up’ vs ‘drawbridge down’ perspectives), misinformation and fake news, social media, real wars, culture wars as distraction tools, and even the very future of democracy itself.
In a year where probably more people will have the opportunity to vote in national governmental elections than at any other time in human history, Flying Tiger Mel McMullen’s comments about all people around the world wanting to live their lives and raise their families peacefully may be particularly relevant.
In other developments, 2024 started with the news that a 13-year-old teenager from Oklahoma in the United States is probably the first human being in history to beat the computer video game Tetris, claiming to have reached level 157 and causing the game to crash.
There’s hope for the world yet.
Wishing you all a safe, happy and fantastic 2024 through the power of the global community.
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