A world on the edge

Paul Rogers author pic
Paul Rogers
30 January 2009

The global financial downturn that accelerated throughout 2007-08 for some time seemed to be largely confined to a cluster of western states - the United States, Spain, Japan and Britain among them. Yet the greater extent and severity of the crisis that erupted on "debtonation day", 9 August 2007, is becoming clearer. As late as November 2008, the International Monetary Fund (IMF's) monthly update was forecasting that overall world output would rise by 2.2% in 2009; the leaders were expected to be some of the "tiger" economies, especially China. Now, in late January 2009, that assessment is being downgraded sharply: to 0.5% prospective overall growth, the lowest annual rate since 1945.

Paul Rogers is professor of peace studies at Bradford University, northern England. He has been writing a weekly column on global security on openDemocracy since 26 September 2001

There is a bleak implication here: that emerging economies will for the foreseeable future no longer be able to drive the global financial machine. This in turn dissolves the hope that they would cushion the worst impacts of the recession in wealthy states. The IMF cites a range of evidence - lower commodity prices, worsening export prospects and financial constraints - to forecast that the growth of the emerging and developing economies will shrink from 6.25% to 3.25% in 2009 (see "World Growth Grinds to Virtual Halt, IMF Urges Decisive Global Policy Response", 28 January 2009). 

The impact of this fall will be especially heavy on the approximately 4 billion peole who compose the marginalised majority of the world's people, those who lack security and minimally reliable living-standards. The International Labour Organisation (ILO) warns that there could be 51 million job-losses in 2009. The food-security summit in Madrid on 26-27 January 2009 heard that while food prices had declined in the past few months, they were still 30% higher than in 2005-06 (see Victoria Burnett, "UN chief warns of food shortages in poor countries", International Herald Tribune, 27 January 2009).

The United Nations secretary-general Ban Ki-moon drew attention to a recent rise in malnutrition, which he linked to the wider economic downturn: "With the spreading misery of shrinking economies, communities that were starting to emerge from poverty must wrestle instead with fewer jobs, limited access to credit and restricted market opportunities."

A tale of two trends

It is in this context that members of the global elite are gathering for the annual World Economic Forum summit in Davos, Switzerland, on 28 January - 1 February 2009. The emphasis in most of the discussions - organised around the theme of "shaping the post-crisis world" - reflects the concerns of the rich west in particular, albeit with high-profile contributions from the prime ministers of (for example) Russia and China.

The real issue that the Davos summiteers are unlikely to address is the impact of the recession on a worldwide community in which thirty years of neo-liberal economic policies on a global scale have failed to deliver any measure of true economic justice. There has certainly been growth, most recently in some of the largest Asian economies; but this has been accompanied by the evolution of a transnational elite of well over a billion people that has forged ahead of the rest.   

In addition to his weekly openDemocracy column, Paul Rogers writes an international security monthly briefing for the Oxford Research Group; for details, click here

The extent of the divisions is staggering. A striking example is found in a study of the "household wealth survey" by the Helsinki-based World Institute for Development Economics Research, which shows that the richest 10% of the world's people own 85% of household wealth whereas the poorest 50% own barely 1% (see James Davies, Susanna Sandstrom, Anthony Shorrocks & Edward N Wolff, "The World Distribution of Household Wealth", WIDER Angle, 2/2006 [World Institute for Development Economics Research, Helsinki]).

The fundamental failure of the liberalised world system to counter such divisions has, however, been paralleled by another and far more welcome trend: the impressive growth in education, literacy and communications across the world. This achievement, owed primarily to the efforts of hundreds of millions of people across the global south, means that there are now far more people who have shared in educational progress. At the same time, this very advance carries with it a clearer and more widespread recognition of the realities of their marginalisation (see "A world in flux: crisis to agency", 16 October 2008).

This global phenomenon may be beyond the awareness of most of the world's elite - but huge numbers of people in the majority world have an acute understanding of both how far they have come and how high are the obstacles to thier further progress. The result is no longer what used to be described as "the revolution of rising expectations"; but rather a potential revolution of frustrated expectations. This has already led to revolts from the margins, which are likely to continue.

The recent experiences of China and India is instructive (see "China and India: heartlands of global protest", 7 August 2008). In 2006, for example, the Chinese authorities had to introduce a new group of security forces - 600-strong elite squads in each of thirty-six cities dedicated primarily to social control. They were intended to supplement existing policing systems attempting to cope with a rapid rise in social unrest (see Jane Macartney, "China creates crack units to crush poverty protests", Times, 20 June 2005). 

In India, the neo-Maoist Naxalite rebel movement that originated in West Bengal in 1968 might have been expected to be consigned to an over-full dustbin of history (see Ajai Sahni, "India and its Maoists: failure and success", 20 March 2007). Instead it has been able to expand its influence and engage in sustained combat with official security forces; it is now active in 185 districts, located in seventeen out of India's twenty-eight states. In 2007, the movement was described by India's prime minister, Manmohan Singh, as the "single biggest internal-security challenge facing India" (see P V Ramana, "Red Storm Rising", Jane's Intelligence Review, August 2008).

A further example of the potential revolution of frustrated expectations is the violent reaction to the rapid rise in food prices in 2007-08. This led to numerous riots and other civil disturbances in Mexico, Senegal, Morocco, Mauritania and elsewhere (see Dominique Baillard, "The demand for grain won't stop growing", Le Monde diplomatique, May 2008 [subscription only]).

These developments are only the more visible indicators of a deeper resentment among communities that have far greater access to communications technology (especially television) and are far more aware of the scale of the world's social divisions than ever before (see "A world in the balance", 13 November 2008). In a situation where half of the world's population is now urbanised, many of the divisions are stark and unavoidable; not least the development of heavily-guarded gated communities, some of them akin to medieval walled towns (see "A tale of two towns", 21 June 2007).

The risk of revolt

The key point here is that these alienated and often violent responses have all evolved during a period of overall growth, in which even in the midst of wide social divsions the prospect of economic betterment has remained open. This is where the evolving circumstances, where growth is certain to be greatly curtailed, are so different. In China, where the government's desperate hope of reach an 8% growth target in 2009 is countered by the IMF prediction of only 6.7%, there is great concern at the prospect of substantial increases in social unrest (see Tania Branigan, "China fears riots will spread as boom goes sour", Observer, 25 January 2009).

The risk of revolts from the margins is reflected in the pervasive fear that has begun to affect the new middle classes in major countries of the global south (such as China, India and Brazil), as they see their recent accession to modest wealth threatened by desperate people. In such conditions the likely response is strong support for any government that places a priority on maintaining elite security - even if that requires the use of domestic repression (see Wei Jingsheng, "China's political tunnel", 22 January 2009).

As a counter-reaction, it is probable that this will lead to the rise of new radical social movements variously rooted in aspects of ethnic, religious or political identity. It is not clear where they will emerge, or what their character will be; some may well resemble Peru's Sendero Luminoso or the Naxalites, others may even be transnational. Indeed al-Qaida, from its particular religious and cultural location, may eventually be seen more as a symptom of a globalising trend rather than a defined phenomenon of short duration (see Faisal Devji, "Osama bin Laden's message to the world", 21 December 2005).

Outside the gates

These prospects attract little attention at Davos, but they are being registered and discussed at the World Social Forum (WSF) on 27 January - 1 February 2009 in Belém, Brazil. At the same time, the WSF is itself in a state of flux as various currents in the movement promote a different set of responses based on local action, network advocacy and state agency (see Geoffrey Pleyers, "World Social Forum 2009: a generation's challenge", 28 January 2009). It is plausible to argue that each has a valid role to play, and that individually and in combination they would be of great value in the global economic environment of 2009 and beyond.  

But it is far less likely that any or all of these three approaches will be sufficient to address the consequences of an unfolding world recession. This will require concerted intergovernmental action that emphasises less the domestic economic predicaments of western states and their associates in the emerging economies than the fundamental issue of global marginalisation

The danger lies in the spread of a "close-the-castle-gates" mentality that will be self-defeating in the face of justified anger from the overwhelming global majority stranded outside the gates. To avoid it, there is a need for voices that can persuasively challenge the limited and orthodox vision that dominates at Davos. If prophecy is best defined as "suggesting the possible", then this really must become an age of prophets.

Had enough of ‘alternative facts’? openDemocracy is different Join the conversation: get our weekly email


We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData