x Abu Dhabi, UAEFriday 21 July 2017

2014: a year of surprises?

The future is never certain, but there is one thing we can be sure of: the year ahead will see changes a-plenty. The Review’s team of analysts and expert commentators make their predictions for key economies and major trouble spots

A souvenir displays an image of Chinese leader Xi Jinping, left, and Mao Zedong. Feng Li / Getty Images
A souvenir displays an image of Chinese leader Xi Jinping, left, and Mao Zedong. Feng Li / Getty Images

Syria

Who would have thought three years ago that Syrians would become the boat people of the early 21st century, that every city but two would be destroyed and that the country’s ruins would be fought over by opposing foreign militias? So predictions are a fool’s game, but two key questions can be posed for 2014.

First, will the US-Iran detente, as some optimists predict, open a window of hope? Specifically, will Iran pull out the military advisers directing the Assad regime’s fightback, will it recall Hizbollah and other clients serving on the front lines and will it cut its financial lifeline to Assad? Sadly, it seems improbable that the West will pressure Iran over Syria. More likely, the deal includes a silent recognition that Syria lies in Iran’s sphere of influence. America’s precipitous but surely temporary withdrawal from the region (temporary because the crises it’s causing will eventually drag it back) became most apparent after the August 2013 sarin gas attack, when the United States, in effect, handed the Syria file to Russia.

The second question is whether or not the new Islamic Front, unifying Islamist militias, will be able to break the military stalemate with the regime while sidelining the Islamic State of Iraq and the Levant (Isil). The Isil is focusing on building emirates in northern Syria, controlling the weapons and other trade crossing the Turkish border, and engaging in a repression of the population different in complexion but similar in degree to that of the regime. So far, the opposition militias have tried not to open a new front against foreign jihadists, but that may now become necessary. And the Isil’s growth teaches an important lesson – state-building is essential now, even under the most terrible conditions. It’s a grim prognosis: conditions will become still worse before they improve.

Robin Yassin-Kassab is a British-Syrian novelist and political commentator.

Germany

Like it or not – and I don’t – Germany is no longer just the ”paymaster“ of the European Union. The euro crisis (and France’s demise) has catapulted Berlin to undisputed leader of the 28-member EU bloc. Today, Germany is its paymaster, driver, architect – and frontman now, too. This means that Germany’s word on the euro crisis and Euro zone reform is paramount.

There are two things to watch for as the new centrist coalition takes office in 2014. The first is whether Chancellor Angela Merkel will finally relent and relax the hard-nosed austerity policies that Berlin has demanded of the southern Europeans. Just about all knowledgeable observers recommend this – and her new coalition partners, the Social Democrats, could push for it within the ­administration.

The second is the bigger, long-term question: are there signs as to whether the common currency itself is tenable in the long run? This question divides economists – and the truth is that no one knows for sure. Can crisis-hit countries such as Greece and Spain get back on their feet? When will Germany and the other wealthy nations be able to stop paying, if ever? Will the Euro-sceptic, anti-Islam right make big gains in the European Parliament elections in the spring? The Europe questions are high stakes and completely up for grabs.

The other game-changer is energy policy. Germany had taken the lead in Europe by forging ahead in introducing renewables into its power supply. In just over a decade, Germany turned a quarter of its electricity supply green. This has enormous implications for Germany and beyond, as the world is watching Germany’s great energy experiment.

But Merkel has turned from enthusiastic to very cautious about the so-called Energiewende (clean-energy shift). If she backs off now, she’ll give the critics and the fossil-fuels lobby more ammunition to damn a project that threatens their very existence. It will be telling how this fight shapes up and whether the energy progressives can regain the upper hand.

Paul Hockenos is a regular contributor to The National.

India

After a decade of political and economic stability, India enters the new year amid deep anxiety about the future, with crystal-ball-gazers predicting a period of quite radical change and uncertainty ahead. If they’re proved right, India’s political landscape is likely to transform dramatically in 2014, with a big shift in domestic agenda and foreign policy. All eyes are on the general elections in May.

According to pollsters, the left-of-centre ruling coalition, the United Progressive Alliance (UPA), led by the Congress, is set to be voted out of power and replaced by a new alliance headed by the right-wing Bharatiya Janata Party (BJP).

After being in power for 10 years, winning two consecutive terms, the UPA faces an anti-incumbency factor compounded by a record of poor governance and corruption in the second term. People, especially the youth, are said to be impatient for a change.

In what’s described as a rehearsal for the May polls, the Congress suffered a heavy defeat in a string of crucial state elections, including Delhi, held earlier this month. India’s more than 170 million Muslims are on tenterhooks at the prospect of the Hindu nationalist BJP coming to power with Narendra Modi, currently the chief minister of Gujarat, as prime minister. A deeply divisive figure, he has been accused of abetting the 2002 anti-Muslim violence in his state.

The peace process with Pakistan might suffer. The BJP is opposed to a dialogue with Islamabad unless it punishes the perpetrators of the 2008 Mumbai bombing. Generally, India’s foreign policy could become more gung-ho, marked by closer relations with Israel. At home, public spending may be heavily reduced with cuts to several big-ticket, pro-poor schemes. There are also fears for cultural freedoms in 2014, with India likely to become a more intolerant society under a right-wing government.

Hasan Suroor is a London-based Indian journalist.

Turkey

The set-piece political event of 2014 will be countrywide municipal elections in March. Most crucial is the race for Istanbul city hall – already billed as a bellwether of Turkey’s political future. The opinion industry has pronounced that defeat in Istanbul alone could sink the Justice and Development Party (AKP) government of prime minister Recep Tayyip Erdogan.

Whether a prospect to fear, relish, or regard as exaggeration, losing Istanbul would strain the internal bonds of the AKP juggernaut. The most successful party in Turkish history, the AKP has been fraying under Erdogan’s one-man rule. A former mayor of Istanbul and undisputed master of Turkish politics, losing Istanbul would confirm Erdogan’s liabilities.

The Istanbul municipal election of March 2014 will close the chapter of Turkish history opened in May 2013 when police violently put down a small protest in Istanbul and sparked a general cross-country anti-government protest that lasted weeks, leaving several dead, thousands injured, the government shocked and society electrified. Throughout, Erdogan provoked and polarised – to the dismay of many of his supporters and colleagues.

Since the protests fragmented into dissipated grassroots activism along with counter-demonstrations, arrests, trials, and other indirect punishments from authorities, many are looking to the Istanbul vote to consolidate the opposition and deliver some sort of verdict. Then the next chapter opens: either a diminished or vindicated Erdogan will contest Turkey’s first direct presidential elections in August.

Meanwhile, the fragile economy, the Syrian civil war, the faltering peace plan with the Kurdistan Workers’ Party (PKK), political trials, and conflict between the government and a major religious movement interplay like reverberations along a spider’s web. The 2013 storyline seemed likely: peace with the PKK and a new constitution would facilitate Erdogan’s creation of an executive presidency. None of it happened. What’s foreseen for 2014 will no doubt also meet the unexpected.

Caleb Lauer is a regular contributor to The National.

United States

The coming year will mark the start of very real changes to the American healthcare system, courtesy of the Affordable Care Act. Republicans in Congress will likely harp on about expired policies and website snafus, but the real story will be elsewhere, in the millions of Americans now eligible for affordable health care that neither bankrupts the sick nor evaporates on first contact with illness.

The bruising and endless battles over “Obamacare” will no doubt colour the coming midterm elections, in which Democrats in unprotected districts will likely have to defend President Barack Obama’s signature legislation in the face of artfully corralled misinformation and the all-too-real flaws of ­HealthCare.gov. Republicans will also occupy themselves fighting over the future of conservatism. Should the party move to the centre to attract Hispanic voters or is the wiser electoral formula a dedicated defence of conservative ideology? The long-term favours the former, but headwinds, and the narrow base of Republican primary voters, favour the latter.

The long-term consequences of climate change will continue to go untended, victim of congressional gridlock and the increasing difficulty of conducting complex conversations in Washington not driven by hyper-partisanship. Hurricanes and tornadoes will continue not to discriminate, and politicians will continue to pass the buck, sure that kicking the can will avoid the problem for another day.

As Washington burns, America will continue silently changing, to a country more Hispanic, more urban and less white than ever before. Meanwhile, as the economy slowly sputters to partial life, the tech industry will continue to produce eye-popping IPOs and sales prices. US$3 billion for Snapchat? Not enough. Does anyone doubt that this bubble, too, shall soon burst?

While politicians and health-care execs and tech moguls pull the levers of the country – or fail to – the rest of us will likely settle onto our couches and watch Scandal on Netflix. At least we can always count on television.

Saul Austerlitz is a regular contributor to The National.

South Africa

Next year will mark the 20th anniversary of the end of apartheid. In 1994 the ANC positioned itself as a party of transformation and the only legitimate custodian of majority rule. Yet after two unbroken decades in power and the death of its spiritual leader, it is the ANC itself that has transformed – from a progressive force into one fiercely that protects the status quo.

Over the past 20 years, the country seems to have developed an uncanny knack for self-sabotage. The aspirations that accompanied black emancipation have been crushed by levels of crime, youth unemployment and inequality that have become among the highest in the world. After Nelson Mandela’s retirement, the hope that greeted the peaceful transfer of power to Thabo Mbeki in 1998 soured after his Aids denialism. The goodwill followed Oscar Pistorius’s international paralympic triumphs was lost a result of his upcoming March 2014 trial for the murder of his girlfriend Reeva Steenkamp.

Most recently, international sympathy was extended to South Africa after Mandela’s death, but the world’s attention quickly shifted to revelations that a phoney sign-language interpreter had been allowed to stand within arm’s reach of dozens of world leaders despite his history of violence and a lengthy criminal record. The scandal served as a potent metaphor for the government’s humiliating descent into incompetence and unaccountability.

With the 2014 general election on the horizon, the ANC has come under attack by two newcomers on its home turf. With the Economic Freedom Fighters party headed by renegade former ANC Youth League firebrand Julius Malema targeting disillusioned township youths and Mamphela Ramphele’s Agang SA chipping away at the rising black middle-class vote, the ANC is finding itself squeezed from both sides.

However, what the party lacks in policies it more than makes up for in numerical superiority and unabashed identity politics. After President Jacob Zuma was openly booed by crowds during his appearance at Mandela’s memorial, his party wasted no time or scruples in trying to turn the occasion to its advantage. While the body of South Africa’s visionary leader still lay in state, activists from the party he led to victory a decade ago were already handing out posters commanding mourners to “Do it for Mandela” and vote ANC in 2014.

Vadim Nikitin is a regular contributor to The ­National.

Afghanistan

It’s an inauspicious start to Afghanistan’s post-Nato history that it is still unclear whether there will be a security agreement with the United States, allowing for a US troop presence beyond next year when Nato’s war is scheduled to end. An agreement has been negotiated but in a typical act of brinkmanship, the Afghan President, Hamid Karzai, has refused to sign it.

Although the agreement will probably be signed eventually, this prevaicration is already effecting the economy. Yet Afghanistan is so dependent on the aid and stability the West provides that the drawdown will probably lead to some deflation no matter what. Its thin middle class is under threat. Political instability will add to the woes: with term-limited Karzai soon out of the picture, it is not clear who will take over next year. Creeping Islamisation is one thing to watch out for: conservatives are pushing for changes that could undo many achievements in the status of Afghan women. The rise of powerful provincial leaders – soon unchecked by America’s might – may be another.

Fearful of the future, many wealthy Afghans are leaving. And in many ways, Nato’s post-2009 military “surge” hasn’t been a stunning success: the Taliban is far from defeated and the Afghan state, whose rebuilding was Nato’s central aim, barely exists beyond the cities. The only institution that just about works is the army. Next year, America will still be around in a supporting role but in the final analysis, it is now the Afghan army that will determine the country’s future. It is better placed to succeed than many give it credit for. Though it may have to abandon some districts, its collapse is highly unlikely, at least as long as it continues to receive help from Nato. Next year will be a hard one for Afghanistan but don’t bet on chaos.

Balint Szlanko is a regular contributor to The ­National.

China

The late Nelson Mandela managed to do something remarkable in China simply by dying: unify the Communist Party of China and its most bitter adversaries in praise.

Of course, apparatchiks and dissidents praised different things. While Chinese state media reflected on Mandela’s admiration for Mao Zedong, those jailed for protesting against that state recalled how he inspired them to endure their prison sentences.

And some made a different point: what China needs is not a Mandela, but an FW de Klerk – someone who realises that the game is up and that the time for real change is now.

The same fond hopes attended the accession of Xi Jinping to China’s presidency last year. As a scion of the liberal wing of China’s red aristocracy and the son of the man who set up the Shenzhen Special Economic Zone, the ground zero of reform in China, it seemed at least plausible that there would be a loosening of both political and economic control.

Instead, Xi revealed a formerly unsuspected zeal for the old-time religion. For party members and officials it’s been a year of constant “rectification”, “self-criticism” and “democratic life meetings”. They are being incessantly nagged into frugality and exhorted to abandon “formalism” along with other deadly sins in the Leninist canon. And the much feared discipline inspectors, the party’s internal security force, are constantly on the prowl looking for – what else? – indiscipline

And while the reforms announced at the Party’s 3rd Plenum will promote a modest range of social and economic freedoms if they are followed through, But taken cumulatively they also reduce the autonomy of the party at a local level and channel more decision-making power to the centre. As such, they fit in quite neatly with the Leninist precept of Democratic Centralism.

Since the collapse of the Soviet bloc, observers have found it difficult to take Chinese communism seriously on its own terms. Without communist economics, the practices and structures of communism tend to be taken as legacy rituals designed to keep the existing ruling class together and in charge. To some extent, this is surely true. But any communist – and China has 85 million of them – will tell you that politics comes before economics as the most important form of collective human endeavour. Perhaps it’s time to take them seriously and accept that in Xi Jinping China has found itself politically with the most orthodox communist leader since the late Erich Honecker of East Germany.

Jamie Kenny is a reguylar contributor to The National

Pakistan

In Pakistan’s last general elections, foremost on voters’ minds were the cost of living and the worsening energy crisis. The country is headed into 2014 with double-digit inflation, higher taxes and energy costs surpassing all except Japan in Asia. Hopes had been pinned on the new prime minister, Nawaz Sharif, a consummate businessman, to deliver Pakistan from its economic woes. Sharif, however, has been busier consolidating his power. Expectations of radical reform remain hitherto unsatisfied.

At close to one per cent, Pakistan has one of the lowest tax-collection rates in the world. But Sharif is unlikely to discomfit members of his own class to meet the deficit. His tax reforms so far have been regressive, burdening the poor. Sharif’s answer to all economic questions is more privatisation. But it’s the energy crisis that presents a bigger challenge. The large imports of expensive oil from the Gulf deplete Pakistan’s foreign-exchange reserves, spiralling inflation. Successive governments have failed to exploit opportunities for investment in small renewable-energy projects.

The most significant event to affect Pakistan in 2014 will be the US-Nato drawdown in Afghanistan. Sharif intends to use the occasion to launch a political process to defuse the insurgency in the Federally Administered Tribal Areas. Western withdrawal is likely to deplete the reservoir of sympathy for the Taliban; and with the drone war abating, there’s an opportunity to isolate the insurgents and restore the state’s writ. However, the sectarian flames that the war has kindled will likely smoulder for years. Minorities are more vulnerable today than they have ever been. It will take courageous leadership to reassert and protect minority rights.

Another major development to watch will be the 2014 general election in India. Sharif’s initial overtures toward detente met a lukewarm reception. No Indian politician is likely to appear “soft” on Pakistan in an election year. But after the elections, this dynamic will likely change. Both countries have much to gain from it.

Pakistan has changed much since Sharif’s first stint in the 1990s. It now has a vibrant civil society, a strong opposition movement and a rambunctious media. Expectations are higher; there is accountability. A blow was already struck against the old system of rule by kinship and patronage when Imran Khan’s PTI unseated the regressive and corrupt ANP in the Khyber Pakhtunkhwa province. Old political monopolies are eroding. Pakistan always had a resilient society; now it also has an informed and empowered one. One can doom-monger only at one’s own peril. This force always manages to frustrate bleak predictions.

Muhammad Idrees Ahmad is a regular contributor to The National.

Iran

Next year could prove to be a pivotal one for Iran, both internally and in its relations with the outside world.

While the interim nuclear agreement between Tehran and global powers was groundbreaking, the United States and Iran appear to have a fundamental mismatch in expectations regarding a comprehensive deal: Washington expects Tehran to make great nuclear compromises, while Tehran expects Washington to lift all sanctions.

In lieu of a final deal, it’s plausible another interim deal could be reached which keeps diplomacy alive and conflict at bay at least until 2015.

It also remains to be seen whether a nuclear detente with Tehran will foster greater US-Iran cooperation on regional issues.

As of yet, there are few tangible signs that Tehran is preparing to modify longstanding revolutionary principles such as resistance against America and the rejection of Israel’s existence.

In this context, it’s unlikely we will see a fundamental shift in Iranian policies that are problematic to both regional countries and the United States, such as support for Hizbollah or the Assad regime in Syria.

An important but neglected development in Iran internally is the seeming re-emergence of the country’s civil society and middle classes, which have been resuscitated by Hassan Rouhani’s election and are putting grassroots pressure on the government to respect civil liberties at home and carry out rapprochement with the outside world.

Given that very powerful factions in Iran have much to lose in the context of such an opening, it will be key to see whether supreme leader Ayatollah Khamenei ultimately throws his weight behind pragmatists who favour detente, or hardliners who feel threatened by change.

Karim Sadjadpour is a senior associate at the Carnegie Endowment for International Peace.

Russia

In 2014, as in 2013, Russia’s internal and foreign policies are likely to remain closely interconnected. Opposition to western “universalism” will remain a matter of hard politics as well as principle. In its own neighbourhood, Russia will do its utmost to block EU enlargement, de jure or de facto. Globally, it will continue to insist on its “right to be consulted” on all questions of importance.

The New Year will put these policies to the test in two respects. First, Russian economic stagnation and the revolution in global energy markets has pronounced implications for its national power. Its “neo-feudal” system is an increasing source of discontent at home and of declining attractiveness abroad.

Second, its geopolitical calculations have been thrown into limbo by Ukraine’s protests, putting at risk its entire “sphere of privileged interests”. Without Ukraine, the Kremlin’s attempt to construct a “distinctive” civilisational project based on Slavic and Orthodox values falls to the ground.

But in much of the wider world, especially the Middle East, Russia’s policy will remain sure-footed and confident. In Syria, it considerably advanced its core interests in 2013: the prevention of regime change by external means and the preservation of Assad’s regime in whole or part. It has used US partnership as a means of diminishing western influence and is now trading on its success to facilitate Iran’s reintegration into the regional and global system. By linking Iranian and Israeli nuclear disarmament, it has enhanced its importance to both countries.

Yet these gains are overshadowed by China’s commanding position in East Asia and potentially Eurasia. Russia’s “equal strategic partnership” is becoming less equal for Russia and less strategic for China.

Russia’s economic decline is likely to become political decline in 2014.

Whether the theatre of action is Syria or Ukraine, the connecting thread of Russian foreign policy will remain the creation of an external environment conducive to the maintenance of the system of governance at home.

James Sherr is an associate fellow at Chatham House.