PREDICTIONS FOR GLOBAL POLITICS and ECONOMICS in 2017

DINESH GOPALAN

Advisory Board Member, ISME

2016 was a bizarre year in more ways than one. Trump’s ride to
Presidency on the back of open racism, xenophobia, misogyny and a resume that
boasts pussy grabbing and tax evasion, was just one of them. BREXIT was the
other. The wars in Syria, Yemen, Libya, ISIS in Iraq, waves of terrorism across
Europe brought up the rest of the draconian and gory highlights of 2016.

The rise of ultra right wing politicians across the planet – be
it Modi in India, Farage in Britain, Trump in America, Nethanyahu in Israel,
Putin in Russia and others, is the cornerstone on which the world is turning
towards demagogues, extremist politics and needless sabre rattling. None of
them useful in creating a just and equitable world.

The emergence of modern internet technologies have enabled
virtually real-time dissemination of news and with that the widespread use of
social media with its many pros as well as cons.

In 2017, many of the things that emerged in 2016 will
accelerate. The world will be less safe due to the rise of extremist demagogues
in politics accompanied by the scourge of terrorism. If you live in a peaceful
corner of the world, away from all the mess created by globalization and the
attendant xenophobia, you are a lucky person.

Peter Osborne of the Daily Mail has articulated these as the key
developments that may happen in 2017. It will be interesting to see how many of
them will come true:

The Turkish government — urged on by its new ally, Vladimir
Putin — decides to allow hundreds of thousands of Syrian and other
asylum-seekers through its land to EU countries.

This follows the collapse of a deal between Germany and Turkey
to limit the number of refugees in return for Turkish citizens being granted
visa-free travel to the EU’s Schengen (open borders) Area.

The move is seen by many as revenge on Brussels for the
humiliating rejection of Turkey’s application to join the EU. Inevitably, the
new influx of migrants will give a huge boost to Right-wing nationalist parties
as they head into elections in France, Holland and Germany.

In May, the French will elect the most extremist president since
the Fifth Republic was created in 1958.

A victorious Marine Le Pen of the Right-wing Front National will
swiftly pledge to take France out of the euro, thus shattering the political
and financial system that has evolved to create stability in Europe since the
end of World War II.

For their part, stunned EU leaders will blithely proceed with
plans for closer European union.

In effect, this model will be an increasingly German-dominated
body looking mostly to embrace former Communist countries in the East such as
Poland and Hungary.

As she promised, Mrs May will trigger Article 50 to take Britain
out of the EU by the end of March — but then call a snap General Election in
May to give her strengthened authority to play hardball with Brussels over the
UK’s future relationship with the EU.

This will prove to be a masterstroke. Exploiting Labour’s
weaknesses, the Tories win more than 400 seats and secure a larger majority
than Margaret Thatcher ever achieved. Jeremy Corbyn steps down after Labour
gets fewer than 200 MPs. There’s a minor Lib Dem resurgence, having fought on a
pro-EU platform.

At the eighth attempt, Nigel Farage is elected as an MP.

4. PRESIDENT TRUMP’S LOVE-IN WITH PUTIN

Ignoring Obama expelling 35 Russian spies, Trump, vows to strike
a so-called ‘buddy deal’ with Russia.

However, aghast, Washington’s Cold War era-educated hawks are
determined to stop him. The most significant of these are in the Central
Intelligence Agency (CIA) which is institutionally wired towards confrontation
with Russia.

The CIA views Trump as an irrational man who has been suborned
by Russian security interests. During the ensuing confrontation between the
White House and the CIA, Trump orders his National Security Adviser to sack
senior intelligence officers. For their part, in London, MI6 chiefs fear for
the future safety of Europe.

Decades of repression, overspending and corruption will finally
come back to haunt the Saudi royal family. There will be a palace coup against
the country’s effective ruler Prince Salman and the regime he has led with his
infamous ‘iron fist’.

Paying the price for meddling in both the Syrian and the Yemeni
civil wars, he is likely to be replaced by former security chief Mohammed bin
Naif, who has long-standing links with Washington.

Mugabe toppled in Zimbabwe

For years in bad health, the 92-year-old despot is finally
ousted. With the economy still in freefall and despite his supporters saying
he’ll ‘rule for eternity’, Mugabe is forced out because his government no
longer has enough funds to pay civil servants, the police and — most crucially
— the army.

Tragically, his successor, Emmerson Mnangagwa, is best-known as
the bloodstained architect of the genocide in Matabeleland in western Zimbabwe
which claimed 20,000 lives in the Eighties.

As Trump tries to honor his campaign promise of retaliation for
the Beijing government ‘raping’ America, he slaps tariffs on Chinese imports.
In response, China liquidates U.S. Treasury bonds it has bought — pushing U.S.
interest rates higher and tilting both countries’ economies towards recession.
Meanwhile, the possibility of Chinese/U.S. military confrontation in the South
China Sea grows.

The world will pay the price for years of indebtedness and
overspending. According to International Monetary Fund figures, world
indebtedness stands at $152 (£122) trillion. That’s well over twice global
output.

Much of that debt — such as loans extended to embattled eurozone
countries Greece and Italy — will never be repaid.

The crisis in confidence will start with a crash in the bond
markets, setting off a surge in interest rates and quickly lead to a series of
bank failures across the world. This financial crisis will be more difficult to
solve than the 2008 crash because national governmental finances will no longer
be strong enough to come to the rescue as they did eight years ago.

This financial crisis will be a turning point for the EU’s
flawed currency system. Greece will be forced to return to the drachma —
triggering a chain reaction which will quickly see Italy, Cyprus, Spain and
other southern European countries follow suit and abandon the euro.

Greece, Italy (by now back to using its old currency, the lira)
and others will declare national bankruptcy and refuse to pay their debts.

Small savers and depositors across Europe will see their
investments wiped out, setting off riots. Paralysed by such chaos, the European
Central Bank will fail as member states will refuse to fund its losses.

Watch out for an acrimonious battle over who owns the European
Central Bank’s billions of worthless debt. In the short term, this will set off
a round of crashing stockmarkets and economic depression.

However, there is an up-side. Freed from the straitjacket of the
euro, many European countries will bounce back to economic health.

A new order takes shape as the long-established hegemony of
America in the region ends — the result of Trump taking the U.S. along a path
of international isolation.

Russia, led by Vladimir Putin, right, will be joined by Iran and
Turkey as the dominant powers in the Middle East, creating a new security
umbrella and making threats to Saudi Arabia, to a string of smaller Gulf states
such as Bahrain as well as traditional allies such as Jordan.

Islamic State will be heavily defeated in Syria, Iraq and South
Asia. Meanwhile, the Pakistani army will drive the Taliban further out of the
tribal areas of the country. Christians will be allowed to return to the Syrian
city of Aleppo and other areas previously held by extremist Muslim groups. In
Iraq, too, Christians may make a wary return to areas vacated by ISIS.