What started with the Arab Spring in Tunisia quickly spread throughout the region, first into Egypt and then Libya before taking effect in Syria, Yemen and Bahrain.
Spring into summer
During an Indignant Summer, there were riots in the UK. Occupy Wall Street – that started in Spain – spread to St Paul’s in London and throughout Europe; it was in all the major cities in South Africa; its reach was everywhere between Sydney and Quebec.
Time magazine named its Person of the Year as ‘The Protester’.
What we saw was the economic problems of 2011 being met by political and social activists on a huge scale – the protests globally were in countries with a combined population of three billion.
Unfortunately, when government and decision-making was left in the hands of politicians, nothing happened, and this is one theme that we are going to have to contend with more of in 2012.
The Republicans and Democrats in the States took forever and a day to even agree to disagree on any plan to lower its national debt and Standard & Poor’s did the right thing by downgrading its long-term debt to AA+ from AAA.
Despite the arrogant “How very dare you?” grandstanding from many, the decision was proved right when the Joint Select ‘Super Committee’ set up in August to get round this political stalemate had to conclude that “it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline [of 23 November]”.
A lonely winter
Closer to home, the European Union exists in its current form thanks to the signatures of 27 countries so it is 27 countries that need to agree for any changes to be made – unlikely. As we go into 2012, these 27 countries can be split in two – the UK and 26 others.
Without quite such drastic action as Mohamed Bouazizi (the Tunisian street vendor who set himself on fire “for dignity”, as his mother proudly explains), Prime Minister David Cameron made a stand against what he sees as something that is not in the UK’s interests. The vast majority of Europe wants the Lisbon Treaty to be rewritten allowing greater fiscal integration between the member states. Cameron refused to sign until certain safeguards for the UK financial services industry are in place.
Any further negotiations aren’t even “ongoing” so we will likely start next year outcast politically from the rest of Europe.
We can add to this ongoing uncertainty in the US as Obama enters election year; a number of new democratic governments in the Middle East and North Africa; South Korea putting its military on alert as North Korea starts its rule under Kim Jong-un, son and successor to Kim Jong-il who died yesterday; and Russian protests against having to see yet more of Vladimir Putin as Russian President.
On a positive note, some of these political issues will have been resolved during – hopefully! – the first half of 2012 so investors will have a degree more certainty to work in as the year progresses. As 2011 showed, if only we could take the politicians out of the equation then change will happen even quicker…
