4 March 2021

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CURRENCY

HOPES NEVER DIE

Disappointing predictions for 2021 still give some hopes

Author:

15.01.2021

The past year has already been called the worst in modern history. Now all eyes are on 2021, albeit with no special signs of improvement that might be counted on this year. On the contrary, many negative events and tendencies of 2020 will continue to get worse with new ones yet to appear. At least COVID-19, which has become a classic ‘black swan’ that turned absolutely everything upside down, including from personal plans to international agenda, is not going to disappear overnight. On the contrary, the cases continue to multiply and the virus – to mutate. At the same time, most of the so-called Western civilized world is increasingly going online and watching what is happening through the prism of fake news and increasing censorship on social networks.

 

Virus of crisis

The consequences of the COVID-19 pandemic turned out to be so strong that in the coming years the world will definitely not become the same. Amid the ‘war of vaccines’, we can expect ever-growing negative trends in the world economy. It is predicted that most of the world will not return to GDP levels of 2020, even by the end of 2021. Global debt levels due to spendings to counter the pandemic continue to rise, especially in developing countries. For the first time in 50 years, the middle class began to shrink towards poverty.

The World Bank predicts that an additional 150 million people will experience extreme poverty by the end of 2021. This would include people living on less than $1.90 a day. In addition, the UN warns that the world is on the brink of the worst food crisis in fifty years. More people will die from malnutrition and related diseases than from the coronavirus. The population of Yemen, Venezuela, Afghanistan, Haiti, as well as a number of African countries is in a particularly vulnerable position. Of course, this automatically increases the risk of social and political upheaval.

If natural disasters and climate change (like last year's terrible fires in Australia and California or locust plagues in Asia and Africa) join the ongoing consequences of the coronavirus, then the prospects seem the most dire. Perhaps, in the near future, local wars for access to drinking water or the establishment of armed local self-defense units to rescue them from crowds of climate migrants will become quite common news.

 

End of the American Dream?

By the way, the new US administration is going to make the problem of climate change one of its main priorities. For some, this arouses optimism and hope, while for others – wariness. After all, the inability to cope with climate change may raise the question of external intervention in the country. As, for example, it is stipulated in international law in case of serious and massive violations of human rights.

We know that the US loves to resort to such methods, but it is important that it does not face such external ‘support’ itself. The new year started with world media reports on attempts by Trump supporters to take over the Capitol. It did not work, and Congress confirmed the electoral decision in favour of Biden. Whether it was a failed attempt of an American-style colour revolution, or really a revolt of the QAnon conspiracy theorists against the so-called deep state, is arguable. Perhaps the main outcome of the 2020 presidential elections in the US is obvious – it has become a split country. Certainly, not because of Trump's supporters and opponents, as everything is much more serious. Differences are based on race and ethnicity, ideological reasons, and most importantly, many of them are purely social in nature.

The US will not disappear on the world map, as some already predict, but it obviously will not be the same. The traditional America from cosy Christmas movies like Home Alone is a thing of the past, as is the famous American Dream. Because too many people are left overboard, without a single chance to fight for the dream.

Yet, despite the Democrats' statements, the sum of Trump’s deeds during his term (if not for the insidious COVID-19), is not that bad at all. He has managed to change a lot with his reforms. Now the Biden and Kamala Harris duo, with the latter having been known as one of the most significant vice presidents in the country's history, will have to take this into account during their terms as new president and vice president.

By the way, nothing is clear about the further political fate of Trump, who may try to return in four years with his own party. At least he still has chances.

The Trump administration has left another important mark on the US foreign policy, which will make itself felt in the coming year. Its allies no longer have the former confidence that America will not turn 360 degrees tomorrow. Previously, the change of Democrats and Republicans in power mainly influenced domestic American affairs, including health insurance, abortion, taxes, etc., but in foreign policy everything was more or less stable. Trump has destroyed this stability with implications in 2021 as well. But perhaps Biden will restore the US presence in those international organizations and treaties that did not please Trump, and will forge relations with NATO partners.

In this context, another important country is Turkey, which Washington imposed partial sanctions on for the purchase of Russian S-400 systems at the end of last year.

The tensions between the US and China and Russia that existed under Trump are likely to persist and even worsen. Taiwan may be the place where the interests of the US and China converge, so much so that the trade war may well develop into a real one.

 

Conflicts around Russia?

As for Russia, many experts claim that the West has been deliberately setting up conflicts along the Russian borders. In 2021, special attention is paid to conflicts in Ukraine, as well as in Moldova. In the latter, the pro-Western newly elected president of the country, Maia Sandu, has already made statements about the withdrawal of Russian peacekeepers from Transnistria and the reduction of the status of the Russian language. The political crisis in Belarus is considered in the same vein, which, obviously, should become more tangible in 2021.

It is interesting that a number of experts see the highest potential for conflict between Russia and Turkey (which is allegedly backed by the West, in particular Great Britain). However, both Erdogan and Putin are constantly making peaceful public statements about each other. Moreover, at the end of the year, Moscow and Ankara showed an example of pragmatic interaction during the second Karabakh war, which ended with Azerbaijan liberating its territories from the Armenian occupation.

Last summer, despite the pandemic, Russia held a vote to extend the presidential powers by changing the constitution of the country. By the end of 2020, restrictions on the Internet increased and holding political protests became more difficult. Apparently, Moscow is trying hard to prevent itself from the perspective deepening of confrontation with the West and is preparing for the upcoming elections to the State Duma scheduled for in September.

The Kremlin will have a forced dialogue with the White House on START III, which expires in early February. Biden also confirmed his intention to extend the START III Treaty.

 

West and Middle East

One of the key topics for the EU will be relations with the UK to make the final accords over Brexit. Also, Europe will see the elections in Germany, in which the incumbent chancellor Angela Merkel will not take part. Her 15-year era is coming to an end. Among the possible successors to Merkel the experts name business lobbyist Friedrich Merz, Prime Minister of the federal state of North Rhine-Westphalia Armin Laschet, Prime Minister of Bavaria Markus Söder and the German Minister of Health and a member of the Christian Democratic Union (CDU) Jens Spahn.

In the Middle East, Iran will continue to be one of the key actors. We still remember that the past year began with the shocking assassination of an Iranian general, the head of the Islamic Revolutionary Guard Corps and one of the most influential people in the Middle East, Qasem Soleimani. At the end of the year, the assassination of a leading Iranian nuclear scientist, attributed to Israel, further exacerbated the situation, forcing Iran to threaten the West with expanding its nuclear program.

So far, Tehran has not gone further than these threats. Indeed, amid the contradictions in domestic politics and a difficult economic situation due to sanctions, aggravation of relations, which threatens to develop into a full-fledged military conflict, the Islamic Republic cannot afford it. Many expect Biden to revert to the 2015 Trump-torn nuclear deal, or rather initiate a new deal. Moreover, all this should correlate with the presidential elections in Iran scheduled for June. It is expected that a public figure from among the conservatives of the country will become the winner of elections.

It cannot be ruled out that the contradictions between Iran and the West (and Israel) will nevertheless lead to a large-scale confrontation. Iran's opponents suspect it of building the so-called Shiite Crescent with access to the Mediterranean Sea, which is an unprofitable move for too many countries.

Another important event in the Middle East should be the next presidential elections in Syria, which may take place in the summer. The current head of the country, Bashar al-Assad, has not yet decided on his possible participation. And it is unclear how legitimate any elected president will be, since Damascus does not control a significant part of the country.

It will also be interesting to observe the development of the US relationship with Israel, which flourished under Trump, as well as the outcome of the Israeli initiative on reconciliation with the Arab states of the UAE and Bahrain. The development of relations between Qatar and Saudi Arabia is also important.

Meanwhile, many African countries and Afghanistan remain among the most likely candidates for increased violence and wars in 2021. May 2021 is the deadline set for the complete withdrawal of the US and NATO troops from Afghanistan. Among the candidates are also Iraq, Syria and Libya. North Korea, as well as the conflicts in the China-India-Pakistan triangle, can quite loudly remind of themselves this year as well.

 

Hope for peace and prosperity

Certainly, Azerbaijan is more interested in the situation in the South Caucasus, which has been traditionally a sphere of interests for various international players. Baku's victory in the Patriotic War brought hopes for peace and stability in this difficult region. Azerbaijan immediately got down to business, drawing up plans for the development of the territories liberated from the occupation and the restoration of all state structures. One of the most important positive factors for the economy will be the unblocking of communications, which are strategically important from a geopolitical point of view for a number of international players, even those far from the South Caucasus.

It is hoped that no external interference will affect this process, and it will deepen further on the ground this year.

We can definitely say that this is one of the few positive factors of this year, when almost everything points to political, economic and military risks in the next twelve months. After all, the worst year in modern history for all mankind simultaneously brought Azerbaijan the long-awaited victory and changes that the citizens of the country have been waiting for several decades. This suggests that it is possible not only to withstand even a stormy sea of dangerous changes. It is quite possible even to significantly strengthen our positions if we act together and according to the plan, have friends and are able to show firmness and will, which was demonstrated by the entire Azerbaijani people. Therefore, despite the overall negative tone of the forecast for 2021, we are still hopeful.



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