The world will feel the impact of four international issues in the coming year:
Oil. The current price war, caused mostly by the Saudi Arabian king’s drive for market share from rising non-traditional producers, has roughly halved the international price of oil from early 2014. Low oil prices will benefit most Canadians, providing vehicle owners and manufacturers with the equivalent of a sizeable tax cut. Our oil and gas sectors, including the oil sands, will suffer in the short run, but some in the industry think both oil and gas do best when international prices are ‘reasonable but stable’.
Consequences of the oil/gas glut and collapsed prices are already emerging. Ironically, while the U.S. hydrocarbon-fracking sector is a major Saudi target, the U.S. is clearly the biggest national winner. The three per cent real U.S. economic growth expected in 2015 should help Canadian exporters significantly. Africa, the Americas, Asia, and most of Europe will also benefit from low prices. With cheap oil, it will be more important than ever to uphold climate change as the most important international issue.
Opposing viewpoint: David Jones
Putin struggles with Ukraine and the economy. Citizen protests last January in Ukraine eventually brought down an outrageously-corrupt and increasingly violent Yanukovych government, also resulting in the seizure of Crimea and ongoing violence in eastern Ukraine from invading Russian soldiers. The ‘limited war’ to date has killed more than 4,700 persons and left 8871 wounded; 427,000 have fled to neighbouring countries, and about 400,000 have been internally displaced.
Many long-suffering Russians still appear to support President Putin’s seizure of Crimea; he is thus unlikely to offer peace in Ukraine soon despite the collapse of the Russian petro-economy, which has now shrunk to about half the GDP of California. With the ruble losing about 50 per cent of its value against the U.S. dollar in 2014 and interest rates hiked by Russia’s central bank to 17 per cent to defend it, Putin could respond to his mostly self-created economic problems, including Western sanctions, with more diversions outside Russia, ranging from military threats to new economic barriers.
The 28 NATO member countries must be both calm and unyielding, partly because military strength is the only thing Putin knows and respects. Only last week, he signed a document designating NATO as Russia’s No. 1 threat, and he has yet to implement the Minsk ceasefire in Ukraine he agreed to four months ago.
Islamic State (ISIS) remains a threat. In 2014, ISIS jihadists seized control of a large swath of territory in Iraq and Syria, declaring a "caliphate." The brutality of their subsequent campaign of terror, replete with beheadings and mass executions, is unconscionable; its campaign includes threats that "all religions who agree with democracy have to die," and that ISIS intends to "conquer the world." Its savvy use of social media to recruit internationally and depict violence continues, already triggering domestic tragedies in a number of countries.
Kurdish troops, assisted by the international coalition air campaign, are now providing strong counter-offensives to ISIS. Kurds have unified their forces, gaining even greater international legitimacy. To its credit, the new Iraqi government under Haider al-Abadi is implementing a long overdue plan to empower three regional sectarian identities: The Shī'a in the South, the Sunni in the West, and the Kurds in the north.
The world is increasingly reliant on the Asian economy. The continent will continue in 2015 to provide a high portion of the world’s economic growth. Many jobs in Canada and elsewhere depend on markets in China, Japan, India and the ten ASEAN member countries. Trade in services, manufactured products and natural resources are vital to Canadian prosperity; two-way trade with Asia depends on stability in Asian markets and safe and reliable sea lanes around Asia.
In China, the lack of basic human rights, the rule of law, and economic transparency, plus widespread corruption, a housing bubble, and an unregulated vast shadow banking sector are problematic for sustainable economic growth. Japan and South Korea are experiencing different governance and productivity problems that need to be addressed as well.
An auspicious beginning to 2015 was President Obama’s decision to normalize relations with Cuba, finally turning the page on the past half century. The new policy will support civil society and entrepreneurship in Cuba, expand Cubans’ access to new sources of information, and continue support for democratic reforms and universal values.
Canadians and others can only hope that 2015 will bring more international co-operation, less rhetoric, diminished mistrust and terrorism, increased good governance, and much strengthened action to address the planet’s environmental health.