The World Economic Forum is presently holding its annual meeting in Davos, Switzerland, and is hosting innumerable discussions – in line with the non-profit organisation’s ambitious slogan, ‘Committed to Improving the State of the World‘ – exploring what are deemed to be the most pressing issues of our time: environmental sustainability; the global gender gap; and strengthening the international monetary and financial system against future shocks.
However, there is one issue which does not appear to have been judged worthy of significant coverage at this year’s convention, an amazing state of affairs given its salience for vast swathes of the planet’s economy: a fall – perhaps a precipitous one – in the medium-term value of the United States dollar. Until recently a currency unit without compare, the dollar is now facing the prospect of a devaluation without precedent: the injection of vast amounts of new dollars into the financial system via quantitative easing, the sensational levels of debt being held at federal and state level and the generally poor condition of a US economy where around 20% of the population are now either dependent on government aid to obtain food, or barely eating at all.
Recently, a number of countries have begun moves to limit their dollar exposure. Russia and China have agreed to no longer utilise the US dollar for trade between themselves, and Turkey and Iran may follow suit. China, a major holder of US debt, is actively pursuing a dollar diversification strategy, and even countries with historically intimate ties with the United States – such as Kuwait – are decoupling themselves from the currency.
The reasons this should concern the delegates at Davos are multifarious, but can be summarised thus: a significant and sustained decline in the value of the Greenback will ultimately fatally undermine the case for its status as the world’s reserve currency, with devastating consequences for the general population of the US, and a period of probable volatility and great change in store for much of the rest of the world. An absence of meaningful discussion of this issue – at Davos and elsewhere – will only exacerbate its eventual impact.
Novelist-turned-filmmaker Charles Michel Duke recently blogged about events in the Maghreb, posing the fascinating question of whether other Arab publics may follow Tunisia’s example of ‘regime change’.
While it is difficult to predict these things with any precision, this issue seems to illustrate as much as anything else the problems with treating the Arab world as monolithic bloc. Tunisia, while in some ways better administered than many developing countries, contained numerous ingredients that made popular revolt more likely: a much-disliked head of state; an educated, young population which is struggling to perceive a prosperous future; and endemic human rights abuses.
Prima facie, it may seem that some other Arab countries share one or more of these attributes, but the reality on the ground is far more complex. For example, while Kuwait is many respects heavily-centralised and autocratic, it vaunts one of the most lavish welfare states anywhere on earth: this is, after all, a country where the government regularly cancels consumer debt incurred by its citizens. While the Jordanian people are experiencing austerity, in Queen Rania they possess one of the very few world leaders who is almost universally admired.
In all likelihood, change in Arabic-speaking countries – much like elsewhere in the world – is most likely to happen where the public have little incentive to support the status quo and where, like a Fry and Laurie sketch, things are truly grey and hopeless: ruling classes with legitimacy crises, chronic unemployment, plummeting standards of living and a paucity of basic freedoms. Perhaps the most significant thing about the Jasmine Revolution is that a region that many associate with all that is retrocessionary has begun to become synonymous with a kind of change that even ten days ago seemed beyond the realms of possibility.