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Karina's Column

An insider’s view on the City of London and beyond

Pariah nations re-join the global community


187 million new opportunities

A tsunami of pessimism overwhelms the Western world today. The cauldron of war and death in the Middle East, the refugee crisis, Islamist terrorism, Trump’s ascent, increased chances of Brexit, Brazil’s implosion and huge economic uncertainty, to name a few.

Having recently returned from Colombia, I beg to differ. Like most things in life, perspective is all. There, an historic agreement is being forged between the government and the FARC, a terrorist organisation that thrived for 50 years. Although a deadline has been missed, US Secretary of State John Kerry recently gave impetus to the talks, while the double digit growth of tourism reflects the atmosphere of optimism.

Yet Colombia, even with its troubles, was never an international pariah. There is even more of a reason for hopefulness when you look round the globe at previously isolated nations that are now re-joining the international community. Their combined populations add up to 187 million people.

In November 2015 Argentina voted out a government that was nothing but a wealth accumulation machine veiled in a thin film of ideology. President Mauricio Macri now runs a centre-right government that is briskly dismantling the Kirchner legacy by slashing currency and trade controls and normalising relations with the rest of the world, including awkward creditors.

Much more dramatically, Cuba and Iran are heading back into the mainstream. President Barack Obama’s historic visit to Cuba in March marked the end of a Cold War remnant and an official welcome to the West. In truth, changes in Cuba were already well on their way, with the government of pragmatic President Raul Castro sending officials to the West to learn how to run the country better, while economic liberalisation continues apace under the ludicrous state banner of “actualisation” of the system.

Meanwhile, lifting sanctions after a 15 year standoff with the Islamic Republic of Iran is already leading to economic opportunities for Western countries. Few doubt that with 80 million people living there, including a large and educated middle class, there is massive potential.

Still in Asia, Myanmar, a country with a population of over 54 million is also returning to the global system, grappling with a form of democracy and with forecast growth of over 9%.

There are countries whose situations are less clearly positive but where the potential exists for major transformation. Venezuela is still on the US sanctions list. But the opposition Democratic Unity Alliance won two thirds of the seats in Parliament last December. There has been a stand-off with President Nicolas Maduro, the uncharismatic successor to Hugo Chavez, and a military coup is possible. But given the dire state of the economy, even his government has had to confront reality, devaluing the currency and raising fuel prices.

On the economic front, commentators generally focus on the negatives, of which there are indisputably many. However, a record low oil price and low commodity prices benefit consumers and manufacturers. As for the lack of inflation, shoppers are profiting. Employment is at a record high in the UK, while the US has had six years of uninterrupted job gains. Both their governments have realised the need to ensure the working poor share in the good fortune by raising the minimum wage. In fact, California, one of the world’s largest economies, just agreed to raise the minimum wage from $10 to $15 by 2022. For those who argue against these sort of measures, let us remember the capitalist system needs consumers who have the income to consume.

On a multinational level, the Paris climate agreement signed in December 2015 is ground-breaking: 195 countries adopted the first universal, legally binding global climate deal to limit global warming to well below 2 degrees centigrade. The accord is also a pathway to achieving other deals on issues of world importance, such as water scarcity.

I could go on, writing about medical and scientific advances, or about gay couples being able to kiss in public, or about the Starbucks and Googles of this world finally realising they will need to pay tax. Then again gentle reader, perhaps it is enough for all of us to consider our lives and give thanks for what we have.

This column appears in Dialogue, the leadership and management review

catherine phelps