Happy New Year to all our Readers, Advertisers, Sponsors, Correspondents, Contributors, Stringers and Well-Wishers
Venkat Raman
Auckland, January 1, 2025
As we enter the New Year, the global landscape is marked by significant challenges and uncertainties. From ongoing conflicts in the Middle East and Ukraine to the recent change in administration in the USA, the world is navigating a complex web of geopolitical tensions, economic fluctuations, and social upheavals.
We explore the prospects for the coming year, considering these critical factors and their potential impact on international trade and the global economy.
Middle East Conflicts
The Middle East remains a focal point of global instability. The past year has seen an escalation of conflicts, particularly in Gaza, Lebanon, and Syria. Israel’s military operations in Gaza have intensified, leading to significant humanitarian crises. The conflict has also spilt over into Lebanon, with Israel targeting Hezbollah, further destabilising the region. The fall of Bashar Al Assad’s regime in Syria has created a power vacuum, leading to increased violence and displacement.
These conflicts have far-reaching implications. The humanitarian toll is immense, with thousands of lives lost and millions displaced. Economically, the instability disrupts trade routes and energy supplies, contributing to global market volatility.
The international community’s response, including potential sanctions and diplomatic interventions, will be crucial in shaping the region’s future.
The Ukraine Crisis
In Ukraine, the conflict with Russia continues to escalate. The recent months have seen intensified battles in the Donbas region, with Russian forces attempting to expand their territorial control. The humanitarian situation is dire, with widespread displacement and infrastructure damage. The conflict has also strained Ukraine’s economy, which is heavily reliant on international aid and support.
The geopolitical ramifications of the Ukraine crisis are significant. The conflict has strained relations between Russia and Western nations, leading to increased military spending and a renewed focus on NATO’s role in European security. The potential for a negotiated settlement remains uncertain, with both sides preparing for prolonged conflict.
Change in US Administration
The recent change in administration in the United States, with Donald Trump returning to the presidency, has introduced new dynamics in global politics.
Mr Trump’s administration is expected to pursue a more isolationist foreign policy, focusing on ‘America First’ principles. This shift could impact international alliances and trade agreements, as the US reassesses its commitments to global institutions and partnerships.
Domestically, the Administration’s policies on Immigration, Healthcare and Economic Reform will shape the US’s internal landscape. Internationally, Mr Trump’s approach to China, Russia, and the Middle East will be closely watched, as these relationships are pivotal to global stability.
International Trade
International trade is poised for a rebound after a challenging year.
The first quarter of 2024 saw a recovery in G20 merchandise exports, driven by strong performance in China and the United States. However, trade tensions remain high, particularly between the US and China, as both nations navigate complex economic and political landscapes.
The global supply chain, still recovering from pandemic-related disruptions, faces new challenges from geopolitical conflicts and protectionist policies. The rise in trade in services, particularly in travel and financial services, offers a glimmer of hope for economic recovery. However, the sustainability of this growth depends on resolving underlying tensions and fostering international cooperation.
The Global Economy
The global economy enters the New Year with cautious optimism.
The International Monetary Fund (IMF) projects global growth to be around 3.2% in 2024, with a slight increase to 3.3% in 2025. However, persistent inflation, particularly in the services sector, poses a significant challenge. Central banks worldwide are grappling with the delicate balance of curbing inflation without stifling growth.
Trade tensions, particularly between major economies, add to the uncertainty. The potential for higher interest rates and policy shifts in response to inflationary pressures could impact global investment and consumption patterns. Additionally, the ongoing conflicts in the Middle East and Ukraine, coupled with the US’s changing foreign policy, create a volatile environment for economic planning.
As we look ahead to the New Year, the world faces a complex array of challenges. The conflicts in the Middle East and Ukraine, the change in the US administration and the dynamics of international trade and the global economy all contribute to an uncertain future. However, with concerted efforts towards diplomacy, economic cooperation, and humanitarian support, there is hope for navigating these turbulent times.
The international community’s ability to address these issues collectively will be crucial in shaping a more stable and prosperous future. As individuals, staying informed and engaged with global events can help us understand the broader context and contribute to positive change in our own ways. Here is to a New Year filled with resilience, hope, and the pursuit of peace and prosperity for all.
We believe 2025 will be a year of recovery, reconciliation, reconsolidation and rehabilitation. The world economy would get on to the path of recovery, contrary to the theories of sceptics and those who believe we are in for a long spell of disaster.
Our World in New Zealand
In our own little world, we would do better as manufacturers, importers, exporters, wholesalers, retailers, education providers and so on. We will continue to attract foreign investors, students, migrants and tourists. We will also continue to lose our people going across the Tasman and across the world for better economic and social prospects.
We will retain political stability and sanity but continue to debate and disagree on the Treaty, Budget deficits, and a thousand other issues.
We will continue to speak about celebrating our cultural plurality, social partnership and community engagement.
We will do all of the above because talking is better than not saying anything.
Most important of all, we will remain as good New Zealanders as we have always been – with passion, compassion, respect, self-respect, the will to work and the will to succeed.
Just as every raindrop holds a flower, every moment of the New Year should spell peace, harmony and happiness.
