Dickson Igwe. Photo: VINO/File

No one expects the worst in life, even the acute pessimist. The day before September 11, 2001, many an employee working in the Twin Towers would never in their wildest dreams have thought the next morning would be their last day on planet earth. The idea of a Boeing 757 flying into a tower at high day, while they were seated at their desks in the office, was the farthest thing from their minds. 911 sent Caribbean tourism south at the time. The Caribbean economy is still suffering the effects of 911.

Virgin Galactic 2 was never to have fallen out the sky on October 31, 2014. Neither was a billion dollar rocket, loaded with scientific software and hardware, sitting on a launch pad in Virginia USA, expected to explode seconds after liftoff on October 28, 2014. A popular pastor and motivational speaker was not expected to board a jet for the last time in his life with family and friends in the Bahamas on November 10, 2014.

Earlier, two Malaysian airlines met their doom. One jumbo jet disappeared without trace on March 8, 2014. Another Malaysian plane was shot down over the Ukraine on July 17, 2014. 300 people are dead. Another 240 are nowhere to be found. There is unimaginable grief as a result of the 2 tragedies.

And the sight of Russian tanks rolling into the Crimea was unthinkable just 5 years ago.

It just takes one violent earthquake to send a country’s economy over the precipice. A terrible hurricane ravaging the Caribbean could easily plunge the region’s delicate and over exposed economy into deeper recession. 

US geopolitical miscalculation has helped turn the Middle East into a quagmire. Israel and Palestine are farther apart than ever. Iran appears determined to acquire a nuclear bomb. Israel is determined that this will not happen. And Israel is fully ready and capable of bombing Iran’s physical infrastructure back into the Stone Age. That would turn the Middle East into a quagmire worse than it is today.

War and drought are creating water woes in the Levant and North Africa. The next war in the region may very well be over water.

The Middle East is a region cursed by ancient hatreds, sectarian violence, religious intolerance, and an authoritarian political culture. There is 25% youth unemployment. Its oil will not last forever. When there are no more oil revenues, then hell may be a better place to reside.

On the individual level, most workers and consumers are a paycheck away from mortgage foreclosure and car repossession in these Virgin Islands. The loss of a job, or catastrophic illness, brings financial woe to many a household.

Today, an aggressive China threatens its neighbors. The Russian bear is resurgent once more. Mikhail Gorbachev, a highly respected elder statesman and world leader, speaks of the NEW COLD WAR.

And Europe and Japan are experiencing new recessionary pressures that do not help the global economy. Deflation is rearing its ugly head. There is talk of a lost decade in Europe.

Germany’s manufacturing boom has ended. Her European neighbours, and various importing nations, can no longer afford to import her luxury cars and quality engineering products, in the amounts accustomed in the past. Sanctions against Russia are not helping the global economy as they decrease business activity globally.

And China is expected to grow more slowly going forward. This has implications for global economic growth. At the root of the global economic slowdown is stagnant European demand, owing to an austerity policy gone south. Paradoxically, German policy makers are great proponents of austerity.

The European Union is the world’s largest marketplace. The chain reaction resulting from Europe’s slow economy is slowing exports in the emerging economies resulting in slower economic growth worldwide. The new global middle classes of the emergent economies have begun to feel the economic pinch. Demand in these economies is slowing as a result. The result is slower economic growth worldwide.

China’s slowing economy and the US’s growing sufficiency in oil and gas production has hit the oil price. That has further slowed global economic growth. Do not forget: oil producers are major importers. However, dropping oil prices promise to be a boon to oil importers. Lower oil prices should reduce prices and the cost of living.

On the environmental front, climate change and a warmer ocean are causing sea levels to rise. Coastal cities and towns are threatened in the Pacific, Indian Ocean, and even parts of the Caribbean. The coral reefs of the Caribbean and many other regions are being wiped out owing to myriad environmental factors.

This is affecting the quality of the tourism product that these communities rely on. Fish stocks are declining. And many a father looks at his child and wonders whether his or her life will be any better than his.

The USA is the one bright spot economically. This owes to the fact that the US consumer is feeling better these days. He or she is still feeling the burden of debt from the Great Recession of 2007-2009. However, the US consumer has seen the light at the end of the tunnel. It is not an incoming express train. The US consumer is consequently spending once again. This owes to the fact that the US is much more forgiving of bankruptcy and bad debt than Europe. The US consumer has seen the end of his debt odyssey.

That consumer demand is creating new businesses and jobs, in the world’s most powerful economy. The USA is currently dragging the rest of the global economy along.

Thank the Feds for a policy of stimulus in the form of quantitative easing that released billions of dollars into circulation, generously lubricating the US economy. The US has been sticking to the policy of economic stimulus. It has paid dividends.

The Europeans went in the opposite direction. Austerity and spending cuts were thought to be great virtues. Much of Europe is today feeling the pain of a recession that will not end. There is even the threat of depression. Depression is a more severe recession that lasts for a decade or more. Europe is declining rapidly. Poor demographics are not a help. Europe possesses a low birth rate and an aging population.

Europe faces further threats from a very muscular Russia in the East. Her economy is stagnant and may contract. The USA, Western Europe’s once unrelenting ally is pivoting towards the Asian Pacific. A colored president born in the Pacific does not view Europe as an indispensible ally. The center of economic gravity has shifted to the Pacific. Europe is no longer the geopolitical priority it once was for the US. The new region in play is Asia, the Pacific, and the Indian Ocean.

This spells one thing for the Virgin Islands. The country is a tiny country in the North Atlantic. It is a dependency of a Britain that is part of the European Community. Britain is confused these days. She is unsure about whether she wants to continue with the European Experiment in a complex federalism.

Economics writer Edgar Leonard stated in a recent newspaper article that the need for a robust, Virgin Islands social and economic vision, to counter the threats from an unpredictable world is crucial, even paramount. Vision is the lamp that will lead the country through the dark and fog of the present unpredictable global environment.

Yes, Leonard was absolutely right.

To be continued

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