2010 the Year of Anger Management?

Categorized | Economy, Life

2010 the Year of Anger Management?

Posted on03 February 2010. Tags: Brazil, Economist, Economy, Laza Kekic, Politics, protests, The World

In their “World in 2010″ annual almanac of predictions, the Economist looks at whether this will be a year of social unrest, and included is the map below as a helpful guide to countries at the greatest risk:

I highly recommend you purchase this almanac for a good overview of where the world is more-or-less heading. In the accompanying article on this particular topic, Laza Kekic of the Economist Intelligence Unit writes the following:

[A] congruence of calamities could prove politically tempestuous: a sharp rise in unemployment, increased poverty and inequality, weakened middle classes and high food prices in many countries. Austerity is also on the agenda in 2010 following the extreme fiscal relaxation of 2009.

Historically, political reactions to economic distress have tended to come with a lag. The same is true of labour-market developments: even once the recession ends, unemployment continues to rise. According to Economist Intelligence Unit (EIU) estimates, in 2010 there will be 60m more unemployed worldwide than in 2008. The International Labour Organisation reckons some 200m workers are at risk of joining the ranks of people living on less than $2 a day.

Declines in incomes are not always followed by political instability. Vulnerability to unrest depends on a host of factors. These include the degree of income inequality, the state of governance, levels of social provision, ethnic tensions, public trust in institutions, the history of unrest and the type of political system (“intermediate” regimes that are neither consolidated democracies nor autocracies seem the most vulnerable).

Something to watch.

Brazil’s position in the low combustibility category mirrors the magazine’s recent profile of the continuing boom of the country:

Latin America’s largest economy is enjoying its best moment for a long time. One of the last countries to enter the global downturn started by the financial sector in 2007, Brazil was also one of the first to come out of it. For the first time in its history it has found a combination of economic growth, low inflation and full democracy—and the good fortune looks set to continue.

The story reminded me of a 2007 article I read in the New York Times about Brazilian immigrants to the U.S. who were emigrating back to Brazil:

That decision — to give up on life in the United States — is being made by more and more Brazilians across the country, according to consular officials, travel agencies swamped by one-way ticket bookings, and community leaders in the neighborhoods that Brazilian immigrants have transformed, from Boston to Pompano Beach, Fla.

No one can say how many are leaving. But in the last half year, the reverse migration has become unmistakable among Brazilians in the United States, a population estimated at 1.1 million by Brazil’s government — four to five times the official census figures.

To explain an often wrenching decision to pull up stakes, homeward-bound Brazilians point to a rising fear of deportation and a slumping American economy. Many cite the expiration of driver’s licenses that can no longer be renewed under tougher rules, coupled with the steep drop in the value of the dollar against the currency of Brazil, where the economy has improved.

Brazil’s ascendency is nothing but good news for the Western Hemisphere.