Most economists expect the developed world to continue along the path of a moderate economic recovery in 2011 and the emerging world to witness rapid economic growth.
The full effects of the harsh deficit reduction measures introduced in many of the eurozone’s periphery members will be felt this year, and there are bound to be social and political consequences.
Hungary has assumed the rotating six-month presidency of the EU with the motto ‘a strong Europe with a human touch’. Its priorities include the economy, farm reform, energy, EU enlargement, financial governance laws, implementation of the so-called Europe 2020 strategy, as well as opening talks on the bloc’s post-2013 budget.
Poland takes over the presidency from Hungary in July and it will be interesting to see how EU-Russia ties progress this year, considering the bloc will be led by two former Communist countries with first-hand experience of life under Soviet domination.
There are bound to be more cracks in the Conservative-Liberal Democrat coalition government in Britain with MPs from both parties becoming increasingly frustrated at the compromises forced upon them by the power-sharing agreement. However, I believe the coalition will remain in office.
In Italy, I don’t expect Silvio Berlusconi’s minority government to last much longer and early elections now seem almost certain.
In Spain, in a bid to prevent an electoral meltdown for the ruling Socialist Party, Prime Minister Jose Luis Zapatero could well announce he will not lead his party into the 2012 election.
French President Nicolas Sarkozy will be focused on next year’s presidential election and will try to boost his popularity as he presides over the G8 and G20.
Germany’s influence within Europe will continue to grow, not least because the country is expected to enjoy fast economic growth. The popularity of Chancellor Angela Merkel’s Christian Democrat–Liberal coalition will be tested this year in six state elections, where the opposition Greens are expected to gain votes, mainly at the expense of the unpopular Liberals, which will damage Merkel.
The political outlook for Russia in 2011 is not at all encouraging and few analysts expect the erosion of political reforms to be reversed. December’s parliamentary elections will no doubt be won by Valdimir Putin’s United Russia Party.
A considerable amount of gridlock in the US between President Barack Obama and the Republican-controlled House of Representatives is inevitable. The President is likely to move to the centre to accommodate his opponents, or to steal their political clothes. This is the year when jobs need to be created – otherwise Obama’s presidency is probably doomed.
In foreign policy, Obama’s main headaches are bound to be Iran – where little progress has been made in curbing the country’s nuclear programme – and Afghanistan, where the president has committed himself (and taken a huge gamble) to begin sending US troops home by July.
Another of Obama’s deadlines is in September – the date he suggested Israelis and Palestinians should reach an agreement on a peace settlement. A stalemate in the Middle East will harm Obama’s efforts to reach out to the Islamic world and further radicalise the Muslim masses, something al-Qaeda will take advantage of.
A country to be carefully watched in 2011 is North Korea, which could undergo a hereditary transfer of power. According to the Seoul-based Institute for National Security Strategy, North Korea could this year conduct a third nuclear bomb test and shell not only front-line South Korean islands but also South Korean guard posts along their land border.
Needless to say, such attacks would almost certainly result in a massive retaliation by South Korea and provoke an international crisis.
In Brazil, Dilma Rousseff will replace Luiz Inacio Lula da Silva as president and will have the difficult task of matching Lula’s excellent economic record over the past eight years.
China will be preparing the road for a new set of leaders to take over in 2012. The 90th anniversary of the Chinese Communist Party will no doubt encourage liberals to once again highlight the lack of political reform in the country.