2009 - the year Zero

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By Annamari Sipilä
     
      Do you know why science fiction grows old so easily? It happens when the writer focuses on predicting the wrong things.
      Recently-written sci-fi can seem quite ancient in 2009, in spite of all of the speeding through space and zapping people with amazing weapons.
      The reason is that the story is stuck in the past in other respects: the role models of the main characters are from the 1950s and the communications are from the ‘80s.
     
World decision-makers are living and working like science fiction writers.
      The financial crisis, which began in the United States in the summer of 2007, turned into a worldwide economic maelstrom last autumn, threatening to turn into mass unemployment, unrest, and at worst, even into war, as poverty spreads.
      Decision-makers must now decide what is significant from the point of view of the flow of the narrative. What should be done so that the world’s economic and political situation would stabilise as soon as possible? What structures and systems need to be rejected as antiquated? What is the priority of actions that have been taken? Whose interest overtakes that of others in the crisis situation?
      Unlike science fiction writers, decision-makers in the world do not aim at telling a story that is as exciting as possible. The aim is to have as steady and as stable a story as possible, with twists that are easy to anticipate.
      Also on order is a happy ending. Nearly all people in the world primarily want peace and well-being.
     
But before the plot options are put on the table, it is necessary to understand the background of the crisis.
      Olaf Cramme and Elena Jurado, directors of the international Policy Network thinktank, see three lessons to be learned in the crisis, which they say will thoroughly shake our present notions.
      First of all, the crisis showed how completely interdependent today's economies and countries are.
      The financial and economic crises cannot be isolated. They have spread to all continents.
     
Second, the crisis has hurt international trade badly. Before there were complaints of the omnipotence of globalisation. Now we have had to note that even globalisation bows down in front of the economic crisis.
     
The third lesson is that faith in the supremacy of the free market is over.
      Just a couple of years ago nobody could question the self-guiding character of the finance market without being labelled a village idiot.
      Now the conventional wisdom has taken a 180-degree turn. Bankers have become the villains of the story, and are now being called to account for the failures of others.
     
A loose group of the world’s leading industrial countries and developing countries are gathering in London for the G20 meeting to think about how to deal with the crisis.
      Immediately after the G20 meeting, the leaders of the NATO countries will mark the 60th anniversary of the military alliance. Finally, US President Barack Obama will fly to Prague for a meeting of the EU and the United States, which will be attended by the leaders of all 27 EU member-states.
      What might we expect from the cluster of super-meetings? One thing that is for certain is that there will be no quick solutions.
      As Katinka Barysch, deputy director of the Centre for European Reform notes, the G20 is a process, not a single event.
      Likewise, the value of the London meeting is in the political message that comes from it, not in the technical proposals for reform. Maintaining the image of unity is what is most important now.
     
Experts are nearly unanimous in saying that the G20 countries want to increase the power and resources of the International Monetary Fund.
      The primary task of the IMF is to save the economies that are on the verge of collapse by lending them money.
      There are those in need in Europe, as indicated by events in Iceland, Latvia, Hungary, and Romania.
      The IMF can also have a role in preventing future economic crises.
      But does the fund have a vision and the muscle for the task?
      As Professor Gunnar Folke Schuppert of the Wissenschaftszentrum Berlin für Sozialforschung (Social Science Research Center Berlin) has pointed out, the IMF has not succeeded in preventing a single financial crisis in the past 40 years.
      The rise of protectionism is one of the most visible consequences of the economic crisis.
      Free trade has started to take the back seat, as governments start protecting domestic industries and jobs.
      At the same time, protesters both on the far left and the far right are blaming international trade - that is to say globalisation - for the economic crisis.
     
Meanwhile, people forget that it was globalisation that raised 500 million people out of poverty in the past 15 years, as Richard Lambert, director-general of the Confederation of British Industry pointed out in March.
      If today’s decision-makers are not careful, the economic crisis will mean a big step back in the freeing of world trade. Going back to bilateral trade agreements is certainly not in the interests of small countries.
      The consumer might be faced with a surprise if things that they have grown used to are suddenly unavailable in the shops.
     
The banks are at the core of the financial crisis.
      That is why political leaders must first clear up the problems facing banks and to stabilise the financial markets.
      But immediately after that comes the pondering of the crisis on the societal level.
      What is the role of the State in the future?
      Is the Nordic model of capitalism the ideal for everyone, as Jorma Ollila, the chairman of the boards of Nokia and Shell recently suggested?
      And what will the ranking order of power in the world be in the future? The United States has turned from being the world’s biggest financier to the world’s biggest borrower. But can China and other developing countries be expected to take on the role that is proportional to their weight?
     
And what about climate change? How will it be possible to hold on to environmental goals in a situation in which everybody is earning less?
      The world leaders need to talk about all of this - if not next week necessarily, then in the near future in any case.
      It is paradoxical that even though the plot needs to be credible, the old familiar plot lines will not take us forward.
     
Helsingin Sanomat / First published in print 28.3.2009


Previously in HS International Edition:
  EVA scenarios: West rises, Asia wins, crisis drags on, or everything collapses (27.3.2009)

ANNAMARI SIPILÄ / Helsingin Sanomat
annamari.sipila@hs.fi