2023 the year of resistance

The beginning of a new year opens a chest of hopes and uncertainties, the former a beacon in the midst of darkness, the latter a labyrinth of unknowns that only serve to unsettle. Unfortunately, the world will continue to orbit under the influence of biological warfare against SARS-CoV-2 and the geopolitical and geo-economic consequences of the invasion of Russian troops into Ukraine.

Both of these will be the most important variables, and the course of others will depend on them: to begin with, China, which will reopen its borders to international travellers from 8 January without having controlled transmission of the coronavirus. So far, there is not a single effective vaccine to stop the transmission of Covid-19; no country has yet managed to come up with an immunity serum.

Not only Spain, but also the United States, Japan, Italy and other countries are announcing the imposition of controls for all travellers arriving from China, again PCR tests and even full vaccination guidelines. The reality is that the challenge is once again enormous because the efficacy of Chinese vaccines offers little immunity and because in such a vertebrate world it will be impossible to prevent further waves of coronaviruses with their new mutations. This is precisely the greatest challenge: to prevent the spread of the strengthened and mutated virus.  

The hope is that several laboratories in the United States, Spain, France and Germany will obtain the serum that will allow people to be immunised before another, stronger mutation appears.

The most regrettable and undesirable thing would be to return to the policy of quarantines, restrictions and border controls that have done so much damage to the economy.

And to do so at a time when the global economy - on average - is heading for recession. To make matters worse, the prevalence of the war in Ukraine, on its way to eleven months of devastation and death, remains one of the main disruptors of the impact on commodities.

Commodity prices have yet to stabilise. They will not stabilise this year either because the imbalance between supply and demand has been dragging on since 2020, after the WHO declared a pandemic (11 March of that year), with confinements and quarantines disrupting supply and production chains. To date, they have not been fully re-established.

Added to this is the trade war between China and the United States that had been going on since before the pandemic (2018) and the current Russian invasion of Ukraine. A war that involves two countries that are important for world trade: Ukraine is considered one of the world's main granaries and Russia is one of the leading countries in the supply of oil and gas, but also of other foodstuffs.

The oil price war will persist because for Russia it is a way to whip the European Union (EU), which is so supportive of Kiev and the Ukrainians.

The IMF has already been discounting this scenario, which is why last October it lowered its global GDP forecast for 2023 to 2.7%. The advanced economies will be the hardest hit with an average GDP estimate of 1.1% while emerging economies will have an average GDP of 3.7 %. Russia will fall by 2.3% and India and China will grow by 6.1 % and 4.4 %, respectively.

The eurozone will feel the punishment of its aid to Ukraine with an expected GDP of 0.5% and two relevant locomotives such as Germany and Italy will enter recession with GDP forecast at -0.3% and -0.2% respectively.  

Yes, 2023 will be a year to resist and withstand the full onslaught. But this is not a time for paralysis, nor for postponing plans, but rather for seeking solutions in the midst of the storm. Because even in the economic storm there are business opportunities and opportunities to generate wealth.

Then there is the internal context of each country itself, and there the environment will continue to transfer friction, confrontation and the politics of hate and fear that works so well for certain politicians at a time when people are frightened by all this terrible combination of external factors.

This new year will have a pre-electoral atmosphere in the United States, Spain and Mexico. Presidential elections are just around the corner and the atmosphere is incendiary and ripe for attacks.

Personally, I am concerned that the war in Ukraine will add other actors and involve other warring poles, extending the magnitude of the conflict. Close attention should be paid to the friction between Iran and Israel and North Korea's strong support for Russian dictator Vladimir Putin. Kim Jong-un's regime continues to demonstrate that it has a respectable ballistic arsenal and tensions have risen significantly between North and South Korea and also with Japan.  Putin's hand in the Kosovo-Serbia and Armenia-Azerbaijan conflicts are two real time bombs that the EU and NATO should cool down with intelligence and cunning and take their role more seriously because in the case of Georgia and Ukraine, besieged by Russia, they have failed since 2008 when Ossetia and Abkhazia happened. The Minsk Protocol was a dead letter from the outset because Ukraine was seen as far away from Brussels. Big mistake.