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A sign of the times

Social and financial turmoil in the West will eventually have an impact in Asia

  • Father Mike Kelly SJ, Bangkok
  • Thailand
  • August 9, 2011
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London is burning. The violence and looting have spread to other English cities. Thieves outnumber police as the situation appears to be beyond control and its growth is contagious.

Throughout the rest of the world, stock markets are tumbling at a rate not seen since the 2008 global financial crisis sent stocks into free fall and markets into turmoil. We are heading for our fourth consecutive day of falls and the end does not seem to be in sight.

Are these two mega-phenomena related and if so, what might their relationship say about where we are and where we are headed?  And, because we live here, what relevance does it have for Asia?

What does the violence and looting say? It at least says people are angry and that in apparently affluent societies, the benefits are not shared in a satisfactory way. Riots throughout history have been driven by grievances which come down to basics: food, security, confidence about survival.

What is happening in London has not been contained to that city. And, I suspect, it won’t be restricted to the United Kingdom. Unemployment in the United States and many European countries is high and absolutely refuses to come down. Behind the unemployment figures hide people who are underemployed and others who have just given up looking for work. This is a formula that suggests the precedent in Britain could be just the beginning for people seeking a way to vent their frustrations.

And what do the collapsing stock markets and the downgrading of the credit rating of the US say about what we see in Britain? That the problem is only going to get worse. Investment capital is disappearing from markets, hidden, if it exists, in the deep pockets of terrified individuals and companies. These investors have suddenly seen their net worth collapse again for the second time in four years. And what will be the effect? No new jobs created; people with work now being told they are redundant because their companies can’t afford to pay them; the government of the wealthiest nation on earth (the US), now virtually insolvent, and unable to stimulate an economy on whose prosperity so many others depend.

The result: more frustration among alienated people who see no future for themselves in societies and economies where the financial gap between people is growing larger each day; riots driven by resentful people wanting anything they can get and to settle some scores they have wanted to address for a long while; crackdowns by governments whose legitimacy and control are threatened; misery and misfortune for any swept up in this whirlwind.

Trouble is ahead. There’s no end in sight just yet to the stock tumble.  And the frenetic energy of angry and frustrated people in Europe and the US is far from spent.

What does it mean in Asia? Apparently untroubled by this US/European collapse, Asian economies appear to be chuffing along at a great rate: high growth rates, export surpluses, China as the biggest holder of US currency, etc. The sky is the limit as both the absolute and relative positions of Asian economies get stronger.

But not for long if US and European currencies decline, purchasing capacity reduces and banking strength is compromised. In such an interdependent world, what happens in Europe and the US will have an impact in Asia, probably sooner rather than later.

And what will be the response? The reaction of governments, particularly in China and Vietnam but elsewhere also, to the Arab Spring earlier this year is instructive. Non-democratic governments across Asia were terrified that what happened and continues in North Africa and the Middle East might spread to Asia. That provoked heightened activity by the police and internal security officials. Even UCAN felt the effects of that with police intrusion into the lives of our reporters and increased surveillance and scrutiny of their activities.

But for the Church the impact will be felt more widely than UCAN.

In the first instance, if instability leads food shortages, medical needs or traumatized people, Church agencies will be involved in addressing these issues.

But the impact on the Church in some countries (China, Vietnam or Myanmar) might be sharper. Perhaps for different historical reasons, authoritarian governments across Asia see the Church as a threat – an independent community that can go its own way, relate to foreigners and, in the view of some such governments, be the basis for sedition.

China has long been known to have a life of demonstrations and riots that rarely gets reported. There are allegedly 20 to 40 million workers on the move around China all the time looking for work. The social instability and its impact on the economy are abiding concerns of the Chinese leadership and a constant force for many commentators on China’s ballooning growth.

Such a period of instability could lay ahead if the European and US volatility endures. For Asia, the impact will be later but significant.

Father Mike Kelly SJ is the executive director of UCA News
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