2023 Outlook: From the Economy, Climate change, Covid 19, and yes, Politics.

By Jude Thaddeus.

Image Courtesy: Research Outreach

Fears from various pundits and common citizens alike suggest that 2023 might yet be another year of a global recession. A recession worse than the 08/09 one.

This, ocassioned by the ripple effects of covid 19, the Russia- Ukraine War that followed after, Energy crisis, climate change dilemma, food insecurity, and the increasing poverty especially within the global south — as a result of all of the above.

But amidst these fears, there are those who still strongly hold the belief that 2023 is the year of the great rebound. The year that is going to defy all the odds. (And no. Not based on the ‘new year, new me’ resolution that is ever rampant at the turn of a new year — but based on other equally measurable assesments)

So, what can we say the 2023’s outlook looks like?

When covid struck in 2020, the global economy suffered a meltdown. Jobs were lost. Supply chains were affected. Meaning, manufacturers could not access raw materials, and consumers could not access finished goods. Consequently, commodity prices sky rocketed. Disposable incomes reduced. Savings and investments plummeted. And the global economy contracted.

As this was taking place, Governments needed to cushion their own from adverse health and economic effects. And so, Countries, especially in the global south, would find themselves taking in more loans - not only to mitigate the Covid pandemic, but also to protect their currencies against the effects of already existing debts that they had.

Three years later, the global economy has proved itself to be more resilient and emerged stronger. New jobs (and ways of doing old jobs) have emerged. The pandemic, equally brought with it new opportunities. Individuals such as the online sensation Khaby Lame found themselves building enterprises that they could probably never have imagined possible. All, courtesy of new opportunities out of a pandemic.

It was hoped that the trajectory could only be upwards. But that might not really be the case.

Covid is still proving to be a challenge - as is being witnessed predominantly in China. The very same place it all began.

The emergence of a new covid variant in China is already causing dilpmatic tiffs. Europe and the West at large have a feeling that China is not putting enough mitigation measures — such as lock downs, mandatory wearing of masks, regular testings and announcing of accurate infection numbers. And hence, to counter, Europe is already imposing travel regulations on passengers arriving from China. Reintroducing measures such as producing of negative test certificates, 14 days quarantine, et cetera.

The above could lead to a slow down of almost everything. China itself being a leader in the global supply chain. This, knowing too well that global supply is yet to fully recover from post 2020 covid. China is putting its economy first this time round - at least from the look of things. And the West want it the other way. And China, seem reluctant to bend backwards.

If by any chance this Covid variant explodes again this 2023, and spreads across the globe, well, your guess is as good as mine.

Although from where I sit, I highly doubt the World will be facing covid again this year.

Climate Change and Energy Crisis.

Climate change and the accompanying energy crisis dominated the better part of the 2022 geopolitical conversations. Culminating into the COP27 at the end of it.

Calls for adoption of clean energy, environment friendly manufacturing, waste management / recycling, safe agricultural practices, purchasing of carbon credits by manufacturers and manufacturing Countries, and the calls by African leaders to have rich Countries fund climate action mitigation and adoptation through financial reparations. That, it is the rich Countries responsible for the adverse effects of climate change, and that, it is the poor Countries that are now carrying the burden for it. And so, rich Countries are obligated to finance poor Countries in tackling climate change.

While it is indeed true that climate change is already posing great risks around the globe, tackling its adverse effects will require huge sums of resources. And at the moment, sources for these resources remain a question that the year 2023 will have to keep searching for its answers.

It is easier said. But humans will not easily let go their old ways of doing things. Especially when the old ways are still tied to their livelihoods.

The so called dirty energy remains a huge source of income for many. From the large scale manufacturer, to the mid sized retailer, upto the consumer at the bottom of the pyramid.

Take for instance, solar energy, or wind energy. These are clean energy sources. But for them to be the most dominant form of electric power, Governments must ensure that it is not only cheaper for both the manufacturer and consumer to access, but also a substitute form of livelihood for those already in the electricity sector. Lest they create unnecessary bottlenecks just to protect their already assured livelihoods.

Or, in an African rural setting, for the Government to substitute charcoal / firewood, with a cleaner, greener, cooking alternative, it must ensure that this alternative is not only cheaper, but accessible.

Unfortunately, that is not the current state of affairs.

African Governments, this 2023, must reconsider how they handle green startups and companies by providing incentives for them to remain afloat while manufacturing, and still make profits as they distribute their green products to those who need them the most, at cheaper rates than the dirty options already present.

It beats logic to talk about how bad cutting of trees is, if those around it have no other alternatives but to cut the trees down for cooking - Or for selling to earn a living.

Brazil is one country that has been louded for finding an alternative to fossil fuel by use of a cleaner biofuel - by processing sugarcane to produce fuel for cars. Creating a substitute for petroleum.

But, Brazil had to first provide incentives to farmers to focus more on sugarcane planting. Increasing availability of the raw material for production of fuel. Sugarcane farmers would make encouraging profits that further motivated them to continue with the farming.

Secondly, Brazil will encourage car manufacturers to consider models that can work with both fuels generated from old fossil fuel technology, and the newly introduced biofuel technology. So that the consumer can have a chance to choose between the two depending on affordability, availability, and effeciency.

Thirdly, supporting research. Research on biofuels is still ongoing World over. For fossil fuels to be substituted completely with greener options, Countries must continue funding research, knowledge and education.

And as even poor Countries continue to call for financial reparations from rich Countries, where these monies are to be channeled, should equally be well thought out and anchored on research and knowledge.

The economies of tomorrow will be anchored on research and knowledge, and the global south must adopt. Governments in these parts of the world must stop their preoccupation with the brick and motor skills of yester - years in the name of exporting cheap labor to whomever. Let that labor be first utilized in the transformation of their own Countries.

And to recap on the matter of financing, and the hope that rich Countries will create a fund to finance poor Countries, well, I don’t see it happening this 2023. COP28 might come and go. Speeches will be made. But, it is what it is.

Strategically I think more can be done through bi-lateral agreements. Country to Country - based on mutual understading. Country to company, Country to individual et cetera.

It will be easier when a Country is signing a deal with another Country, or with a company, or with an individual, to push for agreements that are environment friendly.

Most of the time, it is the richer Countries that badly need the poorer ones to continue with their own sustenance. It is time the poorer Countries realized this and improved on their negotiation capacity.

If a rich Country or company seeks to invest in a poor one, some of the conditions should include mandatory contributions to climate change mitigation and adoptation. And the poor Country should equally ensure that these contributions do exactly what they are meant to do.

In conclusion, I want to believe that whether 2023 will be the year of another recession, or the year of the great rebound, it will greatly be determined by political behaviors, actors and actions, rather than wishes.

About the author:

Jude Thaddeus is an Entrepreneur, a Sociopolitical Commentator / Strategist, Author, and Team Lead @ Brave Politics.