Mexico and Indonesia are the "Next BRICs" Everyone Is Talking About
Mexico will be the Brazil of 2013. (I know this because it was already the Brazil of 2012.) New regime. Finally likely to get to some Pemex reforms. Fourth-largest shale gas reserves in the world. Benefits as manufacturing facilities move from difficult-to-work-in China and back closer to the United States. As for Indonesia, this is the big country that emerging markets investors are starting think is showing renewed signs of life after a prolonged (15-year) struggle. Lots of people. Lots of energy. Low priced manufacturing. Close to big markets. And now, gradually, the government is starting to get its act together, somewhat. (Indonesia is still a state with strong anti-central government tendencies, which can work for many investors. Corruption does remain a problem, however.)
China Strains Against the Limitations of Its System
Look at China's recent hamfisted effort punish the New York Times for publishing the truth about corruption among its elites. Some see in China's recent moves efforts to echo U.S. "hard power" with expansion of its Navy and investments in next-generation forms of warfare from space to cyber to unmanned drones, and U.S. "soft power" through the use of their checkbook and the influence it buys. But most telling is what might be called their use of "brittle power": Denying visas, cracking down on Internet freedoms, squabbling with the Japanese over deserted rocks all fall into this category. At first glance the power may seem hard enough but it is actually a sign of weakness, not strength, and it can crack and crumble away quickly, revealing the real structural problems the new leadership is going to have to find better ways of tackling.
The year 2013 will also see big stories that are easy to predict but hard to fill in the details-more climate-driven disasters, more scandals in financial markets and among emerging markets elites. And it will see stories more important than all those above that don't get enough ink. Climate change is one of these of course.
And Then, There Is the Greatest Social Failure of Our Era...
The larger looming story that troubles me even more is our continuing failure to protect women or their rights. The U.S. in particular is going to face some very difficult choices in the year(s) ahead on this point. Are we so eager for closure in Afghanistan or stability elsewhere that we are complicit with putting in power regimes that will continue to suppress the majority population, deny them education, deny them protection under the law, allow them to be abused under the protection of barbarous and indefensible "cultural traditions?" Will countries like India continue their tradition of failing to enforce the law against rapists who prey on their women, as in the case of December's horrifying Delhi gang rape? Will the gunmen who targeted Malala in Pakistan continue to seek to intimidate those who emulate the courageous schoolgirl? Will women continue to be under-represented economically and politically in almost every country in the world? My fear is that the answer will be "yes" and that in the year ahead we will see even the world's most progressive and enlightened powers continue to feed the greatest global social failure of our age, by looking away and accepting the unacceptable.