The future isn't what it used to be

OK, so 2013 is buried with a stake through its heart, 2014 is looking up at us with the wide-eyed innocence of youth, and I'm thinking predictions. "Prediction is always difficult, and even more so than when it concerns the future." That is not, unfortunately, my own line, but I don't remember where I read it, so let's spread it around as the work of that universal genius, Anon.

Before we start with the predictions, let's just see what kind of raw material we have to work with.

There are 195 independent countries in the world. More or less. It's hard to tell at the edges. In September Scotland will vote on independence, for example, and then there's places like Vatican City and Palestine and Puerto Rico. And Tuvalu. Point being, not all countries are created equal. Sorry.

So let's look at the biggest inequality, wealth. What's the richest country in the world? The US. Measured by sovereign states, that is. Measured by unified economies, it's the EU. Sorry all you Americans. Australia ranks around twelfth on both.

Will it last? Let's move on to predictions. This is an easy one: average global growth will be around 3.6%, but in the US, Europe and China, roughly two-thirds of global output, "growth is not gathering pace, or only very slightly." For Australia, Ms Katrina Ell , who's a Moody's Analytics associate economist said: "We are cautiously optimistic earlier rate cuts will bring growth back to trend at 3 per cent later in 2014." But as this prediction concerns the future, we won't hold her to it.

Anyway, gross GDP is gross. What happens when you divide a country's wealth up among it's citizens? It all changes. The world's richest countries per capita are Qatar (oil) and Luxembourg (shady banking). Australia comes in at number 11. And while we can't learn anything from Qatar, Mr Hockey might like to think a little about Luxembourg. The poorest, by the way, are Burundi, Liberia and the Democratic Republic of Congo, where GDPs (PPP) per capita are $400, $386 and $312, respectively. (If you want to know where Australia fits in, look at the pictures).

Does being rich make you happy, as a country? Or, given that Australia is already rich (number 12 by gross GDP, number 11 by GDP per capita, 3% growth by end-2014), does getting richer make you happier?According to current theory, it doesn't. But according to recent research, the relationship between happiness and income becomes stronger, not weaker, for countries with average incomes over $15,000. Australia's GDP per capita on a PPP basis for 2012 was US$43,300 (US dollars). But before you get all excited, I should mention that the study turned out to be inconclusive, and I can't actually promise that you'll be 3% happier at the end of 2014.

Money isn't everything though. Do you measure your happiness and success by the things you own? The Chinese do: 71% agree with the statement, "I measure my success by the things I own." Only 24% of Australians feel the same.This lack of materialism is bad for us - how's the economy going to grow and out national happiness increase if we don't get out there and buy, impelled by the feeling that our neighbours at sneering at us for our tiny TVs and last-year cars? So make it your aim in 2014 to consume like there's no tomorrow.

Yes, there's no underestimating the Joneses (as in keeping up with) effect. Income inequality is good for us, it makes us envious and edgy, and more prone to buy stuff. Income distribution is measured by the Gini coefficient. Australia has a Gini of 0.468 before taxes and transfers (meaning before the government takes your hard-earned out of your pocket it stuffs it in the pockets of the undeserving poor), but this falls to 0.336 after. Norway starts at 0.410 and ends at 0.250, and the US goes from 0.486 to 0.378. So we're more like the virtuous Americans than the socialist Norwegians. The relevance of this to forecasts for 2014 is, of course, that Mr Hockey has hinted at tax reforms which will make us even more virtuous. (More up to date, and more serious, information here).

And what about democracy? Is it getting to be the norm?Oh dear, the Economist Intelligence Unit says not - "Democracy at a standstill", it says.

Despite this, and if we're not living in Egypt or Syria or a few other places, at the end of 2013, we're pretty happy with things. 61% of us are content with the direction the country is headed. And that's a bit odd - if we're so happy, why did we throw out Labour? Yet our contentedness is world-beating - only the Chinese score higher, at 86%, and their economy is growing far faster than ours and there's no way we're going to be the world's largest economy any time soon. In fact this whole list looks peculiar next happiest after the Australians are the Russians, followed by the Spanish, and I thought one of those had a megalomaniac for a president and the other one was on the skids. Something's wrong.

So was 2013 the best year in history? One brave soul says it was, and gives five reasons: Fewer people are dying young, more are living longer; Fewer are living in extreme poverty, and more are happy (see above); War is less frequent and less deadly (we're winning the war on war?); murder and violent crime are falling way down (tapparently it's all to do with banning lead in petrol - if you don't believe me, look at Pakistan); and racism, sexism, and other forms of discrimination are falling world-wide (and we'll have same-sex marriage yet). Great. 2014 is looking good.

On, then, to 2014. On the economic front things aren't wonderful, but they're not too bad (see above). How about other fronts? How about conflicts, of which we had far too many in 2013 even if the trend is down? The Council on Foreign Relations has identified a number of potential conflicts for 2014. Some are predictable (Afghanistan, Syria, North Korea), but others are less so. Jordan, Iraq and Pakistan are all at risk of internal instability. Possible Indian-Chinese border clash. Outbreaks of violence between Buddhists and Muslims in Burma.

On the same theme, there's this study of political risk trends for 2014 from global risk analytics company Maplecroft. It's aimedt o "enable companies and investors to monitor the key political issues and trends affecting the business environment of 197 countries" (although the UN counts only 195), and it comes with a map. To summarise, the analysts find "a significant increase in conflict, terrorism and regime instability in MENA (Middle East and North Africa), along with intensifying political violence and resource nationalism in East Africa," plus "potential for societal unrest to exacerbate political instability ... in ... Bangladesh, Belarus, China, Kazakhstan, Saudi Arabia and Viet Nam. This is due to the erosion of democratic freedoms, increasing crackdowns on political opposition and the brutality by security forces towards protesters, compounded by rising food prices and worsening working conditions." Let's put the cork back in the Champagne.

Maybe we'll feel better if we look around our own back yard. Why does Thailand have more coups than anyone else? "Almost all coup attempts, successful or failed, occur in countries that are relatively poor and have political regimes that mix features of autocracy and democracy." I.e., countries like Thailand. So democracy looks a bit shaky in the Land of Smiles. How about Indonesia? Who will be Indonesia's next President? How about Burma/Myanmar? Will Suu Kyi make it through 2014 with her halo intact? Will Cambodia blow up, implode, and generally surprise us all? What about economic growth? Surely rapid growth is going to make our neighbours, and us, richer, happier, and more materialistic every year? In China, growth has rendered 3.33 million hectares of land too polluted to farm (that's 33k square kilometers, or half Tasmania). But fear not, for Japan has found the way to deal with pollution and homelessness too.

Any of that Champagne left?