In this week's featured commentary, SIIA Chairman Simon Tay writes about the gloomy outlook for Asia and the rest of the world in 2012. Is 2011 any better at year-end than it was at the start? How will the disruptions and developments of the year continue to play out in 2012? All this remains uncertain.
This commentary appeared in Today newspaper on 26 December, 2011.
History may judge this was the year when the 21st Century really began. Back in 2000, continuity seemed assured, with the United States consolidating power and primacy. One decade on, changes potentially upend the global balance.
The financial crisis that began in the West in late 2008 is entering a second and more dangerous phase. The euro zone shows up not only sovereign financial problems but also the difficulties in exercising collective leadership.
The US is not in acute crisis and its economy showed better demand in the last quarter of this year. But Washington DC is gridlocked - witness the failure to agree on ways to cut the budget deficit. From very different ends of the American spectrum, the Tea Party revolution and the Occupy Wall Street movement evidence a welling restiveness.
Across the Middle East, the Arab Spring has turned into a longer season of uncertainty. Some celebrate Muammar Gaddafi's end and call for resolution in Syria. But beyond old autocracies, the emerging concern is who will next govern, and how. With the landslide win for Islamist parties, Egypt's December poll brings that question into sharp focus.
How has Asia coped? Growth continued for most for much of the year. Some commentators have predicted that this is the time when the region will soon catch up and then surpass the West. The reality is more complex.
Asia is not unaffected. Markets are in tumult and economic growth rates across the region have been shaved. Prospects for next year are mixed, even for those like China and India with large domestic markets, let alone the smaller economies.
Politically, there is no Asian Spring. But governments across the region deal with new expectations from citizens. In erstwhile pariah state Myanmar, the newly installed government has freed political prisoners and will allow long detained Aung San Suu Kyi to contest elections. Thailand, Malaysia and Singapore too have seen changes that make for greater participation and more complex politics.
For established Asian democracies - Indonesia, the Philippines and India - the challenge goes beyond electoral issues. Demands in this past year have grown for governance that is less corrupt and more effective. Public protests and a number of high profile prosecutions result.
Outside of some copycat demonstrations, the Occupy Wall Street movement has not shown strength across Asian cities. But the political imperative from Singapore to Bangkok and Beijing is to close the stark gap between the Haves and Have Nots. Asset bubbles in housing and inflation in basics of food and energy have been testing governments to make growth more inclusive.
With its economy still running ahead, China has loomed larger this year in the expectations of others. Yet Chinese leaders grapple with many of these same issues, and on a much larger scale. External conditions are becoming more difficult, and domestic issues too.
Measures put in place to keep up growth have distorted the market with too much easy credit. With a dip in growth, social unrest is growing. With its upcoming leadership transition, China's rulers must do all they can to prevent an economic hard landing and shore up political legitimacy.
As the Chinese military builds up and a more assertive diplomacy is heard, however, acceptability is also an issue with near neighbours.
Global changes in this year have come quick and complex - a political, economic and social vortex. Asian states have not been immediately caught in that swirl. But they feel the pull more than many admit.
This shows up an on-going problem in the region's relationship to the global system. Despite economic growth, Asians are currently more influenced by global trends than being able to influence what happens. As the US and Europe weaken, gaps in global governance show.
Witness the G-20's current lack of coordination and the lack of success in the Doha trade talks. Even the acclaimed success in the year-end climate change meeting in Durban only starts off negotiations towards a later agreement and we should expect continuing differences.
The world at year-end is no better than it was at the start. Indeed, conditions - especially in the last quarter - have become increasingly difficult. Asians may make a New Year wish for the US and Europe to put their houses in order. But looking ahead, Asians must consider what they can and resolve to secure peace and prosperity for themselves and the wider global system.