Economy Global Globalization - a Result of Aviation Last updated 2019
Changes in History “The further backward you look, the further forward you can see”, said Winston Churchill. Europeans have conquered Earth and the white set up a system of colonialism and slavery. Condemning “Jewish” banking and free economy, Europeans were submitted to the sphere of “fatherland”. In England however, Adam Smith has proclaimed liberal commerce already in the 18th century and Great Britain became the global creditor. The Rothschild family founded banking-houses in Frankfurt, Paris, London, Vienna and Naples. Germany became a state in 1871, after the French-Prussian war had ended. A social security system was established chancellor Otto von Bismarck. But emperor Wilhelm II ousted him and in 1914 he started World War I with help of the Habsburg and the Ottoman empire. The ‘Entente’ between England, France and Russia got loans, regulated by American banker John Morgan. Europe lost leadership and the new powerhouse became the USA. The history was characterized by the Allies’ coup against the Tsar, followed by Lenin's revolution of 1917, and the rise of communism with forced atheism in the Soviet Union. Germany and Austria were defeated in 1918 and new borders were erected, disregarding the people’s native language. In 1929 came the international economic crisis, hyper inflation and famine in Germany, causing the election of Hitler, appointed tyrant and godlike idol in 1933, welcomed in Austria in 1938. Joined by Mussolini, Hitler started World War II in 1939 by conquering Poland and in 1941 he attacked Russia. In China, the Manchu dynasty had been ousted by Sun Yat-sen already in 1911-12. In 1931 Japan had occupied Manchuria, in 1937 it continued the war against China and in December 1941 it attacked mighty USA. Hitler, who has started Holocaust, and Japan were defeated in 1945 thanks to the USA under F.D. Roosevelt, the Soviet Union under Stalin and the persistence of Winston Churchill. After WWII the Europeans had to give away their colonies. The history continued with North Korea’s war, the nuclear arms race, the Cold War, the collapse of communism and Soviet Union in 1991. During the last decade of the 20th century, after Mikhail Gorbachev and Ronald Reagan had terminated the Cold War, the age of globalization advanced, including China, India and billions of people from the "emerging markets", causing a rise in productivity. In the first years of the 21st century the total GDP (the annual Gross Domestic Product) global has surpassed $40 trillion and it continued to rise. After the first decade (e.g. in 2013) the GDP(PPP), the concept of purchasing power, was reported via Wikipedia: USA $16.8 trillion, European Union EU (beyond the euro zone) $16.3 trillion and China $13.4 trillion. United Nations After World War I, in 1920, the old nations tried a League of Nations, unsuccessfully. The UN (United Nations) organization was envisioned by U.S. President Franklin Delano Roosevelt under Soviet cooperation from 1943, constituted in June 1945 in San Francisco, initially comprising 50 states. With the UN, the Global Economic Multilaterals were conceived, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO) being of special importance for the economy. The International Civil Aviation Organization (ICAO) was created as PICAO on Dec07, 1944, then constituted as an institution of the UN. The UN became financed by the almost 200 member states, and bailouts by the IMF became a rescue for many countries, not all of them listed here. But it is not (yet?) the global government, proposed by Albert Einstein, the ‘father’ of modern physics.
United States and NAFTA The USA under George Washington became in 1789 one of the first modern democracies. Before WWI the Presidents Theodore Roosevelt and William Taft combated the trust monopolies. In 1933 President Franklin Delano Roosevelt conceived the “New Deal” in order to terminate the economic crisis. The USA demonstrated ‘free market’ economy last not least in air transport – see the chapter Air Traffic - while other countries concentrated on one subsidized flag carrier. The sad end of iconic Pan American World Airways in 1991 was a result of liberated economy. The USA started the European Recovery Program (ERP) in 1948 and founded the military alliances NATO (North Atlantic Treaty Organization) in 1949 and SEATO (South East Asia Treaty Organization) in 1954. After the US dollar was delinked from gold, it became the leading currency. Compared to the British pound, $4 was the equivalent in 1948 and $1.3 seventy years later. In the 1970s president Carter introduced a still more liberal economic policy on international level, including "Open Skies" for aviation. During the last quarter of the 20th century and mainly after the end of the Cold War, international capital flows loosened, boosting global income. Under president Clinton the USA strengthened in 1994 its economic position with NAFTA (the North American Free Trade Agreement) between USA, Canada and Mexico, which has overcome a crisis after the Partido Revolucionario had lost absolute majority in 1997. NAFTA comprised (e.g. in 2013) some 469 million people. “Trade between the three has more than tripled, to $1.1 trillion in 2013”, has reported The Economist. The USA defeated racism, demonstrated with the election of Barack Obama for becoming president in 2009. The US economy advanced in the 90s and unemployment rate has fallen temporarily below 4% with an improve in productivity and without inflation, a result of the Federal Reserve policy under Alan Greenspan. At the beginning of the 21st century, the USA was the global leader in GDP with roughly $10 trillion, but in export China was leading. And the euro currency temporarily leapt ahead of the dollar. In 2008 the USA suffered a new cost item: subsidizing mismanaged financial markets. The collapse of Lehman Brothers investment bank had marked the beginning of the crisis. The Obama government set stronger rules. And in the airline business (within statistics published by Der Spiegel 29/ 2015, based on Bloomberg, Reuters, Thomson), the global leader by assets was Delta Air Lines, followed by American Airlines, then the traffic leader, and by United Airlines. They had been saved by ‘Chapter 11’ insolvency protection. In 2016 Financial Times (July08) warned of Republican politics “ripping up US trade pacts such as the North American Free Trade Agreement”, quoting IMF boss lady Christine Lagarde: “The antitrade politics championed by Republican presidential candidate Donald Trump risk sparking a dangerous protectionist movement …” In 2017 Trump became president, later he moderated his struggle for building the ‘Great Wall’ and he confirmed to continue the cooperation with Mexico. The CIA, FBI and NSA were always security forces in the background. Nevertheless Donald Trump defended the unlimited freedom of arms, causing innumerable victims. Despite all the uncertainties, the USA had maintained its position as the leader in economy. More than half the money for global stocks, bonds and other debts was raised in the USA. Apple was described (by Welt, March05, 2017) being the biggest trust, followed by Google and Microsoft, ExxonMobil of the energy sector occupying rank 7 and JPMorgan on the money-market ranking number 9 global. Mentioning the many short-term value creators, Financial Times (April17, 2018) listed the durable ones – the biggest “being IBM (35 years in the top five), General Electric (26 years), General Motors (24 years), Altria (23 years) and ExxonMobil (16 years).” Among the top petroleum sector holdings global, Royal Dutch Shell was listed in 2017 occupying rank 1, followed by ExxonMobil, Chevron and BP. The USA became the leader in technology. In 1961 president John F. Kennedy has announced America’s moon landing “before this decade is out”, and on June21, 1969 it came true thanks to NASA and Wernher von Braun. The US authorities revolutionized information technology, accessible to everybody: “The Internet protocol suite resulted from research and development conducted by the DARPA in the early 1970s”, so reported via Wikipedia, continuing: “In 1982 the Internet protocol suite was standardized, and consequently, the concept of a worldwide network of interconnected TCP/IP networks, called the Internet, was introduced.” In 2010 already 2 billion people, almost 1/3 of Earth’s population, were estimated being in some contact with the internet.
Europe With a transatlantic economy of $3 trillion and then even more, North America became tied more closely to Europe than to any other region. And Europe is dependent on military protection by the USA and Nato. After WWII, Europe was split up between the victorious superpowers. In divided Germany, the Western allies’ zones got the new currency D-Mark in 1948. Separate states were constituted in 1949, the East being the Soviets’ “DDR” (GDR). Separate successors of Lufthansa started in 1955 – see the chapter Air Traffic. In Portugal dictator Dr. Salazar was deposed in 1974 and troubles hit also TAP flights. A socialist interlude was unsuccessful, but led to liberation of colonies. The last dictator in Western Europe was Franco, who at least had saved Spain from participating in WWII. He deceased in 1975. Germany’s first chancellor Konrad Adenauer has brought about friendship with French president Charles de Gaulle, and Willy Brandt reconciled Germany with Poland. The principle of “Soziale Marktwirtschaft” by conservative Ludwig Erhard gave Germany stability in economy. The British economy, hit by the labor unions, was saved by Margaret Thatcher after her election in 1979. Her politics were symbolized by privatization of British Airways in 1987. France and England proved able to build the only commercially usable supersonic aircraft, the Concorde. There is the opinion that without the Concorde, Airbus as the competitor of USA’s Boeing would not have emerged. The Financial Times mentioned (e.g. in 2018) that the French and German governments held over 11 percent each in Airbus shares. By traffic RPK (revenue passenger kilometers) British Airways, Air France and Lufthansa maintained their leading position in Europe, menaced however by the unlimited freedom of strike. Eastern Europe was paralyzed by Soviet communism and "satellite” dictatorships, by mass imprisonment and by bloody knock-down of upheavals. The standard of living in the communist “DDR” has been considered 1/3 compared to West Germany and therefore the East built the Berlin Wall in 1961 and mined the borders, preventing people from fleeing. In Poland communism was combated by labor unions, led since 1980 by L. Valesa, from 1990 president. In Czechia, the change was symbolized by Vaclav Havel, who became president in 1989. Eastern Europe remained partitioned from the West until 1989's economic collapse of the Soviet Union. George Bush senior and Mikhail Gorbachev have made possible Germany’s reunification in 1990. With the election of chancellor Helmut Kohl and minister Wolfgang Schaeuble and with their currency exchange equalization, the East was integrated. The Baltic states were granted independence from Russia. Slovakia separated from Czechia peacefully in 1993. In Yugoslavia, communist dictator Tito had not surrendered to the Soviets and so they excluded Yugoslavia from their Kominform in 1948. Yugoslavia has recovered with US credits already before Tito’s decease in 1980. Nevertheless the economy stagnated and provinces separated in 1991, leading to wars.
A political unification of Europe had been on the agenda since 1949. The European Free Trade Agreement (EFTA) was realized in the 60s. The European Union (EU) was founded with the Maastricht treaty of 1992 as a commercial alliance, stretching from Ireland to Greece. In 1995 Sweden, Finland and Austria joined the EU. Iceland, Norway and traditionally neutral Switzerland stayed away. For Norway, its oil fund of $970 billion e.g. in 2018 may have been the reason. In contrast, the once Soviet-dominated European states joined the EU one-by-one. The rising number of tiny states was an additional argument for uniting the sub-continent. In 1999 eleven countries decided for the euro, becoming in 2002 the official currency in 12, later more selected countries and the unofficial currency in others. Before, some economies had a two-digit inflation rate. Among the EU members staying outside the euro zone were the UK, Sweden, Denmark and certain Eastern states. Border controls were abolished between countries which have signed the Schengen Agreement, comprising also formerly communist states, but not the UK. Economic growth was supported by interregional trade growth from 54% to 64% between 1992 and 2003. In 2003 the EU decided to include the Baltic states, Romania and (South) Cyprus, thus encompassing almost half a billion citizens. For the Baltic region, the biggest lenders were Nordea and Danske Bank. Cyprus had been divided in 1975. Though the south voted against the conditions for reunification, Northern Cyprus was not recognized by the UN. The EU was entered by Bulgaria in 2007, Croatia in 2013 and other nations were eager to join Europe. Albania, impoverished since the past of ultra-communist dictator Enver Hoxha, achieved reforms in 1990. OECD statistics of 2009 registered for the EU countries a GDP of $15.7 trillion, surpassing the USA’s GDP of $14 trillion in that year. And in 2018 it climbed to almost $20 trillion, contributing 24.6% of global GDP. In that year the EU comprised 28 countries, and EU candidates at that time were former Yugoslavian countries and later Albania. For the loose European Single Market, encompassing the EU member states, an extension with Iceland, Norway and treaties with Switzerland were estimated. Iceland, symbolized by its newcomer airlines, had to be saved from bankruptcy in 2008. At the end of the first decade the debt burdens of Ireland, Portugal, Spain, Italy and Greece provoked Eurosceptics. German chancellor Angela Merkel, French president Nicolas Sarkozy and Christine Lagarde of the IMF led a euro-zone rescue package by IMF, European Commission and European Central Bank (ECB), seeking balanced budgets without inflation. Southern Cyprus had become a paradise for tax evaders from Russia, but in 2013 it was protected from bankruptcy. In 2015 flag carrier Cyprus Airways had to stop, but Cyprus recovered. A “Grexit” could not fulfill the International New York Times (July28, 2015) prediction that “The Greek deal could destroy the euro”, for Greece contributed less than 3% to Europe’s GDP. Against political initiatives, the Greek voted for being saved by the euro rescue. The debt burden of certain countries was overshadowed by the deficit of Italy, the euro zone’s third-largest economy. In 2018 Italy’s rising bond yields may have dampened pessimism, but the growing debt under the populist government was criticized by the European Commission. Flag carrier Alitalia had been rescued by the Sheikh of Abu Dhabi and was sold after insolvency. Financial Times (Aug02, 2017) reported: “The sale, managed by bankers at Rothschild, will be open to bidders of all nationalities”. Until October 2018, the deadline, only the government-controlled railway FS had made an offer – see the chapter Air Traffic/ Mega Groups. Portugal under socialism had come on the brink of bankruptcy in 2011 and was saved by the IMF, EU and ECB. After a socialist victory in 2015, risky privatization of loss-making flag carrier TAP was moderated. In Spain after 2016 the economy advanced, but then the government was confronted with a Catalan separatists’ minority, hitting Barcelona’s economy. The national debt compared to GDP was listed in 2018 for Portugal with 124%, Spain 96%, France 96% and Italy 130%, showing the urgency of reform measures, concerning last not least Air France and rationalized Alitalia. Greece is dependent on an extension of the maturity of old c.100 billion euro bailout loans, concluded in 2018. The euro has bewared its status as one of the leading currencies global, despite certain dangers: Germany was marked by closing down nuclear power stations, the reason why the expense for additional energy import had risen by 23% within one year (Focus, 2012). 35% of the EU oil imports and 30% of gas imports were coming from Russia (Spiegel, Sep01, 2014). Germany’s debt per GDP has risen to 80.9% by 2010, towards 2018 lowered to 61%, almost fulfilling the EU target of 60%. Troubled Deutsche Bank was entered by the HNA Group of China, and Frankfurter Allgemeine (April01, 2018) mentioned also “the second shareholder, the ruling family of Qatar…” France has voted in 2017 for president Emmanuel Macron, despite Russian cyber attempts. He promoted reforms in France, combated by ‘gilets jaunes’ radicals. Together with German chancellor Angela Merkel, he concluded in 2019 a tightened cooperation. Almost half of the global economy was estimated coming from the USA and the EU. So, logically the USA under president Obama targeted the Transatlantic Trade and Investment Partnership TTIP, estimated to add $50 billion a year (according to Intl. Herald Tribune, Jan28, 2013) also to the US economy. But when Donald Trump took office, he cut off trade talks. In 2018 however, he met Jean-Claude Juncker of the European Commission and agreed on cooperation. In the UK, conservative David Cameron had surprised by announcing a plebiscite about EU membership for winning influence, though 48% of UK exports (e.g. in 2018) went to the EU. Donald Trump promoted the ‘Brexit’ and on June23, 2016 a tiny majority of 52%, not the majority of the electorate, voted for leaving the EU, to be organized within three years. Prime minister Cameron retreated, disappointed. Successor Theresa May was confronted with the long-term risk of lowering the GDP by up to 8% (so estimated by the IMF) in the case of a ‘no-deal Brexit’. Logically, a ‘soft Brexit’ became May’s target, after accords were achieved with the EU, concerning also Gibraltar. But in January 2019, the ‘House of Commons’ rejected it. According to a tv report (HD, Jan22, 2019), Irish registered Ryanair was only with 49% held by investors from true EU countries and it wanted to shift British shareholders to a Ryanair UK. For the IAG of British Airways, Iberia and Aer Lingus of Ireland, the British majority interest was considered a problem – see the chapter Air Traffic/ Mega Groups.
. Soviet Union (USSR) and Russia The communist Soviet Union was stabilized in 1922 after the end of civil war as a result of Lenin’s revolution of October 1917. After Lenin’s decease in 1924, Stalin became his successor. He did not follow Trotzki’s creed of spreading communism worldwide. The share of industrial production in GNP rose from roughly 1/3 to 2/3, but in 1928 the free trade (“nep”) was stopped. Aviation came under state control and in 1932 Aeroflot got the monopoly under communism. Stalin eradicated roughly 10 million Russians and others before WWII. Then the USSR withstood invasion and Hitler's planned extermination of 30 million Russians. With WWII, the Baltic countries, Moldova and Koenigsberg (renamed Kaliningrad) were annexed. After the war the USSR became the second strategic superpower, like the USA with a nuclear doomsday capability, dominating the region from Eastern Europe to submitted Mongolia. Stalin died in 1953, followed and criticized by Khrushchev. With the Cuba crisis of 1962, he provoked almost the nuclear world war. While the USA achieved already in 1950 a GDP of $1.5 trillion, the Soviet Union’s annual GDP was still at the end of the 80s only about $0.4 trillion. And despite this poor background, Cuba had to be subsidized and Afghanistan was conquered. The Soviets’ unproductive communist system suffered the economic collapse, partly under the burden of disproportionate military spending on technology development, hidden from the open market. Gorbachev launched the perestroika reforms in 1985 and ended the Cold War. In August 1991 he was put under house arrest and on Dec25, 1991 the Soviet Union was dissolved. Eastern Europe was liberated. Mongolia got rid of Soviet military dominance and in 1992 the Republic Mongolia was constituted. Boris Yeltsin peacefully liberated Russia and its neighbors from communism - without civil war. Nevertheless after the Soviet demise, the Russian Federation stretched from Europe to the Pacific, with c.145 million inhabitants. Aeroflot, in the early jet age ranking number 1 global, was split up and occupied in the year 2000 just rank 41 by passenger kilometers. In the Russian federation, 30% of state-owned business was "privatized" - sold off 'dirt cheap' for $1.2 billion. New owners had to be “roofed over” by gangs. According to a TV report (by Arte), around thousand killing gangs existed in the 90s. GDP shrank by 50% and the efficient social system collapsed. The bank crisis of 1998 hit also airlines. Vladimir Putin, elected president in 2000, changed things by fighting a corrupt new oligarchy. In 2003 Newsweek wrote that the owner of oil giant Yukos has been arrested at Novosibirsk airport, as America’s “Exxon Mobil is reportedly considering a merger with Yukos, worth as much as $25 billion”, and in 2004 Yukos was taken over mainly by the state-owned Rosneft. About the backgrounds of Russian industry, Newsweek has written in 2006 that “… siloviki clansmen have taken over large junks of Russia’s economy, including most of the Yukos oil company as well as the auto and aerospace industries.” The “siloviki” fraction of FSB (the Federal Security Service) was described as having become too powerful and Putin “was trimming the balance of power at the top of Russia’s most influential ministries.” In 2006 president Putin’s command for uniting the Russian aircraft industry was published, to be formed as UAC (United Aircraft Corp., or OAK in Russian spelling) under MiG boss Alexei Fedorov. Russia is the second-largest oil producer behind Saudi Arabia, Rosneft being its leader, followed by Lukoil. Rosneft boss Setchin’s relations to Putin’s former office were pointed out and also German ex-chancellor Schroeder’s position with Rosneft. President Putin has set plans to double GDP in 10 years, mainly by export of oil and gas. In 2013 Russia was reported with a GDP(PPP) of $2.6 trillion, ranking number 6 global. But with temporarily falling oil prices, the economy moved from surplus to deficit. By late 2014 the value of the ruble against the dollar has dropped by more than 40%. About Russian banking, Financial Times informed: “Regulators have shut down more than 300 banks since Elvira Nabiullina became governor of the central bank in 2013, promising to clean up the sector.” In 2018 it informed. “Sberbank reported a 22% year-on-year increase in net income for the final quarter of 2017, as Russia’s largest lender profited from its dominant position. For president Putin’s Aeroflot ambitions see the chapter Air Traffic/ Mega Groups. Putin has concluded in 2009 a trade agreement with China. And he announced also an additional military spending equivalent to 580 billion euro during ten years, whereupon experts doubted if it can be financed by oil and gas exports. Rosatom supplied enriched uranium to the USA and titanium exports were essential for Boeing – menaced by US sanctions. And in 2018 Russia and Germany confirmed to build the second pipeline beneath the Baltic Sea, the ‘Nord Stream 2’, opposed by Donald Trump.
Russia’s Neighbors The former Soviet “republics” were liberated within the Commonwealth of Independent States, confirmed in December 1991. For all these CIS countries, Putin proposed a new "Common Economic Space". It could have become a powerhouse in economy, but war-mongering in certain CIS countries prevented it. Moldova has voted in 1994 against reunification with Romania, it suffered under poverty, nevertheless flag carrier Air Moldova survived. CIS member Ukraine under Yulia Tymoshenko showed ambitions for the EU, in 2011 she was imprisoned, revolts were the result and in 2014 president Yanukovich fled to Moscow and the $3 billion financial assistance by Russia was to become a matter of disputes. A private Ukrainean Aviation Group (UAG) had been formed, according to LJ (Jan 2013) its owner Kolomoisky was close to Tymoshenko, and UAG had to give away routes to state-controlled Ukraine International Airlines. Still in summer 2012 one of Kolomoisky’s planes was watched sporting a great EU title. Igor Kolomoisky (according to globalresearch, Aug10, 2014) “was appointed by the coup regime to be governor of the southeastern Dnipropetrovsk Region”, but then he left. The Russian-populated Crimea, incorporated into Ukraine in 1954, voted for Russia, and in 2014 Putin’s troops were welcomed on the peninsula. Belarus under ruler Lukashenko maintained peace. In 2013 Armenia evaluated a customs union with Russia, existing already between Russia, Belarus and Kazakhstan. But in 2018 impoverished Armenia showed problems. Georgia with troubled provinces had joined CIS in 1993/94. And the war of Georgia in 2008 had been eagerly watched by "cold warriors" in the West. Then Georgia recovered from war and peaceful oligarch Ivanishvili was reported by Financial Times (Sept14, 2018) with a net worth of $4.6 billion, almost a third of Georgia’s GDP. In 2017 the EU offered commercial cooperation with CIS countries, strictly excluding membership. Turkey, Mideast and Maghreb After the defeat of the Ottoman Empire on the side of the German emperor during WWI, Britain, France and Russia tried to divide up the state. In 1922 the Greek were expelled. The Turkish Petroleum Company later was entered with a 50% share by the Anglo-Persian Oil Co. But in 1923 Kemal Pasha Ataturk established the state of Turkey. He even introduced readable Latin orthography – a step other countries were unable to do. Since the Cold War, Turkey was a Nato partner of fundamental strategic importance. The economy was liberated in the 80s under Turgut Ozal and Turkey achieved remarkable growth rates in the 21st century – 10% e.g. in 2010. And under prime minister Erdogan the country started negotiations for EU membership in 2005. Istanbul with its 17 million inhabitants became an air traffic center and Turkish Airlines has claimed to be Europe's fastest growing carrier. But terror and temporary hostilities had led to a 35% fall in tourism and in late 2016 around 40 Turkish Airlines planes stayed grounded. On July15, 2016 some military forces tried to overthrow Erdogan. In March 2017 Dutch authorities prevented the plane of the Turkish foreign secretary from landing – but Erdogan won his referendum. And in 2018 the lira currency has lost roughly 40% of its value, to be combated by an increase in interest rates. Turkey got a $15 billion investment from Qatar and in 2018 the Turkish state received the Boeing 747-8 VQ-BSDK as a present from Dakar, according to LJ the VIP plane of the Emir’s grandfather. Nevertheless an IMF bailout has not been excluded. Arabs side by side with Israeli have opposed the colonial powers, until in 1948 Israel was founded and immediately conflicts were started by neighbors. Egyptian ruler el-Nasser and later Saddam Hussein of Iraq tried to extend their territories and so the Middle East was strangled by wars, consequently showing during decades world's second lowest growth rates. Israel developed a higher standard of living. In Syria the al-Assad dynasty targeted forcibly to maintain stability. The Iraq Petroleum Co. was nationalized by Saddam Hussein. Iran was ruled by Shah Mohammed Reza Pahlevi. In the 50s president Mossadeq caused controversy with his intention of nationalizing the Anglo-Iranian Petroleum Co. and in 1953 he was ousted with Western help. In 1978 strikes against Iran Air illustrated problems. Then women lost their rights in 1979 with the revolution of Ayatollah Ruholla Khomeini, pushing Iran outside the CENTO military agreement with the USA. Thus the Soviets could conquer neighboring Afghanistan after they had ousted the progressive president Daoud in 1978. But in 1989 the Russians left, leading to the advance of Al-Qaeda and to the Afghanistan War in 2001. Iran’s economy became strangled by the Islamic Revolutionary Guards. Its nuclear weapons program and president Ahmadinejad’s announcement to “map off” Israel has become the main threat to peace. In 2012 the EU countries in accordance with the USA concluded an oil embargo on Iran, in 2013 the ruling Shi’ite Supreme Leader Ali Hosseini Khamenei understood that the yield from oil exports has shrunk by 40%, Iran had inflation, poverty and in 2015 an agreement was concluded for interrupting its nuclear weapons program. Demonstrations against theocracy were tolerated by the elected president Rouhani. But Shi’ite spending of $25 billion for Mideast armaments led to renewed sanctions by the USA. And Iran’s air force commander Azis Nasirzadeh said: “We are filled with impatience to wipe out the Zionist government from Earth” (translated from Juedische Allgemeine, Jan24, 2019) – see the chapter The Flight/ Conflicts. Syria and Iraq were driven into poverty by IS rebels’ bloody mass killing and 6 million people were estimated having fled from Syria. Russian intervention was victorious. Yemen had been reunited, but then Shi’ite Houthi rebels’ civil war caused famine and epidemics. On the Arabian peninsula, already in the 18th century Abd ul Wahhab had established a national Islamic sect. After WWI and officially in 1932 the state became the kingdom of Saudi Arabia, conservative, excluding women from traveling unaccompanied. Under Abd el Asis III ibn Saud, it exploited the oil resources in cooperation with the USA, marked by founding Aramco in 1933. The economies from the Gulf to Saudi Arabia have doubled in the 70s within five years thanks to the OPEC cartel for oil exports. OPEC had been concluded in 1960 by Mideast countries and Venezuela, then joined by Indonesia, Libya, Algeria, Nigeria and temporarily also by Ecuador and Gabon. The Sunnite kingdom of Saudi Arabia maintained stability in Earth’s most oil-rich region. The Guardian Weekly reported about the planned initial public offering of Saudi Aramco: “If it goes ahead of the $2 trillion valuation hung on it by crown prince Mohammed bin Salman it will raise $100 billion on global markets. On Nov08, 2017 Neue Zurcher Zeitung wrote: “In the noble Ritz-Carlton in Riyadh (…) are sitting now dozens of Saudi princes, billionaires, security guards and politicians, assembled by officials of the new anti-corruption commission.” Security forces have prevented the rich from “fleeing with their private jets.” But the planned privatization of Aramco was stopped in 2018. Mohammed bin Salman’s father King Salman kept still power. Success was demonstrated by the United Arab Emirates (UAE), founded in 1971 by Sheikh Zayed after the British had left, while Bahrain, Qatar and Oman are separate states. In 1981 the Gulf Cooperation (GCC) was concluded by Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE. The ruling Sheikh Khalifa of Abu Dhabi, Al Maktoum of Dubai and Sultan Qabooz of Oman have built up a prospering economy with an efficient social system and women got their rights. In 2009 the media exposed the debt burden of the holding Dubai World, but the economy continued to be backed by Sheikh Khalifa. As far as air transport is concerned, the analyst Howard Rubel has pointed out that the UAE economies “are the fastest growing in the world. So what do they do? They buy planes” – see Emirates Airline, Etihad Airways and Qatar Airways. Hope had arisen also for the countries situated between Arabia and the Maghreb, the MENA markets. Egypt Air was an important airline, but Algeria after liberation in 1962 had become a terrorists’ refuge. A multi-national Air Maghreb, around 1974 evaluated by the governments of Morocco, Algeria and Tunisia, remained a dream. In Libya the king was ousted in 1969 by dictator al-Qadhafi, who nationalized the oil industry. Egypt’s dictator Mohammed Hosni Mubarak, who has got back the Sinai, signed in 1982 a commercial integrations chart with ruler Numeiri of Sudan, which had got independence in 1956. The Comets of Sudan Airways had been a symbol of British cooperation. South Sudan got independence in 2011, but it was hit by troubles and the North lost oil resources. In the same year 2011 Egypt’s peaceful ruler Mubarak was ousted and raging terrorism caused a substantial loss in tourism, the country’s most important income. With the coup of 2013, General el-Sisi tried to re-establish stability, finally accepted by the USA, which over years had put $80 billion into Egypt (New York Times, July28, 2018). Libya tumbled into civil war for oil. In Tunisia, troubles hit Tunisair towards 2011. At that time, only Morocco maintained stability, its economy being controlled by the kingdom, symbolized by Royal Air Maroc.
Japan and the ‘Tigers’ The Asia-Pacific region’s growth had been initiated by Japan, democratized after defeat in 1945 by the US military administration under General MacArthur. Japan became the leader in economy, initially under strict rules in accordance with Japanese tradition. In the 80s the market was liberated, Japan became the most important creditor nation, but in the 90s came the crisis and a collapse had to be prevented. Japan was now the highest indebted industrialized nation. Nevertheless at the turn of the century, Japan Airlines was still for a few years the leader in the Asia-Pacific region and Japan’s economy achieved a GDP of $4.9 trillion (according to World Bank statistics of 2009). “But uncertainty about future energy supply is fuelling fears of an acceleration of the exodus of manufacturing to China and elsewhere”, wrote the Financial Times in 2011 after the Fukushima accident. The “energy imports have pushed the trade balance into the red”, warned The Economist in 2012. In the case of a crisis, the tsunami disaster could have been used as an excuse, but the damage was estimated (by RE Munich) at $380 billion, less than 10% of the annual GDP. Under the new government by Shinzo Abe, in 2017 a growth of Japan’s economy was reported for the first time since 2005, but the debt burden remained a problem. Economic growth had got new participants - the "Economic Tigers": Hong Kong (British until 1997), Taiwan and South Korea, both recovered from Japanese occupation during half a century. South Korea survived the communists’ war of 1950-53. Its state-owned Korean Air Lines was sold in 1969 to the Hanjin Group, becoming Korean Airways, then Korean Air. And anger arose at the power of families that control the ‘chaebol’, or conglomerates. Singapore separated from Malaysia in 1965 and its economic success became symbolized by Singapore Airlines. The “Tigers” were followed by the "Little Tigers" Malaysia, Singapore, Thailand, then also Indonesia (with 1/4 billion inhabitants), joined by Vietnam. After the superpowers’ Vietnam war had ended, the country was reunited in 1976 under communist Ho Chi Minh. Decades later, politics have opened the market, but inflation appeared. Indonesia’s tourism was hit by the jihadists’ Bali massacre in 2002. The Association of Southeast Asian Nations (ASEAN) had been created already in 1967 for bringing about economic growth, followed in 1997 by ASEAN Plus Three, comprising also China and Japan. The Asia-Pacific Economic Corporation (APEC) of 1989, initially a forum of 21 countries, has reduced trade barriers and had targeted to limit China’s superiority. South Korea has arranged free trade with the USA and Europe. Burma, until 1948 British, has become stagnating Myanmar, ruled rigorously. In the 21st century it opened its market, last not least in aviation. At the same time Indonesia was reported being interested in a trade pact with China. Taiwan, separated from Mao’s communism in 1949 under Chiang Kai-shek, developed much faster than other countries. Finally in 2008 direct flights from Taiwan were allowed to enter mainland China, after an economic cooperation had started. North Korea, under the communist Kim dynasty impoverished and producing nukes, started some commerce. Well-informed A. Lankow reported (translated from Geo 12/2017): “In the past year one could observe the advance of a new caste of dealers, the ‘Don-ju’, that means ‘masters of money’. For all the dangers see the chapter The Flight/ Conflicts. A Trans Pacific Partnership (TPP) agreement was pushed forward initially by Singapore, Brunei, New Zealand and Chile (!). A proposed Free Trade Area of the Asia Pacific (FTAAP) has come in the limelight when in 2011 president Obama strove for US partnership. Japan had tied itself to China by sharing production, Taiwan prospered in this way and for South Korea, China has become its biggest export market. In 2015 the TPP was signed on principle by the USA, Canada, Mexico, Chile, Peru, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia and New Zealand. It was considered concerning 40% of the global trade, but US president Trump rejected the TPP and APEC. The TPP was replaced by the CPTPP, signed in 2018 by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam (according to Wikipedia). It contributed 13.4% to the GDP global. In 2019 Japan’s prime minister Shinzo Abe and Angela Merkel concluded a Free Trade Agreement with the EU. Superpower China During WWII, Chiang Kai-shek had maintained a Chinese territory with the capital Chongqing, not conquered by the Japanese. In 1949 communists under Mao Zedong were victorious and Chiang Kai-shek had to flee to Taiwan. Under communist leader Mao, China with 1.3 billion people got a social system, but had to bear decades of dictatorship, economy was hampered by stagnation, and many millions of people were estimated having lost their life. Around 1960 the political tensions with the Soviet Union became evident and in the late 60s Mao’s “cultural revolution” tried to destroy China’s historic culture. Facing the Soviet-supported Vietnam War, U.S. President Nixon initiated friendlier relations when he arrived in 1972 at Beijing airport. After Mao’s decease in 1976, China under Deng Xiaoping terminated decades of isolation, and economic reforms had been initiated by Zhao Ziyang. Even after the Tiananmen drama the new policy and also the “communist” one-party rule continued. For the control of its three largest airline groups around Air China, China Southern and China Eastern see the chapter Air Traffic/ Mega Groups. China's goal was to become the second largest economy (by country) and it achieved this status. A majority of producers is privately-owned, while important banks and significant money transfer were kept under government control. In accordance with the existing treaty, the formerly British crown colony Hong Kong became a part of China in 1997, followed in 1999 by ex-Portuguese Macao, both as ‘special administrative regions’. With the Hong Kong dollar, an “offshore” market had been opened. However, when in Hong Kong protests were tolerated in 2014, the Chinese party’s ‘People’s Daily’ warned of consequences towards Hong Kong’s economy. Delinking the yuan (or renminbi) from the US dollar in 2005 (temporarily retrograded) was a step forward. Around 2006 Ma Kai, the chief economic planner, undertook to raise private consumption from the low level of 50% closer to the international norm of 65%. In 2013 the ruling party KPCh released a blueprint “transforming China from an old model of high growth, based on low-wage, labor-intensive manufacturing for export (…) to a new model accepting lower, sustainable growth rates based on expanding domestic consumption” (so stated by Kevin Rudd, a former prime minister of Australia, in New York Times, March21, 2018). In 2017 already 731 million Chinese were registered being Internet users. And Financial Times (April28, 2017) has stated: “Alibaba’s four-year old Yu’e Bao fund leaps towards top of global ladder.” On the smartphone market, Huawai leapt to position 2 global in 2018, ahead of Apple. The World Bank statistics showed for 2008 a GDP of $4.3 trillion and within five years the GDP doubled. In 2011 Aerospace America wrote: “To rebalance the economy, prime minister Wen Jiaobao has set a target of economic growth of 7% per year for 2011-15, against a figure of 11% for the past five years.” China’s monetary reserves have risen in 2011 by 30% to $3.2 trillion. In 2016 the International New York Times stated: “Now, China sees the renminbi as an instrument of its growing power (…) when the IMF formally added (it) to its basket of reserve currencies, a move that lumps it in with the dollar, the pound, the euro and the yen.” China’s BRI initiative, presented in 2013, envisaged global infrastructure projects worth $1 trillion. ‘Belt and Road’ is to comprise a strange way to Europe, to be financed not only by the China Development Bank (CDB). Russia has become a big recipient of BRI investment – so why not to take the Trans-Siberian railway? Container shipping is cheaper… In 2016 Frankfurter Allgemeine published the intention of reducing Chinese investment actions in foreign countries, in consideration of a rise in those expenditures by 50%. In 2018 The New York Times (July02) quoted Hu Xiaolian, the chairwoman of the Export-Import Bank of China, warning: “Our enterprises and Belt and Road Initiative countries will face financing difficulties.” Flashy has become the HNA Group, emerged out of Hainan Airlines (see Air Traffic/ Mega Groups), initially participated by George Soros, who was described (by Financial Times) having been the “investor, who famously made $1 billion betting against the pound in 1992.” Flight Intl (Jan01, 2019) reported: “A CNY7.5 billion ($1.1 billion) facility recently announced by Hainan is a sign that Beijing is again allowing policy banks to loan to HNA companies (…). Nevertheless Beijing’s move to nationalize another struggling conglomerate – Anbang Insurance Group – could set a precedent for a similar fate for HNA…” Under ruling party boss Xi Jinping, Yi Gang became the governor of the People’s Bank of China, its central bank, and politics signaled companies that they must stop risky borrowing. For the Regional Comprehensive Economic Partnership (RCEP), disputes had started in 2013, to be concluded by China, the 10 ASEAN partners plus Japan, South Korea, India, Australia, New Zealand, to contribute 31% of the global GDP. And in 2018 the Philippines’ ruler Duterte opened contacts with China. Concerning China’s response to Donald Trump’s extreme tariffs, Financial Times (June19, 2018) informed: “Beijing, meanwhile, removed aircraft from its list, a boon for Boeing (for) the tariffs would have handed more pricing power to Europe’s Airbus…” In 2019 Financial Times reported a January speech by president Xi Jinping, “in which he reiterated the ‘One Country, Two Systems’ mantra as the way forward for Taiwan.” But Taiwan’s president lady Tsai Ing-wen refuted, facing elections in 2020. According to the U.S. National Science Foundation, Asia’s share in high-tech exports has risen from 7% to 25% within two decades. However, China could profit from the expensive researches and developments America, Europe and Japan have undertaken during decades – a fact pointed out already by Alan Greenspan. China advanced in technology and in 2011 Financial Times wrote: “Much of the surviving demand for nuclear plants is likely to come from emerging countries such as China and India, where the need for electricity is growing quickly and governments appear to have been less rattled by the events in Fukushima.” In the second half of the 20th century already, China has become the military superpower number three and in 2003 it had its first manned space mission.
Indian Subcontinent India with its steadily growing population, surpassing the official number of 1.1 billion, lacked far behind the Asian “Tigers”. The country had been liberated from colonialism after WWII mainly by the peaceful initiative of Mohandas Karamchand Gandhi, the Mahatma. Inhabited by Hindu and Muslim, India suffered under genocide attacks and was split up in 1947, against the intentions of Gandhi, who was murdered in 1948. In liberated India, Jawaharlal Nehru was the elected prime minister from 1947 until his decease in 1964. He targeted neutral politics, but the next wars with Pakistan in 1965 and 1971 made India one of the nations with the lowest per-capita income and people could be seen dying on the sidewalk. Under Indira Gandhi, Nehru’s daughter, the most important banks were nationalized in 1969. And the traditional caste system was an additional horror. Though India is democratic, the Soviet Union had been chosen as its major business partner, manifested by the treaty of 1971. After the Soviets’ economic collapse in 1991, India was no longer credit-worthy and only drastic reforms could prevent a total breakdown. Headed by Manmohan Singh, India changed policy and opened up to a global market, then achieving an unprecedented growth, but horrible poverty had not yet disappeared. And Air India had to be state-owned. The USA and Europe became India’s most important trading partners, and in 2003 a treaty with ASEAN was concluded. Not even the global slowdown of 2008 could stop the growth rate, climbing in 2010 beyond 8%. Old dangers of bureaucracy still existed, state-owned Air India was around the turn of the century not yet among the top-50, and the spectacular collapse of Kingfisher Airlines in early 2012 signaled new dangers. In 2017 the Reserve Bank RBI has moderated its full-year growth forecast to a 6.7% rise. Nevertheless during decades under prime minister Vajpayee and then Narendra Modi, optimism for this largest democracy continued. Pakistan had still a longer way to go with setbacks such as the jihadist murder of president lady Benazir Bhutto in 2007. Founded in 1947, Pakistan was characterized by troubles in the Afghan border region, by wars with India, and by the necessity of U.S. aid. As a result, its eastern province separated in 1971 and became the state of Bangladesh, hit by poverty. When Donald Trump threatened in 2018 to terminate the $33 billion in aid for Pakistan over the last 15 years, the China-Pakistan Economic Corridor CPEC was evaluated. Already in 2013 Pakistan got an IMF rescue and in 2018 it asked for a $7 billion bailout. But talks stalled “because it was impossible to gauge the scale of hidden liabilities to China” (so reported by Financial Times, Jan19, 2019). Bangladesh recovered under prime minister lady Sheikh Hasina Wajed, the daughter of the murdered first prime minister. Ceylon was liberated in 1948, renamed Sri Lanka in 1972. In the new century after end of the Tamiles’ bloody civil war, it suffered the financial crisis of 2015 and got an IMF rescue package. Australia, New Zealand, Pacific Islands Remote Australia has an extremely small population, no more than Shanghai or Mumbai. Both Australia and New Zealand prospered from export of raw materials and agricultural products. Own industry is lacking and more immigration is necessary. China Daily (March31, 2017) reported that “Japan was the fastest growing source of ‘new Australians’, followed by China, Malaysia and India.” Commonwealth membership kept up some familiarity with the United Kingdom, symbolized by Queen Elizabeth and also by traditional Qantas Airways. And by stationing U.S. Marines at Darwin in the North of Australia, president Obama tried to emphasize America’s presence in the Pacific region, manifested since decades by the U.S. outposts in Micronesia, connected to the dollar currency. But China is by far the biggest market for Australia. The China – Australia FTA came into effect in 2015 and the China – New Zealand FTA was signed already in 2008. Central and South America Centuries of colonialism and slavery in Latin America have left a legacy of social inequality. The same root cause resulted in Juan Peron's reforms and his wife Evita’s social engagement in Argentina and the Cuban revolution under Fidel Castro. Cuba had been a vassal of the USA, but in Jan 1959 long-term dictator Batista fled by plane. In Chile socialism under Dr. Allende was rigorously stopped in 1973 by Pinochet, dictator until 1990. Stagnating communist Cuba was subsidized by Russia under the condition of buying uneconomic Russian airplanes. Towards Christmas 2014 Pope Franciscus (Francis) promoted reconciliation, with the visit of president Obama to Raul Castro in 2016 it came true and in 2018 M. Diaz-Canel was appointed president of Cuba. Tourists, flown in by foreign airlines, arrived in Varadero of Cuba, in Costa Rica and in the Dominican Republic. The US outpost Puerto Rico was rescued in 2017 by president Trump with a bailout. In Jamaica, poverty had led around 1980 to the problem between IMF rescue or marijuana exports. On the South American continent, most of the 500 million people had to subsist on 2 dollars a day and children sleeping aside the road could be watched. Latin America is suffering under corruption and it developed the highest crime rate, frightening tourism. In Ecuador, problems led in 2000 to selection of the US dollar as the official currency, before a leftist course changed it. In Colombia and in Mexico the drug gangs have harassed the state. During these times almost all the national flag carriers went bankrupt. In Venezuela, oil had been discovered already in the 1920s. After horrible tyrannies, democracy has been built up in 1958. President Perez nationalized the oil industry in 1976 and founded PDVSA. Hugo Chavez was elected in 1998 and he surprised with his new flag carrier Conviasa’s flights to Ahmadinejad’s Tehran. Chavez undertook to order IL-96 planes from Russia, he signed the deal aboard a Russian warship, named however not after Lenin, but after Tsar Peter the Great – and soon the deal was canceled. The Economist informed in 2014: “For Jamaica, Guyana, Nicaragua and Haiti, the value of preferential Venezuelan financing for oil imports is (…) equivalent to around 4% of GDP. Cuba is also heavily dependent.” The oil production halved in the early 21st century. Venezuela got credits via Rosneft, tourism disappeared and the highest inflation rate and famine appeared. New banknotes were printed in Sweden and in Dec 2016 an IL-62 arrived at Caracas with millions of worthless paper. In May 2017 Conviasa’s services vanished almost completely. Successor Maduro tried to re-establish stability, dependent on oil exports to the USA, but in 2017 he was reported traveling to Moscow aboard the Cubana IL-96 for VIPs. On the coast, piracy chased away shipping. More than three million people have fled, mostly on foot to Colombia, where the Marxist Farc guerilla had given up. Venezuela tumbled into famine and Maduro blocked humanitarian aid supplies. The USA's proposal of a "Free Trade Area of the Americas" was opposed by certain states. In Brazil, dictator Vargas committed suicide in 1954. The capital was relocated to Brasilia in 1956. After the end of military rule in 1985, the growth rate under Lula da Silva had topped the 5% in 2006, expected to boost an open Latin American "Mercosur". Brazil with a GDP(PPP) of $2.4 trillion e.g. in 2013 ranked number seven in global statistics. But in 2015 Brazil’s worst recession since the early 90s was reported and traditional airline VARIG vanished in 2009. The elections in 2018 were won by Jair Bolsonaro, with the hope of reforms. But first he surprised by liberalizing the purchase of arms. In Argentina the last military interlude had ended in 1983. Carlos Menem and then Nestor Kirchner undertook to rationalize the country and in 2015 president Cristina Kirchner stated proudly: “We have less poverty…” But the inflation rate had climbed to 40% and successor Mauricio Macri fought for rationalization, last not least of state-owned Aerolineas Argentinas. In 2018 Argentina necessitated a $57 billion IMF bailout, the largest in IMF history. Generally in Latin America commerce with the outside world has grown. The Pacific Alliance, including Chile, Peru, Colombia and Mexico, needed a counterpart, the Mercosur of Argentina, Brazil, Uruguay and Paraguay, targeting a trade pact with the EU in 2019. Airlines going multinational in ownership realized cooperation in their own way, demonstrated by Lan Chile, developing into LATAM, and by Avianca-TACA – see the chapter Air Traffic/ Mega Groups.
Sub-Saharan Africa The continent was liberated from colonialism mainly between 1960 and 1975, symbolized by East African Airways, West African Airways, Central African Airways and in the French sphere by Air Afrique. All these co-operations ceased. Kenya maintained stability under Jomo Kenyatta, symbolized by Kenya Airways. In many other countries wars raged, the most horrible ones in formerly Belgian Congo (Congo Kinshasa), exploited from the beginning, continued under dictator Mobutu Sese Seko, renamed Zaire from 1971 to 97. After the turn of the century, Congo was ruled by Joseph Kabila. In 2018 people pinned hope on Martin Fayulu, a former executive of Exxon Mobil, but candidate Tchisekedi became president and Financial Times assumed: “Congo steers towards isolation.” For conflicts, also in Angola, compare the chapter The Flight/ Conflicts. Split up into many nations, Sub-Saharan Africa continued for decades to be the region with the lowest economic growth and falling GDP per capita. The main causes were wars, genocide, corruption or communist socialism, temporarily e.g. in Mali, Guinea, Ghana, Benin (the former Dahomey), in the formerly French Congo (Brazzaville) and in Mozambique, in some cases illustrated by the purchase of uneconomic Soviet-built aircraft. On the other hand, with formerly French outposts a connection had been created on Christmas 1945 with the CFA franc currency, along with the CFP franc for New Caledonia and Polynesia in the Pacific. In Ethiopia, Emperor Haile Selassie has been ousted in 1974, and after communism and wars the country recovered, symbolized by traditional Ethiopian Airlines. Under a strong government, Ethiopia had posted double-digit growth over the first decade of the new century. Somalia, in contrast, was strangled by civil war and tumbled into famine. The lack of infrastructure in Sub-Saharan Africa means that air travel sometimes provides the only means of money transfer - for the rich. Despite all the troubles, in 1963 the organization African Union (OAU) was founded for Africa’s unity, followed in 1973 by the United Nations’ Economic Commission for Africa (ECA) and in 1979 by the Southern Africa Development Coordination Conference (SADCC). With AfriCom the USA started to prevent countries from becoming "failed states". Nigeria with the largest population has started to advance in commerce under president Jonathan. In 2015 Muhammadu Buhari, ruler already in the 1980s, won the elections, but he was confronted with a shrinking yield from oil exports, causing a recession for the first time in two decades, necessitating nationalization of Arik Air. During the campaign for elections in 2019, the slogan emerged: “Buhari keeps the power, but Attiku keeps the money.” And candidate Attiku’s private jet was boarded by police agents when it should depart from the capital Abuja to Dubai (according to El Pais, Nov27, 2018). Rising crude prices were a hope, but founding a state-owned Nigeria Air was disputed. Oil-rich Gabon and Equatorial Guinea were dependent on crude oil prices, too. Rhodesia, non-racist, has become Zimbabwe in 1980. Around the turn of the century it tumbled into hyper inflation and famine. In 2006 ruler Robert G. Mugabe intended to import IL-96 and Tu-204 planes on Russian credit, Air Zimbabwe however felt not inspired and remained with Boeings. In Nov 2017 Mugabe was forced to retire, but his daughter undertook to start a privately-owned Zimbabwe Airways. IMF statistics for Africa have shown growth rates surpassing 5% in the first years of the 21st century, nevertheless a World Bank study of 2008 showed 50% of the population living in extreme poverty on an average 70 cents per day. The G7 summit in 2015 envisaged to liberate half a billion people from starvation. In the state of South Africa the white ‘apartheid’ horror, emerged in 1949, has ended in 1992 thanks to the passive resistance, symbolized by Nelson Mandela, who has spent 27 years in prison. He has shown a peaceful way into future, and foreign investment is welcomed. Neighboring Botswana concluded a customs union with South Africa. At the summit of the African Union (AU), the commission’s boss lady Dlamini-Zuma stated that six among the ten fastest growing economies are African. But in South Africa, together with Nigeria the leader in African economy, insiders reminded of the rand’s decline, a rising crime rate and corruption, leading in 2018 to the retreat of the president. Nevertheless South African Airways maintained its position as number one in Africa. And IATA officials had estimated in 2016 that seven of the fastest growing aviation markets in the next 20 years will be in Africa. These include Ethiopia, Rwanda, Tanzania and Uganda. Under the headline ‘Appetite for risky sub-Saharan debt’, Financial Times quoted analyst Dergachev being “positive about Rwanda, Ethiopia, Ghana and Zambia, and negative on Mozambique, Gabon and Angola.” For 2016 an economic growth of only 1.5% was registered for Africa, compared to a growth in population of 2.5%. In some states, life expectancy was less than 45 years. Infections and global warming are additional risks.
Global Development Around the year 2000 the "G6" (USA, Japan, UK, Germany, France, Italy) dominated the global economy while the "BRICs" (Brazil, Russia, India, China) held only a 10% share. But with China entering the WTO, new perspectives were opened. Then Russia fell outside the top-ten, but it targeted to re-enter. The leading central banks US Federal Reserve, European Central Bank, Bank of Japan and Bank of England were joined by the People’s Bank of China. But the US dollar strengthened its position as the leading currency. Jean-Claude Junckers fumed “that European companies buy European planes in dollars instead of euros”, wrote the Financial Times in 2018, informing also that China’s loans to low-income countries “tend to be in dollars.” A McKinsey analysis of 2005 showed that since 1980 the size of global equity had tripled from roughly 1x to 3x the global total GDP and it rose further. Then the American financial setback of 2008 has exposed the problems of markets which cannot police themselves. IMF estimated that countries representing two-thirds of global GDP(PPP) experienced a decline. Considering debt relative to GDP, the USA in its 1930s' depression saw this rise to 40%. It surpassed 100% during WWII (statistics from Morgan Stanley). According to Neue Zurcher Zeitung, under president Clinton it did fall from 65% to 54%, after the crisis of 2008 rising towards 100%. For the year 2010 the national debt/GDP was estimated at 197% for Japan, 127% for Italy and 92% for USA (source: OECD). In 2012 people were frightened by the news that the national debt of the USA has surpassed GDP. The Federal Reserve under Ben Bernanke had prevented a global setback by pumping money into the economy. The Federal Funds Rate has jumped down to less than 1%, causing a money flow into the economies of Asia and Latin America, estimated having achieved almost $4 trillion between 2008 and 2012. In 2015 “IMF Managing Director Christine Lagarde said that monetary policy in the world’s leading economies was out of step”, reported the Gulf News (March17, 2015), continuing: “Her warning came on the eve of a meeting of the US Federal Reserve that is expected to signal an increase in ultra-low interest rates.” An increase under Fed’s boss lady Janet Yellen came true. Successor Jerome Powell abandoned in Jan 2019 plans to lift rates further, facing global trade tensions. The World Bank had announced to expand its bond issuance on behalf of the poorest states. Annual supranational bond issuance had risen to $ 265 billion in 2016, according to Dealogic. What about the stock prices when using the Cyclically Adjusted Price Earnings ratio? Analyst Robert J. Shiller reported in 2017 a ratio “above 30 today, compared with an average of 16.8 since 1881.” Between 1997 and 2002 the ratio soared as high as 44 and then the stock prices “lost half of their real value.” Another matter is the inflation rate in certain countries. There are always obstacles to an economic development, unnoticed by statistics. “The top 10 industrial countries dominate the most bribe-riddled industries: defense, civilian aircraft, telecommunications systems, oil and gas, heavy construction,” wrote Newsweek in 2002. The value of weapons exports was estimated (by a Hewlett-Packard publication) in 2003 for Russia $5.9 billion, USA $3.9 billion and China advanced to $0.8 billion. ‘Red tape’ is common practice anywhere in any profession, literature, philosophy and art dealing included. Another obstacle was described by the media: “While global trade has roughly doubled since 1990, from the $5 trillion to the $10 trillion range, the amount of money being laundered worldwide has grown at least tenfold – to nearly $1.5 trillion in some estimates.” The Global Forum of OECD has listed 170 tax evaders’ paradises. And tiny island “countries” became places for aircraft registrations. In 2016 came the shock of the ‘Panama Papers’, obtained by the International Consortium of Investigative Journalists. “Among the countries with past or present political figures named in the reports are Iceland, Ukraine, Pakistan, Saudi Arabia, Russia and Argentina”, wrote the USA Times (April05, 2016). “A suspected two billion money laundering ring run by a Russian bank” was mentioned by Britain Today, continuing: “In China the families of at least eight current and former members of the supreme ruling politburo had been found to have hidden wealth offshore.” And in Europe, an investigative journalist lady was already murdered in Malta. Financial Times (Jan19, 2019) reported another case: “Malaysia’s finance minister has rejected an apology from Goldman Sachs over the 1MDB embezzlement scandal” and demanded $7.5bn in reparations. An important statement concerned China: “The US administration has made it clear it will not support any IMF rescue that simply helps a recipient pay off debt to China.” And listing countries with dirty money politics remained a task. A compilation by the Financial Action Task Force was surpassed by the European Commissions’ black list of 2019. An ever present danger was flagged by Stephen Roach, chief economist at Morgan Stanley: "For a great number of major industrial nations the share of economic rewards going to labor stands at a historic low. This is not sustainable" (Newsweek, Feb 2007). The Economist (Oct04, 2014) quoted from a study of the Organisation for Economic Co-operation and Development (honoring also historian Angus Maddison’s contribution) that “income inequality was about the same in 2000 as it has been in 1820 (…). Inequality of that sort fluctuated for 130 years to 1950, before falling sharply in 1950-1980, in what the report calls an egalitarian revolution. Since 1980 it has risen again (as Thomas Piketty, a French economist, has shown), back to the level of 1820.” When Der Spiegel (8/2013) assumed that TUI paid some top wage of 1.2 million euro per annum, that was almost nothing compared to a 14.5 million wage of a troubled motorcar company’s boss, reported by the media. In the USA around 1980, 40% of the yield went to 1% of the population, while in 2008 that minority grasped at 60% and the rich-poor divide widened everywhere, also in China. According to Oxfam (published by tz, Jan19, 2019), in 2018 the fortune of billionaires has risen by 12%, while the poor half of mankind had to bear losses of 11%. This rich-poor divide, concerning also education and jurisdiction, is considered endangering civilization. Data in 2015 for the leaders in their region (in accordance with Trading Economics):
The GDP of China comprises also Hong Kong with $0.3 trillion. Within the euro currency area, Germany, France, Italy, Spain and Netherlands occupied the highest ranks by GDP. In 2017 the GDP was listed (by Spiegel 16) for China with $13.1 trillion and for the USA with $19.8 trillion, rivaling with the EU. The national debt per GDP must not be confused with the total debt of financial institutions and private investors, causing misinformation.
 Air China A330, Munich 2015 (WS)
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