A mere matter of days ago the world was looking forward to a global exhale. Word was spreading in speed and volume that the worst of 2009’s global economic crisis may, just may, be over. The time had come to shift into cautious, reconstruction mode of our wounded economies and societies. Much to reflect on. Much to learn from. Much to be grateful for. Many reason to keep praying.
In Mecca the Haj had just concluded, bringing together in body and spirit millions Muslims from across the world to perform an all-important pilgrimage which has become part of life’s duty and joy, and the festival of Eid was about to begin. Similarly millions of Americans across the world were coming together to celebrate Thanksgiving, an occasion which reunites family and friends to count their blessing around feastful tables. Other occasions also unfolded around the world, gatherings of cultural or personal or religious or historical significance. Millions and millions of people on the move during one of the busiest travel periods of the year. Roads, train stations and airports were chaos due to the ten-fold increase in traveller numbers. So many people – so much stuff! For travellers it was worth each and every moment of the moving madness.
Because the goal was to be together. For a few days the world was united by the joy and gratitude of being a part of something bigger.
And then news broke, news which had everyone talking. Something had gone very wrong. One by one markets across the world were starting to shake. Tremors were reaching from London to Hong Kong to Sydney to New York. Green indices were showing shades of red. The slowly untying know in the stomach of global traders and investors suddenly felt a pull. Why? DUBAI.
Without warning, with great regret, Dubai announced a request for delay of payment of over US$ 59 billion in debts owed by two of the Emirates’ most powerful, state-owned corporations responsible for transforming Dubai into a mesmerising modern oasis in the Middle East: Dubai World and its incredible development arm Nakheel. Suddenly it all looked like a mirage. A place built on unprecedented vision, deep pride, immense courage and exceptional confidence in possibility admitted, despite all projects and protestations, that it too was hurting beyond containment. And the world was about to hurt with it.
Immediately Asian stock markets went into decline. In Tokyo the Nikkei dropped 3%, Hong Kong by 5%, Shanghai by 2.5% and Sydney by 3%. By the end of the trading day Asian shares dropped the most seen in the previous eight months. As the sun set in Asia trading eyes shifted to see how London and New York would respond when they woke to hear the news – and if they could do anything about it.
Despite a world of distance and difference, suddenly we were shown once again that we are all connected, whether we like it or not, whether good for us or not. At time of writing – the first trading day since the announcement – the Abu Dhabi stock exchange has just closed 8% down, suffering its biggest one-day loss in over a year. The sibling Emirate looked to by the global financial community to buffer the impact of Dubai’s crisis through bailouts has taken its own hit.
What is remarkable about this latest global market shock is not just the fact that it has happened, or that it has happened when the world’s markets was just getting ready to start to peel off Band-Aids, but how it has revealed more vividly than previous crises in other markets just how deeply and indivisibly interconnected the world has become. The global economic crisis has X-Rayed the world. The anatomy of our now truly global economy has been exposed.
Some of the first images came through in late 2008. Housing credit in the USA, seemingly a fingertip of the world’s economy, was exposed to be linked to a major artery – Chinese banks. As the housing crisis set in the empty bellies of household Piggy Banks around the globe made it impossible for consumers to purchase basic toys – appliances, electronics – causing the bellies of airplanes and cargo ships to go empty, causing global trade to slow, causing money flows to slow, causing factories to slow, causing employment to slow, causing household spending and savings to slow… By early 2009 banks confronted with slowing inputs slowed outputs, slowing loaning, slowing investment, slowing development, slowing building, slowing openings, slowing opportunity for recovery of capital, slowing everything that could be slowed. And in some cases, stopped.
Soon, like a chronic illness, the crisis worked its way to the heart of the global economy and governments needed to step in and put their major industries on life support to ensure the heart kept beating, pumping blood – economic activity – throughout the body.
Still, looking at the body holistically, even greater than the loss in financial resources has been the loss in one of our world’s most precious natural resources: CONFIDENCE. While money may be the blood of the global body, confidence is the spirit. And it is the spirit which ultimately chooses between life and death.
What has happened to Dubai, a place where reputation and delivery are equity, has been not just a loss in financial worth, but a loss in psychological worth. Loss of face. Loss of hope. Loss of trust. It is the same loss which has happened in so many nations over the past 12 months. And it is painfully sad.
As 2010 nears and cautiously unfolds, CONFIDENCE will become one of the most powerful currencies behind economic recovery. No one has been immune to the impact of the global crisis. Directly and indirectly everyone has lost something of immense worth. The body has experienced shock after shock. Recovery will take time, understanding and careful rebuilding of strength. And it will require empathy and encouragement.
Most of all, it will require fundamental belief in the ability, and right, to heal with dignity and respect.
Copyright: ANITA MENDIRATTA 2009