The Pandemic and Economic Perspectives for 2021

By Pasqualina Curcio on January 11, 2021

The behavior of the pandemic and, above all, the possibility of equal access to the vaccine will be the determining factors for the economy of the planet in this year that has just begun.  The World Bank says that, according to their calculations and in the worst case scenario, there will be a world economic growth of 1.6%, following a 4.3% decline recorded in 2020.  In the most optimist scenario, the recovery would be about 4%.  There are differences between regions and countries; for example, while a 3.5% re-activation of the economy is expected in the U.S. after a 3.6% fall in 2020, in China a growth in economic activity of 7.9% is predicted, which is 4 times greater than the 2% that was recorded in 2020.

Beyond the cold figures of  GNP (Gross National Product), a third wave of the pandemic is foreseen for the first months of 2021, due to the new strain of virus, thought to be 70% more contagious.  To date, almost 90 million people in the world have been infected with this illness, and 1,924,000 have died.  It is estimated that in 2020 some 12,000 people daily died of starvation as a direct consequence of the effects of the pandemic, which is more than the 5,274 deaths a day directly from the illness itself, as calculated by OXFAM. According to them and the UN International Labor Organization, 400 million jobs were lost and a million more poor people were added to the 3.2 billion already living in poverty.  At the same time, the wealthy of the world – in other words, 1% of the population – got richer.

Despite the fact that COVID-19 demonstrated the resounding failure of the capitalist system in its most savage expression, neoliberalism, we do not discern a change in this exploitative mode of production, which generates inequality and poverty.  On the contrary, the owners of capital are riding a wave of re-invention, with discussion of a return to the Social Welfare State, which is nothing other than giving the State a greater participation to let it occupy itself with those affairs that the bourgeoisie does not want to deal with or with matters that do not offer them any great benefit, but that allow for the working class to maintain subsistence at a minimal level and reproduce – necessary for bourgeois accumulation of wealth.  In 2020, we were able to see several people’s movement against this system, but what we did not see were real leaders who could channel these demands of the people.

It appears that in 2021the decadence of North American imperialism will accelerate.  The world’s policeman keeps losing more and more world geopolitical and geo-economic space.  While the U.S. economy, in debt and deficit-ridden, shrank in 2020, that of China not only grew, but also advanced in terms of technologic innovations.  The Asian nation created a quantum computer that is 100 billion times faster than the Gringo one, and in November they put the first 6G satellite in orbit.  Already in 2019 they had, for the first time, landed on the dark side of the moon.

With scarce petroleum resources, barely sufficient for six years, the U.S. has not only failed to control the spread of the virus, but has exhibited a serious internal economic, political and cultural crisis. The assault on the Capitol this past week is one more symptom of the decadence of a country in which the number of guns is greater than the number of people – at 120 per 100.  The demonstrations against racism are a similar symptom, as is the 40% poverty rate, half a million homeless people, 14% unemployment rate, and so on.

While the dollar shows signs of a steep fall, gold continues to rise, along with advances by the Silk Routes through Central Asia, Russia, East Africa, Europe and Southeast Asia.  While Republicans and Democrats are fighting over the Oval Office, 14 countries of Asia and the Pacific signed the world’s largest commercial agreement; these include the major U.S. allies Japan, Australia, and South Korea.  These 15 countries represent 30% of the world’s production and population.  Commercial routes and agreements that will be moving ahead with currencies other than the dollar, and with compensation and exchange systems outside the SWIFT system historically dominated by the U.S. Federal Reserve.

As things are, the U.S. as an empire has been falling behind economically, and in terms of energy and technology production, not to mention that the U.S. military has ceased to hold first place in numbers of nuclear warheads.  Russia is currently in the first spot with 6,375 and the U.S. has 5,800.  China is in 3rd place with 320 warheads.  Regarding this subject, we wish to raise our voice and advocate for world nuclear disarmament and the fulfillment of the Nuclear Arms Nonproliferation Treaty signed 50 years ago.

In Venezuela:  Exactly like the rest of the world, the Venezuelan economy in 2021 will depend on the course of the COVID-19 pandemic and the access to vaccines.  We must add to that the imperialist attacks in the framework of unconventional and low-level warfare declared on us since 1999, and carried out under the Monroe Doctrine and Containment Doctrine.  Our economy in 2021 will also depend on the effectiveness of the responses of the Bolivarian government and the country of Venezuela when opposing these attacks.

To believe that Trump leaving the White House will imply a closer relationship with the U.S. government, to the point where they stop the aggressions against the Venezuelan people is, to put it mildly, not only ingenious but also a serious strategic error in the setting of this war.  It is not the presidents in office who give the orders to attack – it is the huge corporate capital, financial and media interests that feel threatened by socialist revolutions.  From Eisenhower to Trump, the Cuban people have been assaulted and blockaded during 60 years, through 12 presidents.

We are not setting up ourselves as prophets, we have no access to the Oracles of Delphi, nor do we believe in the irresponsibility of offering numerical estimates of Gross National Product and inflation, for two reasons.  In the first place, because we don’t have enough information to allow us to make statistical predictions of these economic indicators. (The Central Bank of Venezuela and the National Statistical Institute are not publishing this.)

Second, because the determinant and explanatory variable of what occurs with production, exports, prices, salaries, and unemployment in the Venezuelan economy is the exchange rate of the bolivar currency with the dollar.  These rates are impossible to predict due to the fact that they are determined by political criteria, or, more accurately, by warfare.  Only those who control DolarToday know what the exchange rate for the bolivar will be tomorrow.  However, we will share some aspects that we believe should not be ignored in considering possible future economic – as thus political – scenarios.  We will do this in the next article.

Source: Ultimas Noticias, translated by Resumen Latinoamericano, North America bureau