By Emil Bjerg, journalist and editor of The European Business Review
Russia’s invasion of Ukraine. Energy crisis in Europe. Three Prime Ministers in two months in the UK. Persistent protests in Iran and China. Historic inflation, crypto-crashes, and an ever-luring recession. As 2022 comes to an end, we look back at a year in which uncertainty was one of the few things we could be certain of.
2022 has been a year that’s likely to go down as one of those rare years where the numbers themselves signify a seismic shift in geopolitics and the history of the world. Like 1939, 1989, or 2001, the numbers themselves – 2022 – might come to carry the connotation of enormous, historical change.
The Russian invasion of Ukraine
The reason behind that is Russia’s atrocious invasion of Ukraine. The invasion didn’t actually start in 2022, as Russia has occupied the Crimea peninsula and supported Russian separationists in the Donetsk and Luhansk regions since 2014. But the 2022 attack came at a scale that activated a response to survive as a nation, a response the Ukrainian military as well as Nato has been preparing since 2014.
Putin is reported to have believed that his troops could reach Kyiv in just two days, but a mix of Ukrainian defiance, thorough military preparation, and American and European support surprisingly kept Russian troops from reaching the capital – or any military goals.
Instead, the cities of Kharkiv and Mariupol became centers of horrendous battles and war crimes, as the Russian strategy changed from gaining control of Kyiv to taking the Eastern regions of Luhansk and Donetsk, also known as Donbas.
Since then, a hybrid war, with all that it entails of fake news, false flag operations, cyberattacks, fraudulent elections, and attacks on civilians have been threatening Ukraine and destabilising countries in defense of territorial integrity.
2022 also saw a sad remnant of the past revived: the threat of atomic warfare. While both Russia and Nato seem determined to isolate the military conflict in Ukraine, an atomic threat from Russia has been the evil twin of Ukraine’s relative military success.
While the driver behind Putin’s attack on Ukraine is the Eastern expansion of Western institutions such as EU and Nato, this development has been accelerated rather than halted as both Finland and Sweden completed accesion talks with Nato in July.
Energy crisis in Europe
Russia’s invasion of Ukraine highlighted an Achilles’ heel of the EU, that of an enormous recourse dependency on Russia.
A project that was once seen as a materialisation of the integration of Russia, the Nord Stream pipelines, became a symbol of disintegration between East and West as the pipelines blew up in planned explosions in the Baltic Sea. By the end of December, whether Russia is behind the bombings is still unknown.
The European response to Russia’s recourse warfare was to significantly step up ambitions around renewable energy as the European countries were shocked into action. In May, the European Commission announced a 210 billion Euro plan to replace reliance on Russian fossil fuels with renewable energy sources.
Climate and biodiversity
2022 was also the year when the Intergovernmental Panel on Climate Change (IPCC) released its sixth report, concluding that we are set to pass the 1.5oC threshold by 2040.
The warnings from the report materialised a few months later when Europe saw the worst drought in 500 years as two-thirds of the soil was under some sort of drought warning.
There should’ve been plenty of motivation when leaders of the world met in Sharm El-Sheik in Egypt for the UN’s COP27, but the climate summit left many attendees disappointed, including Ursula von der Leyen who stated that the cop had ”treated some of the symptoms but not cured the patient from its fever”. COP27 will nonetheless be remembered for the establishment of a Loss and Damage Fund, something many developing countries have been lobbying for decades.
In one of the few, major positive news of this year, the UN biodiversity conference ended in binding agreements on behalf of biodiversity. The summit ended in what the United Nations Environmental Programme called a landmark agreement hailed as a ‘Paris moment’ for biodiversity.
Inflation, stagflation, recession
Inflation has been the talk of the town in 2022. What has driven the inflation? The answer, it seems, is nearly everything, Fortune writes. In the Euro Zone, inflation hit a historic high as it reached 10.7 percent in November 2022. In a European context, inflation is primarily driven by the rising costs of energy and secondarily by the rise of costs of food.
In October 2022, Time Magazine warned that We’re Heading for a Stagflationary Crisis Unlike Anything We’ve Ever Seen. As 2022 ends, the recession still lurks somewhere in the future, but experts predict that it’ll hit us somewhere between early 2023 and early 2024. The coming recession is a predictable crisis as the answer to inflation is continuous rises in interest rates, something that both the European Central Bank and the U.S. Federal Reserve have been doing at a historical pace throughout 2022.
Anarchy in the UK
In the UK, politics and the economy has been more unstable than ever. After a series of controversies, including the Partygate, controversial politics, and a range of creative explanations, Boris Johnson had no choice but to resign as Prime Minister in early July.
Liz Truss was elected by the Tories with promises to deliver a 21st-century Thatcherism, a promise that both the global financial markets and the general British population reacted strongly against. When the Daily Mail tested if the newly sworn Prime Minister would outlast a head of lettuce, the infamous iceberg came out victorious.
As Rishi Sunak was sworn in as the third Prime Minister in two months, BBC asked if political chaos is becoming the new normal in British politics.
The year in crypto and tech
Chaos and unpredictability have also been defining for the year in the crypto space, as the cryptocurrencies have struggled to regain legitimacy and momentum after the free fall of digital currencies by the end of 2021.
By the end of 2022, Bitcoin is down 65 percent compared to the beginning of the year. Perhaps even more concerning, a series of bankruptcies in the crypto world, most notably that of crypto exchange FTX, has left a general sense of mistrust among investors and consumers, causing many to question the stability and reliability of the cryptocurrency market.
In the wake of the insolvency of FTX, the European Central Bank claimed that Bitcoin is on “the road to irrelevance”. On the other hand, a November 2022 survey shows that 53 percent of all Americans believe that cryptocurrencies are the future of finance.
Another 2022 meeting place of drama and big money has been Twitter. Elon Musks’ apparent indecisiveness on whether to go through with his 44 billion buy resulted in a lawsuit, that was subsequently dropped to allow for the trade to go through. Since his acquisition, with a mix of tweets and untraditional leadership, Musk has been a non-stop provider of laughs and shrugs to the people of the world while he’s given employees at Twitter and investors at Tesla gray hair.
A controversial World Cup
In a world troubled by war, a climate crisis, and an unpredictable economy, some might have wished for a World Cup without conflicts and politics. Anyone hoping for pure entertainment was disappointed as the focus at the beginning of the 2022 World Cup in Qatar was directed toward the country’s treatment of their large immigrant workforce as well as the country’s lack of LGBTQIA+ rights.
The World Cup saw the Argentinians come out victorious in a much-needed celebratory relief for a country distressed by inflation, poverty, and debt.
Crisis of legitimacy in totalitarian regimes
At the beginning of 2022, Western democracies seemed torn and volatile from internal polarization and fragile supply chains. But as 2022 is coming to an end, it’s the totalitarian leaders of the world that are under pressure.
In Russia, mothers of mobilized soldiers are protesting against the war. Putin’s recent vow to increase the number of mobilized soldiers from 1 million to 1.5 million is likely to escalate the internal conflict inside Russia.
In Iran, the ‘Woman, Life, Freedom’-movement looks more and more like a revolution. And in China, protesters have been demanding to be freed from corona restrictions in rare, historical manifestations.
It’s been mentioned that the Chinese protesters got their courage from the Iranian movement. The Iranian protest against the regime’s murder of Mahsa Amini has been called Iran’s Geoge Floyd moment, while the ‘woman, life, freedom’-movement looks like an Iranian reiteration of #MeToo.
The time when totalitarian rulers could keep news of global movements and events secret from their citizens is long gone, even if blocking and censorship have long been used to control the flow of information. A simple VPN application and you’re connected to the news of the world whether you’re in Moscow, Beijing, or Teheran.
US and Ukraine
A recap of 2022 starts and ends with Russia’s invasion of Ukraine. A year full of historic events ended with another as Biden welcomed Zelensky in Washington in late December. While Washington was wary of giving their full support to Ukraine at the beginning of the year, by the end of the year Zelensky could travel back to war-ridden Ukraine with a 1.8 billion USD aid package, including the advanced Patriot III missile system.
2022 has been so full of news that this recap hasn’t even gotten to mention the Trumpist defeat at the midterm elections in the US or the victory of the socialist candidate Lula over Bolsonaro in Brazil. Both news will impact the course of the year ahead. Stay tuned on The European Business Review to read our upcoming forecast for 2023.
