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2014: the best-case scenario

A sustainable recovery. A ceasefire in Syria. Even a victory in the World Cup final. Is that too much to hope for?

Prediction is a dangerous game, as investors, gamblers and fortune tellers in their legions would confirm. When it comes to world affairs, the challenge is trickier still; in the words  (apocryphal or not) of Harold Macmillan, “events, dear boy, events” have a tendency to bulldoze their own path, setting off cascades of unanticipated consequences as they go. Caveats aside, however, there are questions that we can be all but certain will arise in the year ahead.

Let it grow

Perhaps the most obvious is the economy. For the Coalition, 2013 ended on a high unexpected in even the most optimistic quarters. As growth roars ahead faster than in any of our developed-world counterparts, the auguries of double – let alone triple – dip are long forgotten and Labour warnings about years of stagnation have been swiftly reworked.

It is too soon for complacency, though. True, confidence, and with it spending, are on the up. But it is consumers – with a helping hand from falling borrowing costs and rising property prices – in the vanguard. The problem is that debt-fuelled growth is not to be relied upon, as the 2008 crisis amply demonstrated. Yet more concerning is the incipient housing bubble that the Government’s Help to Buy scheme risks inflating. In fairness, recovery has to start somewhere. But the Chancellor needs to encourage business confidence and – crucially – investment to follow where consumers are leading.

Politics goes positive

The recovery is not only a matter of economics. For all the Tory triumphalism about brighter prospects and falling government debt, the Opposition tells a tale of lagging wages and falling standards of living sadly familiar to swathes of the public. With Treasury largesse crimped by the Chancellor’s austerity targets – to which he must stick – sustained growth is George Osborne’s only hope of winning the argument by the next election. Meanwhile, for Ed Miliband, 2014 must be the year that he lays to rest public distrust over Labour’s economic credentials; victory will be difficult until he does so.

Away from the economy, immigration will continue to dominate, as the furore over today’s lifting of restrictions on Bulgarians and Romanians makes clear. There are real dangers here. Not that the UK will be “flooded” with migrants; rather, that we unthinkingly abandon the openness that has long been a hallmark of British culture, damaging both our society and our economy. It is therefore incumbent upon those with access to the facts – that means Government, of course, but also business, academia, even the liberal media – to ensure that the benefits of immigration are not drowned out of a public discourse as shrill as it is ill-informed.

Ukip snapping up support on the right and all set for a boost from – ironically – EU elections in May will not make matters easier. But the temptation to take on Nigel Farage on his own terms should be resisted. That said, Europe will be a source of friction this year in any event. With David Cameron dragged to the right by Tory eurosceptics not placated by his promise of a referendum, it will be up to wiser counsel from the Liberal Democrats and the business community to make the case for Britain’s continued membership, and to minimise the damage such sceptics’ tub-thumping does to relations with our largest trading partner.

The union backed

The biggest single political event of 2014 will be September’s referendum on Scottish independence. Although nationalists made much of the running in the early stages, Alex Salmond’s promises of quick ’n’ easy re-entry into the EU and of impossibly generous state spending are unravelling as the reality of going it alone becomes apparent. Nonetheless, those who believe all parts of the union are best served by Scotland remaining a member will need to redouble their efforts if they are to cut through Mr Salmond’s misleading, yet charismatic, rhetoric.

The power of diplomacy

From the spread of Islamism, to the withdrawal of troops from Afghanistan, to the chafing between China and Japan over the Senkaku/Diaoyu islands, the global “to do” list for 2014 is as long as ever. But at the very top must surely be Syria. As the civil war rumbles bloodily towards its third anniversary, the international community must shake off its torpor. This is no call for intervention; were there a time for military action, it is past. But the scale of the humanitarian crisis is such that the world cannot simply stand by. Efforts to forge a political solution must also continue, regardless of how futile they may appear to be.

Elsewhere in the Middle East, there is at least a hope of optimism. The latest talks on Iran’s nuclear programme reportedly made progress following up on November’s preliminary agreement. But even with good faith on both sides it will take unprecedented negotiating skills to iron out the details of the deal, and great finesse for political leaders to persuade their respective publics of its merits.

For Barack Obama, the chief actor in this drama, that means not only Congressional opponents from both parties but also an Israeli government so distrustful of Tehran that it has threatened unilateral action. The US President will face no few challenges at home this year: on the economy, on the Obamacare health reforms, and on the continuing fall-out from Edward Snowden’s national security revelations. But a deal with Iran, with its chance of greater stability in a combustible region under impossible strain from Syria, must still be a priority.

And finally...

Back to Britain, and there is one final consideration without which no look ahead to 2014 could be considered complete: the football World Cup taking place in Brazil in June. England’s group – consisting as it does of Uruguay, Costa Rica and Italy – is certainly no walkover. It may even be a washout. But until the matches are played, there is still a possibility of triumph. Now that really would be an “event”.