Updated: Apr 30
So, everyone knows that 2020 was a challenging year. The coronavirus caused many different issues with health, jobs, economy, politics, etc. For some people, these challenges made them grow as individuals, but for many, it caused them to become overwhelmed and yielded their lives to have to be restructured completely, which can be devastating. You cannot live in the past; you must look forward, so now that 2020 is over, what does 2021 hold for use? Let look at another country’s perspective on what 2021 is projected to be like.
The year of the Metal Ox
2020 was declared the year of the Rat, which typically signifies renewal and the opportunity for success in new ventures. As we already know, the world did go through distinct changes, but not in the way anyone had hoped. Social unrest, political turmoil, economic decline, and a global pandemic (that occurs once every 100 years) completely and severely transformed our lives. While 2020 may appear like it was an epic disaster, the year of the Rat did present many with new opportunities: to change the world for the better.
Every Chinese zodiac year is defined by one of the five natural elements. 2021 is the year of the Metal Ox, with a message that could not be more explicit: Success will come to those who work really hard. “It is hard work, duty, discipline,” says Susan Levitt, a professional astrologer. “In agriculture cultures, oxen are reliable and strong work animals. They were depended on for the survival of humanity. So, what was happening in this Rat year continues over into the Ox year to complete it, ground it, bring it to its resolution.” Here is what each of the Chinese zodiac signs can do to reap benefits in 2021, the year of the Metal Ox.
2021, A Year of Change
It is difficult to make predictions, especially about the future. A worldly man, Yogi Berra said this, and he’s still absolutely right, especially at uncertain times like the present. This article attempts to explain why 2021 will be a very different year from 2020 and specifically in which aspects.
It is difficult to make predictions, especially about the future. So, said a worldly-wise man, Yogi Berra. He was and still is entirely right, especially these times when the degree of uncertainty is unprecedented. But right now, when making forecasts, when it is incredibly complicated and risky, is when everything makes complete sense. We will justify why 2021 will be very different from 2020 and how this difference will materialize.
To start with, the return to growth
When we discuss growth in 2021, one of the year’s critical points, we can assume that recovery will occur. Recovery is the result of two factors that can be considered guaranteed: 1) During several periods of 2020, the economies have been halted in all countries to an extreme degree, and we trust that this will not be repeated in 2021, and 2) stimulus measures have been introduced in most US states.
But just how much growth is possible? Here is where uncertain territory comes into play. This figure is essentially based on two premises. First, the pandemic will be less disruptive than in 2020, but the economic consequences will vary considerably depending on the country. The second is that the larger the stimulus, the greater the recovery.
These figures broadly suggest global growth of 5.5% in 2021 (compared to the –4.1% estimated for 2020), with China in advanced stages of recovery (+2.0% in 2020 and +8.3% in 2021), the U.S. emerging from recession at an equitable rate (–3.6% in 2020 and +4.1% in 2021) and in the euro arena, sadly, recovering only a portion of its lost ground (+4.3% in 2021 versus –7.4% in 2020). In this context, we anticipate a growth of 6.0% for Spain (–11.4% in 2020) and 4.9% for Portugal (–8.3% in 2020).
What about the risks? There is no shortage, and they have an apparent downside of bias. The potential for new strains of the virus is possible; economic policy errors (such as prematurely relaxing efforts to alleviate the short-term shock) cannot be entirely ruled out; the strange complacency that seems to encircle the financial markets could lead to a phase of greater sensitivity to macro-financial risks; or, the political situation, which is sensitive in many ways, could generate adverse surprises.
Additionally, besides growth, 2021 will be different in several key ways, which will lay the future path for our world.
Bringing the COVID-19 pandemic under control
We think that the fight against the pandemic will likely turn a pivotal corner in 2021. In line with many epidemiologists’ opinions, we do not expect this shift to come in the form of a single “solution” that will eradicate the virus. While we are assured that several vaccines will be deployed during 2021, they will be effective but not entirely. We also share this view with potential production and distribution difficulties in achieving the high vaccination rate with guarantees in the long-awaited herd immunity. That said, we do not doubt that it will be possible to vaccinate risk groups and essential workers, such as those in healthcare. We are confident that it is possible to accomplish this during the first half of the year. In short, the vaccine will be a vital element of the cocktail in measures that will allow us to change the tide of the pandemic, but it will not be the only one.
What are the other ingredients? We expect them to include the ability to conduct rapid tests at a low cost and on a massive scale, advancements in therapies to treat the illness, and more efficient coordination that makes up national health systems.
The new mobility
More activity means more mobility. Will we see pre-pandemic levels become restored? Not likely! In 2021, It will still be lower than it was at the end of 2019. Moreover, the final level of mobility is expected to be lower on quite a permanent basis. The primary reason for this is the consolidation of teleworking, which, according to estimates, could eliminate around 7 percent of commutes to large cities.
Additionally, there will be a qualitative change in mobility. There are raised concerns about the loss of public transport’s share in the mobility mix. This is justified, according to a survey conducted by the Boston Consulting Group, when the virus is contained, only half of those interviewed will go back and use public transportation again. A more encouraging trend will be the continued growth of fully electric and hybrid cars, a segment that surpassed diesel in Europe for the first time in September.
An important year for the sustainable economy
This accelerated “greening” of the fleet in the overly-polluting vehicles has opened the door to the next realm of change, the sustainable economy. 2021 will be a year of accelerating trends; however, whether or not the long-awaited goal of decarbonization can be achieved by 2050 globally and by 2060 in China is open for debate.
In 2020, according to the International Energy Agency, although global energy demand will have fallen by 5 percent, electricity produced from renewable energies will have increased by 9 percent, and this rate will accelerate in 2021. Renewables are on track to become the primary source of electricity by 2025, which ends five decades of coal dominance.
5G, the critical technology infrastructure
Decarbonization will go hand in hand with society’s digitalization, a trend that should facilitate the partial replacement of people and goods with that of data. The key to this shift towards imperceptible flows largely depends on an incipient technology, 5G, which offers unparalleled possibilities for connection speeds and device connectivity, all with minimal latency.
This is a critical improvement, but progress in Europe is slower than anticipated. Although multiple projects are being revealed, in 2020, only 11 EU states had 5G roadmaps with only 20.5 percent of the 5G radio spectrum being allocated. 2021 should be treated differently. In Spain, the auction will be held for the 700 MHz spectrum, which is key in developing 5G and will enable more significant infiltration of the network. The challenge is to cover the territory, not just the population.
Who is in charge? Complexities of a multipolar world
5G is unsurprisingly associated with the US-China technology conflict and, in a broader sense, with the struggle for global dominance. China will not wait for anyone! It was recently announced that a new free-trade area would be created in Asia, led by China, encompassing approximately one-third of the world’s GDP. In this context, the U.S. must decide whether the current hard-line approach is truly benefiting it. It does not look like it. The U.S. is now implying the idea of a rapprochement with its traditional partners (that is, the EU) and rejoining the World Health Organization and the Paris Climate Agreement.
This does not mean that the competitive desires will not continue since the tensions between the US and China are unlikely to subside; however, they could be framed to cooperative schemes that help agreements, which could help reduce the current ambiguity. The alternative to this new global collaboration would be an acceleration of what we might call the new global mercantilism. This allows an institution to go more down the path towards a unilateral world system based on relations of relative power (and less dependent on global rules and institutions). In the meantime, the signs indicate a particular inclination towards the first scenario.
In short, it cannot be mistaken that 2021 will be radically different from the fateful 2020, with its wake of human losses, social turmoil, and economic destruction. In years of change, the past can be a deceptive guide to predicting the future. We must be attentive to the possibilities as they present themselves, which should be plentiful.
Levitt, S. (2020). Reader’s Digest Interview Ox Year 2021. Retrieved from https://susanlevitt.com/2020/10/28/astrology-2/
Ruiz, A. (2020). 2021, A Year of Change. Caix A Bank Research. Retrieved from https://www.caixabankresearch.com/en/economics-markets/recent-developments/2021-year-change
Image provided by Midjourney (April 30). Retrieved from https://www.midjourney.com/home/?callbackUrl=%2Fapp%2F