Forecast: Global Labor Market Update 2012

If 2011 was marked by crises—the Arab spring, the European financial crisis and Japan’s triple disaster—2012 will be characterized by political transitions and global economic risk. This is our prediction based on our latest Global Market Brief and Labor Risk Index, which we conducted with the Eurasia Group.

The economy

The Eurozone’s sovereign debt crisis, as well as a slowdown in the global economy, will bring uncertainty to economies from Asia to Africa and Latin America.

• European countries will continue to tighten their belts.
• Some countries in Asia will have to rely on disaster spending, infrastructure development, and foreign investment to mitigate slowing growth.
• Growth in the global economy will depend on emerging markets: China and Indonesia in Asia, Ghana in sub-Saharan Africa, and those nations in the Middle East whose economies are supported by high oil prices.

Politics:

• The coming year will also be defined by political transitions: elections in the US, France, Russia, and possibly Japan. In China, elite competition during one of the most important leadership transitions in a decade will result in conservative policymaking, but major political instability is unlikely despite headlines.
• In the Asia-Pacific region, leftist opposition parties look well-placed to win a majority in South Korea, while State elections in India will serve as a bellwether for later national elections.
• In Sub-Saharan Africa, elections in Ghana and the ruling party conference in South Africa will set the stage for intensifying labor agitation.
• In Latin America, elections in Mexico will likely return the opposition Institutional Revolutionary Party (PRI) to power, while in Venezuela the outlook for economic and political stability looks bleak no matter who wins the presidential election.

For more on the trends we are seeing in different geographies, register today to get your free copy of the full report.