Review of 2012 - economics: Africa's growth raises questions over wealth distribution, EU's malaise spreads to Brics while Fukushima disaster and territorial disputes halt Japan's recovery
As the Greek national drama entered its third act in the autumn, most eyes had already switched their gaze to Spain. If 2011 was dominated by events unfolding in Athens, the agenda of almost every international gathering in 2012 focused on how Madrid would extricate itself from the debt trap that had already claimed Ireland, Portugal and Greece.
Spain's right-of-centre prime minister Mariano Rajoy inherited a policy of denial from his socialist predecessors and, initially at least, adopted the same tactic. But with Spain targeted by international investors as the next domino after Greece to jeopardise the euro currency project, it became the focus of worldwide attention.
If only Europe could resolve its debt problems, the global economy would recover its momentum. This was the message from Tokyo, Beijing and Washington, where policymakers felt constrained in the face of Europe's procrastination. An impending recession in the eurozone made reforms all the more urgent.
A strongly growing US economy at the end of 2011 entered a presidential election year with Europe on its back. Thankfully for President Barack Obama, the housing crisis, which had seen prices fall by more than 40% in states such as Nevada and Arizona, bottomed out, small companies began hiring and bank lending eased in time for the November vote.
Likewise, Japan began the year in recovery mode. It suffered the double hit of a financial crisis and a tsunami, which wrecked much of the country's north-east in the spring of 2011. Regaining export orders was the No 1 priority and all seemed to be going well until the summer, when the balance of payments went into reverse, largely as a result of huge gas imports to replace the lack of nuclear power following the Fukushima tragedy. Worse, major electronics firms Sony, Panasonic and Sharp revealed deep losses. The South Korean manufacturing revolution, led by Samsung, had effectively ended 30 years of Japanese dominance. Car manufacture continued to be one of the bright spots, though a dispute over a group of uninhabited islands in the East China Sea put even that in jeopardy.
China, which claims the islands along with Japan, allowed nationalists to riot largely unchecked, burning and looting Japanese shops and factories. A boycott of Japanese goods resulted in a slump in sales of Toyotas and Nissans, again allowing the South Koreans a competitive advantage.
Part of the problem followed a year-long slowdown in Chinese manufacturing that was already causing jitters across the west. The Chinese powerhouse economy had survived the global financial crisis after a large injection of government funds, but Beijing had little room to repeat the exercise without stoking inflation and an already rampant property bubble.
Tentative moves to increase government spending on health, social security and pensions, alongside liberalising laws designed to allow more private-sector involvement in areas previously dominated by the state, helped the economy move forward. Yet a political stasis, ahead of November's appointment of a successor to premier Wen Jiabao, appeared to hold up progress.
Brazil, which saw its income jump above Britain's in late 2011 to make it the world's sixth-largest economy, suffered a sharp slowdown following a surge in the value of its currency.
Like the other Bric countries of Russia, India and China, Brazil found it was more dependent on Europe and the west than its public statements of economic independence gave credit.
It complained about the volume of money printed by western central banks that was making its own more attractive. With hot money pouring in, Brazil's central bank raised capital controls. Unfortunately the policy had little effect; foreign investment funds continued to pour in and Brazilian exports became more expensive.
Only Africa appeared immune to the knock-on effects of the eurozone debt crisis. From Nigeria to Zambia to South Africa, growth rates topped 5% compared with less than 2% in the US and sub-zero in most major European countries by the end of the year.
However, a meeting of the World Bank in Tokyo in October revealed widespread disquiet among African trade unions and charities at the distribution of incomes and wealth. World Bank officials were bombarded with stories of poverty among workers while owners, many of them foreign mining companies, made millions of dollars in profits.
In Europe, the year ended on a low note. While Spain appeared to get a grip on its bankrupt banking sector and the European Central Bank pencilled in a recovery for 2013 across the continent, Italy appeared to want the limelight. Silvio Berlusconi burst back on to the political scene, potentially stealing the lead role in the debt crisis from Madrid.
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