Four Charts That Defined the World in 2015

An anti-bailout demonstration outside the Greek parliament in July.PHOTOGRAPH BY MATTHEW LLOYD / BLOOMBERG VIA GETTY

Last year, I wrote a piece featuring charts that illustrated some of the most important business and economic trends of 2014. These trends were the growing numbers of people using the Internet worldwide; the decline in oil prices; China’s rise to economic dominance; and the deepening of global inequality. This year, when I revisited those charts, it struck me that those trends more or less remained in place—and continued to reflect some of the most important issues in the global economy. Ever more people got online; oil prices fell even further; China’s global dominance has remained clear (even as its growth has slowed); and the rich and poor have become richer and poorer still. But, of course, several new developments came to the fore, too, and were every bit as significant as the ones we highlighted last year.

  1. For the first time, fewer than ten per cent of people in the world were living in extreme poverty.

The world has been getting less equal for decades, but last year, rising inequality became an especially fashionable topic of discussion, in no small part because of the release of the economist Thomas Piketty’s book “Capital in the Twenty-First Century” (which John Cassidy reviewed in the magazine), a discussion of the divergence between the world’s rich and poor. This year has brought renewed focus on another measure of global economic well-being—one that looks better, thankfully, than the inequality figures. Even as inequality has grown, extreme poverty appears to be at its lowest level ever.

This might seem counterintuitive, but it has happened because, although the wealth of rich people has grown more than that of poor people, the wealth of both groups, on average, has grown. In October, the World Bank projected that fewer than ten per cent of the world’s population was living below the extreme-poverty line of $1.90 a day—down from thirteen per cent in 2012 and twenty-nine per cent as recently as 1999. Much of the decline has to do with rising prosperity in China and India, as those countries’ economies have benefitted from greatly expanded investment by foreign companies and countries, as well as by their own governments.

  1. Facebook took over the world.

Facebook hasn’t seemed like the most exciting Silicon Valley company this year—not compared with newer and sexier arrivals like Uber and Airbnb. But, on August 27th, Facebook’s C.E.O., Mark Zuckerberg, reminded the world just how dominant his company continues to be when, in a Facebook post, he wrote that it had just passed a remarkable milestone: three days earlier, a billion people—a seventh of the world’s population—had logged onto Facebook. That wasn’t the total number of Facebook users, which was higher than that; it was the number of people actually using Facebook that day—a testament to how ingrained the site has become in people’s daily lives.

“A more open and connected world is a better world,” Zuckerberg wrote. “It brings stronger relationships with those you love, a stronger economy with more opportunities, and a stronger society that reflects all of our values.” If you follow Zuckerberg on Facebook, you might have noticed that he has been spending a lot of time talking about his mission of connecting the world and telling the stories of Facebook users in far-flung places. This isn’t a coincidence. Facebook’s users come from just about every corner of the Internet-connected globe. The research firm eMarketer estimates that more than four hundred million people in the Asia-Pacific region used Facebook this year—more than twice the number in North America. Latin America and the region encompassing the Middle East and Africa each also had more Facebook users than North America.

Even more important than that, for Facebook, is the fact that, even though so many people use Facebook outside North America, there’s room for a lot more growth—especially in the Asia-Pacific region, where all those millions of users represent only about eleven per cent of the population, largely because Facebook is banned in China. That helps explain why Zuckerberg was so effusive in his praise of China during a visit this year.

As I wrote around the time of that China trip, the global growth of Facebook has done a lot of good; the use of Facebook by refugees, activists, and other marginalized people has been well-documented. But countries are also increasingly punishing people for what they post on social media and in other forums. Zuckerberg’s statement about the benefits of a more open and connected world is true—but, despite Facebook’s best efforts to connect the world, Zuckerberg has little control over the world’s openness, which, for the most part, remains determined by governments.

  1. The Fed’s interest-rate target went up—finally.

The Federal Reserve has kept its target federal funds rate close to zero for so long that there are second-graders who have never lived in a world in which the rate has been any higher than one per cent. That’s especially remarkable when you consider the long-term context: in the early eighties, there was a long period during which the federal funds rate was in the double digits. On Wednesday, the Fed raised that rate for the first time since 2008—to a range of 0.25 to 0.5 per cent. The rate is still much lower than its historical average over the past couple of decades. And the interest rates that regular people pay on things like mortgages are influenced by a number of factors beyond the federal funds rate. So why is the rate increase such a big deal? One reason is simply that it was so long in coming. Another is because of its symbolic value: finally, the Fed believes that the economy has recovered enough from the recession that it can withstand an interest-rate hike without damage. Of course, we’ll have to wait till next year—or later—to see if this assumption is true. With the global economy suffering because of the eurozone crisis and a slowdown in China, the U.S. economy may yet prove to be fragile.

  1. Greece’s economy started growing again—and then shrank.

Speaking of the eurozone crisis—it reached a turning point this summer, when Greece agreed to a new round of intense austerity measures in exchange for a third bailout from international creditors. For those who haven’t been watching the back-and-forth closely, it might come as a surprise, in the context of the crisis, to see that the country’s economy actually expanded—if barely—in the first and second quarters of this year. But, in context, it makes sense.

Here’s what economists believe happened during that period. There were so many questions about Greece’s future—would it be pushed out of the eurozone? would banks be shut down?—that Greeks felt that it would be wiser to spend their money than to let it sit in their bank accounts. Then, at the end of June, as tension between Greece and its creditors deepened and raised concerns among investors, the Greek government announced that it would temporarily shut its banks and enact capital controls—restricting cash withdrawals and transfers—to avert economic collapse. Not surprisingly, those measures put a damper on the nationwide spending spree, which helped lead the economy to contract in the third quarter. This situation wasn’t helped when the country suddenly found itself on the front lines of a rapidly escalating refugee crisis, with migrants streaming in from Syria and elsewhere—on their way, they hoped, to more prosperous parts of Europe.

But Greece’s situation could start to improve before too long. Though unemployment remains high—close to a quarter of Greeks remain jobless—the economy is doing better than some experts had predicted. It’s projected to shrink in 2015 and 2016 but return to growth the following year; the European Commission attributes this to “a rebound in confidence, the stabilization of the financial sector following the banks’ recapitalization expected at the end of 2015, and the consequent re-launching of investment and privatization projects.” This matters because it suggests that earlier doomsday predictions about the ramifications of Greece’s troubles for its people and for Europe’s economic system—that Greece would collapse, that the whole concept of the eurozone was doomed, etc.—might not come to pass. At the same time, Greece’s crisis will leave a long-term mark on the continent, as policymakers use the experience to inform changes in economic policies meant to prevent future crises from escalating as Greece’s did.