THE WORLD ATLAS

Chapter · Age of Globalization

The Great Crash

The world in 2008

In 2008 the world suffers its worst financial crisis since the Great Depression. A boom in risky American home loans turns to bust, and on 15 September the Wall Street bank Lehman Brothers goes bankrupt, freezing credit around the globe.

Governments spend vast sums rescuing banks, stock markets crash, and the world slides into a deep downturn soon called the Great Recession. Earlier in the year, soaring food prices set off protests and riots in dozens of poorer countries, and oil peaks at about $147 a barrel in July before collapsing to near $30 by December. The crisis hastens a shift in global power: in November the leaders of the G20, which includes China, India and Brazil, meet for the first time to steer the world economy. The United States, still at war in Iraq and Afghanistan after the attacks of 11 September 2001, elects Barack Obama as its first African American president. China hosts a spectacular Olympic Games in Beijing, Russia fights a short war with Georgia, Kosovo declares independence, a cyclone devastates Myanmar, an earthquake kills some 69,000 people in China, and in November gunmen attack Mumbai.

Open the map in 2008

The great powers

Region by region

Southern Africa

South Africa's ruling ANC forces President Thabo Mbeki to resign in September, and Kgalema Motlanthe takes over until the 2009 election. Zimbabwe's economy has collapsed into hyperinflation; after a disputed election in March, opposition leader Morgan Tsvangirai pulls out of a violent June run-off, leaving Robert Mugabe in power until a power-sharing deal is signed in September. In Kenya, violence after the disputed December 2007 election kills over a thousand people before Mwai Kibaki and Raila Odinga agree to share power. In the eastern Democratic Republic of the Congo, ruled by Joseph Kabila, Laurent Nkunda's rebels push towards the city of Goma late in the year.

Northern Africa

In Sudan, where the Darfur conflict has driven millions from their homes, the International Criminal Court's prosecutor asks in July for an arrest warrant against President Omar al-Bashir. Somalia's weak transitional government depends on Ethiopian troops against the Islamist al-Shabaab insurgency, while pirates off the Somali coast attack over a hundred ships during the year. Soaring food prices bring protests and riots to Egypt, ruled by Hosni Mubarak, and to Burkina Faso, Cameroon, Senegal and other countries. Military coups topple the governments of Mauritania in August and Guinea in December, the day after the death of its long-time ruler Lansana Conte. Muammar Gaddafi's Libya has restored full relations with the United States, and Umaru Yar'Adua is Nigeria's president.

Europe

Europe is hit hard by the crisis: Britain nationalises the bank Northern Rock in February and pours billions into its other banks in October, and in October all three of Iceland's big banks collapse, wrecking its economy. Kosovo declares independence from Serbia in February; it is recognised by many Western countries but not by Serbia or Russia. In August, Russia and Georgia fight a five-day war over South Ossetia, after which Russia recognises South Ossetia and Abkhazia as independent states. Dmitry Medvedev becomes Russia's president in May, with Vladimir Putin as his prime minister. Angela Merkel leads Germany, Nicolas Sarkozy France, Gordon Brown Britain, and Silvio Berlusconi returns to power in Italy.

Middle East & South Asia

Violence in Iraq is falling after the 2007 US troop 'surge', and in November the two governments agree that US forces will leave by the end of 2011, while the Taliban insurgency grows against Hamid Karzai's government in Afghanistan. In Pakistan, Pervez Musharraf resigns in August and Asif Ali Zardari, widower of the assassinated Benazir Bhutto, becomes president. In November, ten gunmen from the Pakistan-based group Lashkar-e-Taiba attack Mumbai, killing 166 people and straining relations between India, led by Manmohan Singh, and Pakistan. Nepal abolishes its 240-year-old monarchy in May, Bhutan holds its first general election, Iran's President Mahmoud Ahmadinejad faces UN sanctions over its nuclear programme, and on 27 December Israel launches a major offensive against Hamas in Gaza.

Northern & Central Asia

Central Asia's oil and gas states ride high energy prices until the autumn crash: Nursultan Nazarbayev's Kazakhstan, Gurbanguly Berdimuhamedow's Turkmenistan, which he has ruled since Saparmurat Niyazov's death in 2006, and Islam Karimov's Uzbekistan. Kurmanbek Bakiyev rules Kyrgyzstan and Emomali Rahmon Tajikistan. In Mongolia, riots break out in July over alleged fraud in parliamentary elections. Siberia's oil and gas fund a resurgent Russia, but the oil price falls by about three-quarters between July and December.

East Asia

China, under President Hu Jintao and Premier Wen Jiabao, has a turbulent year: protests against Chinese rule in Tibet in March are put down, and the Sichuan earthquake in May kills some 69,000 people. But the Beijing Olympic Games in August showcase China's rise, its astronauts make their first spacewalk in September, and as exports slump it announces a 4-trillion-yuan stimulus plan in November. In Taiwan, Ma Ying-jeou is elected president and opens direct flights to the mainland. South Korea's new president, Lee Myung-bak, faces huge protests over US beef imports, North Korea's Kim Jong-il is reported to have suffered a stroke, and Japan, under Emperor Akihito, changes prime minister from Fukuda Yasuo to Aso Taro in September.

Southeast Asia

Cyclone Nargis strikes Myanmar's Irrawaddy delta in May, killing at least 138,000 people, while the ruling generals at first restrict foreign aid and push through a new constitution in a referendum. Thailand is in turmoil: anti-government protesters occupy Government House and in late November shut Bangkok's airports, until a court dissolves the ruling party and Abhisit Vejjajiva becomes prime minister in December. Indonesia, led by Susilo Bambang Yudhoyono, sees its former dictator Suharto die in January. Malaysia's ruling coalition loses its two-thirds majority in parliament for the first time since 1969, and Gloria Macapagal Arroyo leads the Philippines.

Northern North America

Canada's Conservative Prime Minister Stephen Harper formally apologises in June for the residential schools that took Indigenous children from their families, and wins a second minority government in October. As the recession bites, opposition parties plan to bring him down, and in December he has Parliament suspended to avoid a confidence vote. In November, about three-quarters of Greenland's voters approve greater self-government within the Danish realm, to take effect in June 2009.

Southern North America

The US housing bubble bursts: the investment bank Bear Stearns is rescued in March, the government takes over the mortgage giants Fannie Mae and Freddie Mac in September, Lehman Brothers goes bankrupt on 15 September, and Congress approves a $700 billion bank rescue in October. In November, Democrat Barack Obama defeats John McCain to succeed George W. Bush. Mexico's President Felipe Calderon is waging war on the drug cartels, and more than 5,000 people are murdered in 2008 as violence escalates. Fidel Castro hands Cuba's presidency to his brother Raul in February, and Haiti is shaken by food riots.

Northern South America

Brazil, under Luiz Inacio Lula da Silva, is riding a commodity boom, and huge oil fields have been found deep beneath its seabed. In March, Colombian forces under President Alvaro Uribe kill the FARC commander Raul Reyes in a raid inside Ecuador, and Ecuador and Venezuela move troops to the border; in July, Colombia frees the hostage Ingrid Betancourt and 14 others in a daring rescue. Ecuador's voters approve a new constitution backed by President Rafael Correa, Bolivia's Evo Morales faces violent protests in the eastern departments demanding autonomy, and Hugo Chavez rules Venezuela. In May, South American leaders found the Union of South American Nations (UNASUR).

Southern Cone

Argentina's President Cristina Fernandez de Kirchner, in office since December 2007, faces months of farmers' strikes and road blockades after raising export taxes on soybeans in March. In Paraguay, the former bishop Fernando Lugo wins the April election, ending 61 years of rule by the Colorado Party. Michelle Bachelet is Chile's first woman president, and Tabare Vazquez is president of Uruguay.

Australasia & Oceania

Australia's new Labor prime minister, Kevin Rudd, makes a formal national apology on 13 February to the Stolen Generations of Aboriginal and Torres Strait Islander children taken from their families. New Zealand elects John Key's National Party in November, ending Helen Clark's nine years in power. Fiji remains under the military government of Commodore Frank Bainimarama, who seized power in a 2006 coup, and Michael Somare leads Papua New Guinea.

Events

  1. September 11 attacks; US-led invasion of Afghanistan
  2. US-led invasion of Iraq
  3. Indian Ocean earthquake and tsunami (December)
  4. Kosovo declares independence (February)
  5. Cyclone Nargis strikes Myanmar; Sichuan earthquake in China (May)
  6. Beijing Olympics; Russia-Georgia war (August)
  7. Lehman Brothers collapses; global financial crisis (September)
  8. Barack Obama elected US president; Mumbai attacks (November)

Moments of this period

Wars of this period

More chapters

Sources