Leader: In 2012, we need imaginative leaders with a grand vision

The former US president Harry S Truman once remarked, "Progress occurs when courageous, skilful leaders seize the opportunity to change things for the better." It is tempting to conclude that things have got worse, not better, over the past year precisely because courageous and skilful leaders have been in short supply across the world.

Bankers, rating agencies, financial markets - all have continued to hold sway over the global economy as politicians bicker and fiddle. The US lost its triple-A credit rating after a bout of political brinkmanship by congressional Republicans brought the world's wealthiest nation to the edge of default. As a weak and vacillating Barack Obama struggles to secure support for his jobs bill, it is difficult to disagree with Standard & Poor's description of US governance and policymaking as "less stable, less effective and less predictable" than it once was.

Here in Europe, the "Mer­kozy" obsession with tightening the eurozone's borrowing rules has failed to stem the debt contagion. Like generals fighting old wars, Chancellor Angela Merkel and President Nicolas Sarkozy remain fixated with deficits as unemployment continues to rise sharply. In their ideological embrace of balanced budgets, the Continent's centre-right leaders have been blind to the chief economic lesson of 2011: piling austerity on austerity doesn't work. Growth has stalled across Europe yet leaders have responded - in the form of the Merkozy-inspired fiscal compact - by trying to make deficit spending illegal.

Our own government has contributed little to this debate despite the very real danger to the British economy should the euro collapse in 2012. David Cameron's decision to walk away from December's talks on the future of the eurozone - having deployed the UK "veto" as a sop to restless Eurosceptic backbenchers - was an abdication of responsibility.

Incompetence and impotence have been the defining characteristics of our political leaders over the past 12 months, which were marked by a failure of political imagination and economic vision. Above all, there has been a failure to act in a collective and co-ordinated manner in the face of a global political, economic and financial crisis - and it is not just those on the left who are saying so. "The thing that really brought the world to a better place in 2008," Goldman Sachs Asset Management's Jim O'Neill conceded in September, "was genuine collective action involving both the developed and the developing world through the G20."

Will 2012 be any different? Or will domestic political turmoil exacerbate economic instability abroad? The presidents of the United States, France and Russia (the world's biggest, fifth-biggest and ninth-biggest economies, respectively) face re-election in the coming year. And, as Mehdi Hasan notes on page 19, China, the world's second-largest economy, will embark on a far-reaching leadership transition in the autumn with the commencement of the 18th National Congress of the Communist Party.

We need leaders who can rise above the local to communicate a grand vision, inspire others, energise common action. Where is the 21st-century Roosevelt? Churchill? Thatcher, even? Where is the modern-day Marshall Plan for Europe? Once-in-a-generation crises call for once-in-a-generation solutions. "This is the greatest opportunity, when [the system] is not working; that's the time to redesign the whole thing," the Nobel Prize-winning Bangladeshi economist Muhammad Yunus says on page 32. "Now is the time that we have to discuss the machine."

Without strong, imaginative and inspiring leadership, however, such action will prove impossible in 2012.

This article first appeared in the 02 January 2012 issue of the New Statesman, And you thought 2011 was bad ...