Reading the headlines, you might think the world is going to hell in a handcart.

Once again there is carnage in global financial markets. Western Europe has no solutions to its greatest migration crisis since World War II. And the world is gripped by fear of yet another global pandemic (a little too hot-on-the-heels of the last one for anyone’s comfort).

Tucked away in the South Pacific, we may feel a little out of the firing line. But with the dramatic fall in dairy prices and crippling Auckland house prices, isn’t New Zealand also standing in line on the road to the inferno (though perhaps toward the back of the queue)?

Is the world really descending into darkness? Has it become more dangerous, more unequal and downright less desirable? Or is there an alternative view?

Judged against the past, there are many good reasons for believing the world today is not history’s poorer cousin. Indeed, there may be more grounds for optimism today than at any time in the past.

Here are my top five reasons for thinking the glass is more half full than half empty.

The cup runneth over …

First, poverty. Late in 2015 the World Bank was confident enough to forecast the proportion of people living in extreme poverty globally had fallen below 10%. What is most remarkable about this percentage is that In the 1950s it was close to 40%.

By the new millennium, this percentage had dropped by more than half to 18%, despite a doubling in the world’s population from the 1950s to the end of the 20th century. The UN has estimated poverty reduced more in this 50-year period than in the previous 500 years. 

Though that still left a huge number, the trend has continued. In the first 15 years of the 21st century, it nearly halved again. By any measure, this is a remarkable achievement. 

The second reason for optimism: The world has never been more prosperous. Global GDP is estimated to have risen 3% in 2015 to a little over $120 trillion. And though the rich got richer, worldwide the gap between rich and poor countries continued to narrow. 

Media images suggest the world in 2016 is not that peaceful. But it never has been. Yet, the world is more peaceful this decade than at any time in history. We are living in an era academic Stephen Pinker has described as the “New Peace.” This is a third reason for optimism.

Fourth is the price of oil. Though Opec and global stock markets may be lamenting its collapse, this is great news for consumers. Net importers of oil represent a bigger proportion of world GDP than the net exporters. And for the net importers (like New Zealand), low oil prices make us better off.

The Economist Intelligence Unit estimates that every 10% drop in the price of oil raises global GDP by 0.2%. And the price of oil nearly halved in 2015. Recent efficiencies in shale oil production and rapid advances in solar energy efficiency must surely mean low oil prices are here to stay. This is great for consumers and great for global economic growth.

Rounding out the top five is the fact that we are also living longer. A study released last year in The Lancet showed global life expectancy has increased six years since 1990. And this is not just in the prosperous West. Over the past decade and a half, life expectancy in Africa has increased by an average of eight years.

… or is it emptying?

If you have got this far, you might agree there has been no better time to be alive.

Unfortunately, the good luck could run out. A perfect storm is brewing. It is fed by a combination of crippling public sector debt, declining GDP growth in China and (paradoxically) the impact of falling oil prices on oil exporting nations.

And unlike 2007, emerging markets now also suffer from the debt disease. They will not be the West’s saviour this time round. It is no wonder the world’s financial markets have started 2016 in a downward spiral.

With interest rates near or below zero, even after massive quantitative easing, many central banks are in no shape to tackle the impending tempest.

More to the point, far greater structural reform will be needed from the US, Japan and other major OECD governments if the world is to escape its debt trap.

In his book The Great Degeneration: How Institutions Decay and Economies Die, Harvard historian Niall Ferguson has called the debt affliction “a betrayal of future generations.”

Borrowing against tomorrow to pay for today. And its injustice is compounded by the asset bubble this has created, pricing future generations out of the housing market.

As Greece, Spain and Portugal have demonstrated, escaping the debt trap is a profound challenge for the existing social and political order. In 2016, this is a grave risk.

The macroeconomic challenges need microeconomic reforms. As New Zealand found in the 1980s and early 1990s, structural reform is politically hazardous. But, as the IMF warned Japan last year, so too are the costs of doing too little.

Reform is also needed in New Zealand. Changes to planning laws are needed to ease the pressures in the housing market. In the education sector, Tomorrow’s Schools is not providing the skills for tomorrow’s jobs.

The failings in the education system contribute to levels of poverty and deprivation that challenge civil society. Despite the welfare state, too many are being left behind. Change is needed here, too.

It is said the road to hell is paved with good intentions. In 2016, political leaders need to be more than well-meaning: they need to make sure they steer us away from the abyss.