It is difficult to develop an exhaustive list of the major trends that will define the 2020s because frankly speaking, no one has a crystal ball to predict what is in store. However, I want to focus on four major developments that I suspect will define this decade – geopolitical risks, competing capitalisms, technological forces and the continued rise of Asia.
Regional instability in the Middle East, United States (US)-China tensions, frictions on the Korean peninsula and cross-straits anxieties between China and Taiwan are likely to dot the global geopolitical landscape this decade, just as they did in the last decade. In Europe, the risk of a no-deal Brexit or even a hard Brexit is now a remote probability. However, attempts by the UK to decouple from the European Union (EU) might be messy because untangling close to 50 years of a relationship can never be a straightforward exercise.
On the issue of capitalism, with very few exceptions, it has emerged as the most dominant form of economic organisation in the world for which there is no historic precedent. However, there is now a four-way fight for the soul of capitalism that is likely to be a defining theme of this decade. On the one hand, there are the competing versions of capitalism – one Western and the other Chinese. Writing in the January/February 2020 edition of Foreign Affairs Journal, Branko Milanovic makes a distinction between the meritocratic form of capitalism which dominates in Western Europe, North America, India, Indonesia and Japan, versus the state-led, political model of capitalism, which is exemplified by China but also surfaces in other parts of Asia (Myanmar, Singapore, Vietnam), in Europe (Azerbaijan, Russia), and in Africa (Algeria, Ethiopia, Rwanda). On the other hand, Klaus Schwab, also writing in Foreign Affairs, makes a distinction between “stakeholder capitalism” – one that actively meets social and environmental goals versus “shareholder capitalism” – one that places a premium over short term profits. This tension within capitalism will shape the global economy this decade, but for now, there is no clear winner.
The internet of things, artificial intelligence, mobile wallet solutions and digital currencies – these technological developments will continue to take shape this decade and significantly alter the way we socialise, conduct business and organise our lives. However, as the World Economic Forum (WEF) has highlighted in its recent Global Risk Report 2020, the promise of a more technologically savvy world can be undermined by unequal access to the Internet, cyber insecurity and a more fragmented cyberspace with different approaches to internet governance being promoted by the US, China, Russia and the EU.
In Asia, while downside risks are ahead for China, it appears that this will do little to dampen the region’s economic dynamism. According to Praneeth Yendamuri and Zara Ingilizian of the WEF, in 2020, Asia’s Gross Domestic Product (GDP) is set to overtake that of the rest of the world combined; by 2030, the region is anticipated to contribute approximately 60 percent of global growth; and it will also be responsible for 90 percent or roughly 2.4 billion new members of the middle class entering the global economy.
For policy makers and business people in the Caribbean, these developments are important because they will define policy making and commercial decisions well into the future. Geopolitical risks tend to transcend borders and impact economic and political stability far from their places of origin. For example, an unfavourable development in the Middle East will create energy volatility in distant shores, including the Caribbean. We also have an opportunity to choose the version of capitalism we will subscribe to, whether a more winner-takes all approach or one which prioritises a more equitable and responsible distribution of resources. Regarding technological developments, the opportunities are endless, but to capitalise on these opportunities, we will need to take a giant leap with respect to our regulatory frameworks, investments in digital infrastructure and the development of our human resources. Finally, the growing dynamism of Asia suggests that it is a region that we cannot ignore and as such, we will need to forge more people-to-people contacts with that region and reorient our trade policies and economic partnerships toward Asia.