Dim forecast for world economy, says experts

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Dim forecast for world economy, says experts

Dubai - In the pursuit for global economic supremacy, the competition between the US and China will be sharpest.

by

Angel Tesorero

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Published: Thu 13 Dec 2018, 8:16 AM

Last updated: Thu 13 Dec 2018, 10:21 AM

Leading political and economic experts have brought out their crystal ball and the forecast for the world economy and politics next year is dim, characterised by global economic slowdown and political tensions in world centres.
The good news is that there will be no major blowups, although the world economic growth is not aligned with the political situation, according to Ian Bremmer, one of the speakers at the Arab Strategy Forum held in Dubai on Wednesday.
Opening the one-day summit, Bremmer, founder and president of global political risk research and consultancy Eurasia Group and author of several books on politics, said: "There is a negative political trend that we've never experienced before. But I don't worry that it will explode in 2019. The (global) market will continue to be rational.
"When the next downturn comes, however, we will have a problem. It will not be like the 2008 recession - where the response of all major economies was to work together. There were economic stimuli and bailouts that avoided depression," he added.
"Whenever the next downturn comes, probably in 2020, the political reaction will not be like in 2008 and 2009. There will be blaming - the US will blame China; Italy will blame Germany - there is no political resiliency," Bremmer emphasised during his talk titled 'Megatrends in 2019'.
In the pursuit for global economic supremacy, the world's two leading superpowers will be at loggerheads and it will be in technology that the competition between the US and China will be sharpest.
Bremmer noted that China is not just the world's second-largest economy but is also rapidly advancing as a technology superpower, despite being accused of stealing intellectual property from the US.
Citing the roll out of 5G in 2020, as an example, Bremmer noted that both countries have different versions of the fifth generation of cellular mobile communications.
"The US will tell its allies not to use Chinese technology but China will tell the countries it is investing in, under its Belt and Road Initiative (BRI), that they should use cheaper Chinese version of 5G," said Bremmer, adding that "this (rivalry) will fragment the global economy".
He also noted that China is willing to spend more to boost its rising power, including its increasing military foothold in African and Asian countries.
angel@khaleejtimes.com


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