Politics-economics divide could impact global growth
DOHA: Doha Bank hosted a knowledge sharing session on “Changing International Dynamics on Foreign Policies and Allied Opportunities” on January 29 at Doha Bank Tower Auditorium. The Chief Guest was Ranjan Mathai, former Indian Foreign Secretary and Indian High Commissioner to the UK.
Dr. Mehran Kamrava, Director of the Center for International and Regional Studies Georgetown University also spoke at the event. The event was attended by diplomats and senior staff from major corporates in Qatar.
Speaking at the event, Dr. R. Seetharaman, CEO of Doha Bank gave insight on the current global scenario. He said “According to IMF Jan 2017 global growth is expected to be at 3.1 percent. Advanced economies are now projected to grow by 1.9 percent in 2017. Emerging and Developing economies growth is currently estimated at 4.5 percent for 2017. We need to anticipate what policy shifts could do for the world’s economic outlook.
There are risks associated with political uncertainty, trade frictions and adverse effects of a rising dollar. The capital rules for banking sector getting redefined and the financial markets are getting more volatile on account of the changing dynamics. Contentious issues are coming between developed and developing world on global trade and investment.
The lack of convergence between politics and economics could impact global growth. Today, there are 2.5 billion internet users. The digital economy is “the single most important driver of innovation, competitiveness and growth”. We need to give people the tools to help them thrive in the digital economy. We’re entering a new stage of international global relations where national policies could shape how globalization eventually develops.”
Ranjan Mathai gave insight into current global scenario and the changing diplomatic dynamics. He stated that the theme chosen for the evening was the right one in the light of the transformational changes that emerged in 2016. He described how the changing diplomatic interplay between the major powers of the world could lead to a new world order.
In this context Mathai reflected on the debate regarding the pros and cons of globalization and the prospects of how policy shifts could affect the global economy.
The dynamics of the key relationship between the US, China and Russia would have great influence over the course of many international relationships involving Japan and South East Asia, India, Europe and West Asia.
He noted the continuing US primacy in the World economy – citing its large share of the market capitalization of world bourses and its continuing role as safe haven for investors during period of uncertainty and change. He noted that China’s extraordinary rise in the last 3 decades made it a beneficiary of the globalization policies.
China is at an interesting phase with historically high growth rates, low slowing, persistent dependence on investment and slow transition to a consumption/ services driver economy. China is nevertheless demonstrating confidence in its leadership as reflected in the Davos Summit, its creation of the Asian Infrastructure Investment Bank (AIIB) and its strategic development of the One Belt and One Road etc.
Mathai also spelt out the implications of change in Russia and the EU. The US questioning North American Free Trade Agreement (NAFTA) now had to decide on the future of North Atlantic Treaty Organization (NATO). This would create alternate scenarios in Europe, which also faced a decisive year with the forthcoming elections in France and Germany capable of changing the EU as we know it.
He felt the Brexit policy of the government would go ahead; concomitants Britain would back out to build stronger relationships in the Gulf, South Asia and Africa. The rapid growth in India, Bangladesh, Sri Lanka and other countries in South Asia is fueling change in the subcontinent’s external ties.
The Gulf region in particular, UAE, Qatar and Saudi Arabia would have stronger ties with India. Mathai concluded by saying that nationalism which was now on upswing, would be in balance in years ahead since nationalism could not solve problems of unemployment, industrial decline etc as anticipated.
Sooner or later there would be a need to push for a renewed world order based on cooperation on trade, investment and tracking global problems such as climate change.
The allied opportunity in the current scenario are for countries and societies to position themselves to take advantage of change, and to invest in their economic and human resources. They would be well placed to influence the emerging world order.
Dr. Mehran Kamrava gave insight into the key developments in the middle-east region and the shift in Qualitative Power since early 2000, with new actors emerging. He also gave insight on role of Qatar in last decade. He highlighted the efforts of Iran to integrate with nations and measures such as Iran Nuclear deal.
The Vote of thanks was given by Mr. Frank Hamer, Head of International Banking Group, Doha Bank which was followed by a Question & Answer Session
Prakash M Swamy