World Government Summit opens
DUBAI 11 February 2019: Delivering a sober outlook for global trade to an audience of international policymakers, Nobel Prize Laureate economist Paul Krugman found little to be optimistic about amid a growing backlash against globalization.
In a World Government Summit session on ‘Global Trade: Future Foresight and Analysis for Governments’, the esteemed academic noted there is “quite a good chance that we will have a recession late this year or next year.”
Citing a general lack of preparedness among economic policymakers, he said: “The main concern has always been that we do not have an effective response if things slow down … we do not seem to have a safety net.”
Global Economy = Titanic
He further noted that central banks often do not have the tools available to insulate against market turmoil, and planning for risk has been minimal. Instead, trade wars and growing protectionism continue to dominate policy agendas, deferring attention and resources from what should be the real priorities. “I do not see the iceberg out there, but if we do hit one, I know for sure this liner is not unsinkable,” Krugman said, referring to the state of the global economy to that of the Titanic.
Krugman described a landscape in which stagnant wages, growing inequalities, and a loss of confidence in the world’s business leaders have created a spirited populist backlash against globalization. “The result is clear: Forward motion on globalization has stopped, but it was slowing anyway.”
He noted that people feel that they have been short changed by the last generation of economic growth, but the consensus around the problem is not mirrored in discussions of the solution. “The question is what they want as the solution … turns out that’s not as clear”, Krugman said, pointing to the gap that leaders must fill in order to avert the next Great Depression.
Running against the current, Krugman also shared his skepticism for the promise of the Fourth Industrial Revolution. “Technological change is actually relatively right now,” he said.
He also warned against the calls of an impending ‘labor Armageddon’ at the hands of increasing digitalization. “This is not a transformative revolutionary era,” the economist pointed out. Going against the grain, Krugman declared that despite the technological advances in the last 25 years, the way we work has not changed all that much.
Closing on that note, Krugman leaves world Governments with food for thought as they consider charting a course through the uncertainty of global markets.
The seventh session of the World Government Summit kicked off yesterday morning in Dubai with the participation of more than 4,000 people from 140 countries, including heads of state, ministers and officials who will gather to redefine the future of governments and unite efforts to shape the future of the world.
The summit will include 600 speakers ranging from heads of states, top thinkers, leaders and delegates and 30 international organisations. Additionally, 20 reports with the latest figures, studies and data will be published during the summit to help decision-makers and officials formulate future strategies.
World-famous speakers are participating in more than 200 interactive sessions on vital sectors that will shape the future of humanity, from climate change and fiscal policy to government service innovations and post-conflict social reconciliation.
The summit will see the attendance of almost 100 ministers from around the world, with more than 120 presidents and officials from leading international companies all joining forces to address the issues of today and tomorrow on the global platform of WGS 2019.
The three-day World Government Summit 2019 runs until February 12 at Madinat Jumeirah in Dubai.