TECHNOLOGY, NATURAL RESOURCES CONTRIBUTE TO GLOBAL MARKETPLACE
by Caitlyn Jones, ©2016
(Oct. 25, 2016) — While 2016 is likely to be remembered for political stories and conflict, the changing nature of the world economy should be regarded as one of the biggest news stories of the year. A wide range of factors have created a volatile market leading to falling prices for assets and equities.
Some of the major issues that have caused unrest in the market include concerns over the Chinese economy, doubts over the future growth of the US economy, worries of increased tensions in the Saudi and Iran conflict and a fall in oil prices. Add this to the impact of the Brexit decision from the UK’s EU referendum and it becomes clear the global economy is one with serious fears about a credit crisis and instability in leading markets.
However, threats and risks in one area represent opportunity in other areas and this is why there are a number of emerging and developing economies around the world. This means that the list of leading global economies today is likely to look very different by the year 2020.
Leading global economies in 2016
A quick review of the leading global economies in 2016 would suggest that nations like Brazil, China, France, Germany, India, Indonesia, Japan, Russia, the UK and the US will lead with respect to purchasing power parity (PPP).
While around half of these nations are located in the western market, nations like China, India, Indonesia, Russia and Brazil can all be described as emerging market economies. By the year 2020, it is likely that more emerging market economies will be vying to join the list of top economies from around the world. One country that is tipped to become one of the leading economies in the world is Mexico.
A combination of the negative impact of the worldwide financial crisis of 2008 and 2009 on the advanced countries, a slower rate of growth in the advanced countries and a faster rate of growth in economies like China and India have led to a levelling of the gap between established economies and emerging nations.
It’s not as if this is a new phenomenon in the global marketplace. One of the leading factors in Japan’s post-war development was that they were able to draw on the experience, machinery and practices of established economies. This sped up development significantly and, allied with a dedicated workforce, turned the Japan into one of the world’s major economic powers.
China
China may already be classed as the leading economy in the world in 2016 by some people but by 2020, the International Monetary Fund (IMF) and many industry analysts are in agreement that the nation will become the leading economy in the world. This may come as early as 2017 and China’s position as an economic super-power looks set to continue for years to come.
There have been many examples of leading firms driving China’s economy forward, with one such firm being Noble Group. The company, led with distinction by CEO Yusuf Alireza, who has since left pursue new and exciting challenges, made it into the Fortune 500. Alireza’s work in shifting the focus of Noble Group and obtaining refinancing played a major role in the emergence of the firm.
India
India has been tipped to overtake Japan with respect to size of the economy and the nation may become the third biggest economy in the world, behind China and the US by 2020. The youthful and quickly-growing population is a big factor in India’s development; as is their deployment of technologies and machinery taken from around the world. This mimics the development of Japan in their post-war development.
Mexico
A range of analysts have tipped the Mexican economy to become a significant feature in the global economy by 2020. Being located next to the US is a massive bonus which provides an ideal starting point for economic growth and with improving trade and business deals with the US, Mexico should become significantly stronger. Add in a population that is growing quickly and you have strong factors for economic development.
Russia and Brazil
Both of these nations have a huge potential for growth. While the two nations are culturally different, they are both huge exporters of energy and natural resources. While there are some concerns over a lack of diversity leading to a stilting in the potential for Russia’s economy, there is still belief that the economy will grow and prosper.
While the world economy in 2020 will see many familiar names at the top of the list, the continued appearance of emerging economies indicates the changing nature of the world and the financial markets.