Shifting Power and Influence

We look at the contextual global view of how economic power is changing, which countries and regions such as China and India are on the rise, which, such as Europe, are on the decline and also consider the pivotal role of the US.

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Fundamental changes in international trade will see western markets weaken in the face of challenges from the world’s emerging economies. If the direction of these changes is generally accepted, the scale and speed in which they will occur is still a matter for speculation. The Future of Trade, casts an expert eye over how markets might change in the next decade.

We are almost certainly following a path in which the old structures, created by the US and Europe after the Second World War are no longer what the report calls “fit for purpose.”

Asian economies, propelled by a rising middle class and a youthful workforce, are already both influencing world trade and international diplomacy. Edging closer to a seat at the top table, thanks to a wealth of natural resources, are likely to be Africa and Latin America.

Any calculation about the future must also take into account the speed of technology. The new networks of trade, connecting like-minded individuals, extend well beyond national boundaries. Advances like 3-D printing bring new opportunities for manufacturing and will influence how and where we trade. It makes for a future that is exciting but also uncertain.

Some will fare better than others. China, responsible for a quarter of the world’s GDP over the past decade, remains a major force. Its hunger for resources is a major factor in export markets from Australia to Brazil. Some believe the Remnimbi could replace the US dollar as the world’s reserve currency; others see increased influence but not domination. India also has massive potential if it can solve its problems of a sagging infrastructure and deep-rooted corruption.

China’s great rival, the United States, benefits from a massive internal market that reduces its reliance on global trade. With the US increasingly moving towards energy self-sufficiency, and decreasing appetite for foreign intervention following Iraq, many fear increased volatility in regions where American power once predominated.

Download the Whitepaper

For the last 12 months DMCC, the authority on trade, enterprise and commodities in Dubai, has teamed up with FutureAgenda on an odyssey to discover the future of global trade. We gathered industry leaders, academics and experts in five key cities to discuss how global trade will change in the next decade and how it will drive the global economy into the next phase of growth.

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Shifting Power and Influence – Gautam Sashittal

What Will Follow the Euro?

There is general consensus that the Euro experiment has had its day. Some see potential fragmentation into a multi-currency free-trading block will lead to the reduction of European influence on the global stage. Certainly in Asia many believe broadly that there are three possible options. First the Euro will be split in two, probably on a North and South divide; second, a couple of major former currencies will be reintroduced, or third, there will be a complete re-fragmentation of the euro zone into individual national currencies and economic interests. In the US opinion leaders were more prosaic suggesting that the region will muddle through continuing, certainly in the medium term, to struggle with ‘disappointing growth, high unemployment and persistent sovereign debt issues.’ Few in Europe continue to hope for a global leadership role…Europe’s days in the economic sunshine are, in the opinions of many, in relative decline.

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India a Long-Term Bet to Ride High

India is still a tricky place to do business. Many prefer to see it as a long-term bet which will ride high on a highly connected Indian diaspora and a number of very progressive business leaders. The current government has certainly big ambitions. It is aiming to double India’s exports of goods to $900 billion a year by 2020 and is using its Foreign Trade Policy to integrate government initiatives such as ‘Make in India” and improve India’s share of global trade from 2% to 3.5% by 2020. HSBC sees that the UAE’s growing role as a regional trading hub will make it India’s top export destination by 2030. It makes sense, the UAE and India have strong historical commercial and cultural links.

With 1.3bn people and its growing middle class, little need for military expansion to secure resources and many leading edge service businesses, few doubt that in the end India has the potential to be the world’s #1 economy.

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For us, understanding how trade is going to move ten years from now is very very important so we can try to figure out how Dubai and DMCC figure in this global trade which is today worth about $40 trillion.

Gautam Sashittal
CEO
DMCC

Key Facts

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40%
The amount of the world's copper production currently consumed by China

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The quantity of global GDP growth over the last decade attributed to China

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The size of Africa's workforce, which is estimated to be the largest in the world by 2040

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GDP projections to 2025 ($USDtn)
28 United States
27 China
6 Japan

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33%
South-South trade is likely to account for over a third of global trade by 2025

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40 countries
need to collaborate for One Belt One Road trade route to work

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Our Partners for Future of Trade

Download the Whitepaper

For the last 12 months DMCC, the authority on trade, enterprise and commodities in Dubai, has teamed up with FutureAgenda on an odyssey to discover the future of global trade. We gathered industry leaders, academics and experts in five key cities to discuss how global trade will change in the next decade and how it will drive the global economy into the next phase of growth.

Download pdf

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