Uae United Arab Emirates Berlin Economic Bulletin
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EMBASSY OF THE UAE UNITED ARAB EMIRATES BERLIN ECONOMIC BULLETIN Nr. 24 | December 2019 Content P. 3 Abu Dhabi’s Mubadala Fund P. 5 Embassie’s Activities P. 6 News Building Arab Strategy Forum Mubadala A second great recession highly unlikely, says new global economic report produced by Arab Strategy Forum, Good Judgement Inc. From a tragic childhood - his father was assassinated when he was 8 years old - Al Mubarak, The global economy is not likely to wit- ture leading up to 2030 – a crucial time who turns 44 in January, has ness another Great Recession-style col- for many Middle Eastern economies risen to become one of the lapse, despite several indicators to the whose visions are set to come to fruition ruling Al Nahyan family’s most contrary in recent months, according by that year. trusted advisers. He’s also chief to a newly-published report by the Arab executive officer of Mubadala Strategy Forum in partnership with ‘11 Questions for the Next Decade’ anal- Investment, a $229 billion state- Good Judgement Inc., the world’s lead- yses 11 major political and macro-eco- owned holding company. His ing geopolitical and economic forecast- nomic situations – or ‘mega-trends’ as broad remit - it even includes the ing institution. the report terms them – and their likely chairmanship of Manchester City consequences to determine where the Football Club - is particularly Titled ‘11 Questions for the Next Dec- world is headed, come 2030. Topics important now as Abu Dhabi ade’, the wide-ranging and far-reach- covered range from the global recession seeks to reduce its dependence ing findings and themes of the report, to the fragmentation of superpowers on oil and Mubadala works to have been discussed in depth by former and Brexit to the Iranian regime and diversify its investments. ministers, decision-makers and politi- America’s anticipated fall from domi- page 3 co-economic thought leaders, including nance, to the emerging US-China tech former US Vice President Dick Cheney, war and the prospective “Splinternet”, at the 12th edition of the annual Arab water scarcity in the region and the Strategy Forum in Dubai on December growing crop of gas fields in the East 9 at the Ritz Carlton, DIFC. Mediterranean region. The ‘state of the world’ style report– Qualitative and quantitative feedback tackles 11 vital mega-trends and ques- and data was garnered for the report’s 11 tions that will define the global social, sections following rounds of discussions political and economic landscape in the on Good Judgement’s platform, with a 10 years ahead. Unlike previous editions, series of ‘ignition questions’ posed to this year’s report looks to predict the fu- “Superforecasters”: 150 experts from Energy diverse backgrounds ranging from po- ings from the ‘11 Questions for the Next After the fall of empires in the 20th cen- litical scientists, economics researchers, Decade’ report. tury, the question lingers over whether scholars, subject-matter experts with countries and blocs will fragment in the professions ranging from finance to in- Based on current global economic per- 21st century. The Superforecasters an- telligence, management and medicine. formance records and data from the last ticipate a 5 percent likelihood that the The ignition questions for each topic 100 years of economic cycles, the report EU will lose 0.5 percent or more of its seek answers to the issues at the heart sought to find out whether the next re- territory or population before 2030, a 2 of major economic change in the years cession will be a repeat of the Global Fi- percent likelihood that Russia or China ahead. nancial Crisis / Great Recession (2007- will, and 1% likelihood that the United 2009) or whether we are likely to see a States will. Though the uncertainties The Superforecasters’ answers serve as return to an earlier pattern of a brief and problems hanging over the United indicators and monitors of predicted economic downturn followed by resur- Kingdom are mainly considered ‘peace- change based on the outlined global me- gent and steady growth. ful’, market volatility and decreased con- ga-trends. sumer confidence could have an impact The report’s Superforecasters said there on the EU’s territory and population in Mohammad bin Abdullah Al Gergawi, is a 76 percent chance that the world will the next decade. The Superforecasters Minister of Cabinet Affairs and The not undergo another Global financial also said that a split or fragmentation in Future, and President of the Arab Stra- crisis similar to the Great Recession of China or Russia, will only occur through tegic Forum, said: “The report provides 2007 in the next decade, citing central a violent disruption. answers to the most pressing questions banks’ improved technological ability today, the consequences of which will to adapt and steer skidding economies Despite being the largest economy in the have a great impact posed on regional out of difficulty. In their analysis of the world since the beginning of the 20th and global policies. It explores a range last 100 years’ of business cycles, the Su- century, the US’s position as the world’s of scenarios that will support the deci- perforecasters concluded that the Great number one is under threat from the sion-makers of today and tomorrow to Recession was an outlier rather than the formation of a multipolar system and guide progress and prosperity for gener- expected norm. the emergence of several countries and ations to come. regions that contribute today to the in- Considering the emerging tendency of ternational community. “Unlike previous years, this year’s re- two, or a group of countries, setting out ports predict the future of the region to establish new regional trading sys- The report claims that there is a 65 per- and the world over the next decade in tems, such as the US-backed Trans-Pa- cent chance that the US will still be the the context of the current events that cific Partnership or the Russian-backed world’s largest economy a decade from will have a major impact. They provide European-Asian Economic Union, the now, and a 33 percent likelihood it will an up-to-date analysis of the increasing report noted that such new trading enti- be second, after China. need for decision-makers to understand ties pose a populist threat to long-estab- future scenarios on which to base their lished global trading systems. The most prominent countries compet- p l an s .” ing with the United States, in terms of It goes on to rule out the possibility of nominal GDP, the report adds, are Chi- As the world’s first platform for forecast- China, Russia or one of the G7 countries na, the European Union bloc, and India. ing geopolitical and economic events, withdrawing from the World Trade Or- And, as the US economy shrinks to the both regionally and globally, and tar- ganisation by 2030, as doing so would size of other countries, it will be less able geting the most influential leaders and cost more than the gains are likely to be to influence other nations of the world. decision-makers in the Arab World worth in the long run. and beyond, the Arab Strategy Forum The Organisation of Petroleum Export- provided invaluable insights from the However, considering the relentless ing Countries, OPEC, currently holds a world’s foremost thought leaders on the pressure on the WTO in the face of pop- share of about 40 percent of the world’s crucial topics addressed in the report ulism, the post-World War II trading crude oil production. But the future of and beyond. There is a list below of the body faces a big challenge in maintain- the organisation and its domination is mega-trends, their related ignition ques- ing its status and platform in the next 10 likely to be called into question, with the tions, and a brief summary of the find- years. emergence of ‘hydraulic fracturing’ and 2 Energy Finance new oil discoveries outside the Middle gion or pose a security risk. The report said is a small, 1 percent chance of a conflict East and North Africa. there’s a risk that offshore gas fields could on the flow of water between Jordan and inflame tensions between nations over dis- Israel, according to the Superforecasters. There is a 90 percent chance that OPEC puted drilling rights, but potential energy Meanwhile, the chance of a conflict be- will supply more than a third of the revenues are worthwhile, and will lead to tween Egypt and Ethiopia or Turkey and world’s crude oil supply in 2030. Howev- a strengthening of the region’s economic Iraq during the next decade will reach er, its fiscal revenue is likely to result in stability, internal stability of the concerned 3%. a decline in its production. Given its re- countries and reduce risk of war. silience and adaptation to multiple chal- The Superforecasters, “overwhelmingly lenges in past decades, including wars, Following signs of regime fatigue in Iran, agree that Israel will remain a nuclear revolutions and global recessions, the coupled with the unrelenting pressure of power, that Iran and Saudi Arabia are organisation is viable in a carbon-free strict US economic sanctions since its the two states most likely to make at- world, but new and innovative adapta- formation in 1979, there has been specu- tempts to join the club. tion measures are needed later, the re- lation that the intensity of the sanctions port pointed out. could lead to a collapse of the Iranian The report warns as a caution that any regime.