Conference Presentation, Panel
2014 London Summit - Global Overview: Geoeconomics vs. Geopolitics
Milken InstituteMarisa Drew, Mo Ibrahim, Anne Richards, Nirmala Sitharaman, Alexander Yakovenko, Francine Lacqua, Mike Clowden
- The Milken Institute London Summit will occupy its current location only until its final year, after which Salesforce will reclaim the building and the event space will be rebuilt; the program is scheduled to begin immediately with a full lineup, incorporating a new app to enhance participant productivity.
- India's new government plans to prioritize manufacturing and investment through open policies and a corruption-free environment, with a financial inclusion program launched on August 15th having already reached nearly 7 crore people to drive massive growth in small and micro businesses.
- By 2030, India and China are expected to dominate the world economy, with emerging markets collectively holding a global share above 50%, although India's demographic advantage is projected to last until roughly 2040 while China's demographic dividend peters out from 2015.
- Geopolitical tensions are anticipated to persist as a new norm, manifesting as increased market volatility, a return of Cold War-style standoffs, and rising extremist and populist forces in Europe, particularly in Greece where youth unemployment could reach 30-40%.
- Global economic risks include unlevel regulatory playing fields, the fading belief that monetary policy alone can stimulate the real economy, and a continued or imminent end to quantitative easing that emerging economies struggle to absorb.
- The European economy faces significant hurdles, including a revival that may require three years of delayed monetary policy implementation, a reluctance by core nations to undertake structural reforms, and political risks that may exceed those in emerging markets due to a lack of unity.
- China is expected to be involved in disputes with almost every neighbor, creating global instability alongside an increase in ungovernable spaces in the Middle East, while the G7 is projected to have less purchasing power parity than seven emerging nations including Brazil, India, Indonesia, and Russia.
- Ukraine's economy is forecast to face significant drops potentially exceeding the official figure of 10%, necessitating a transitional period costing billions, while global cooperation on cybersecurity remains difficult due to national interests in maintaining military and intelligence secrets.
- Financial market dynamics are shifting as bank lending to SMEs shrinks further due to Basel III requirements, likely causing an explosion in capital markets to fill the gap, with banks expected to resume SME lending as stress tests conclude.
- The global economy is expected to transition from resource-based to high-tech systems, with low oil prices providing a short-term boost and technological job creation eventually balancing out slowing population growth, though intelligent machines may necessitate a different workforce size in 30 to 40 years.
- Corporate transparency is expected to increase over the next one or two years due to G20 initiatives, leading to the probable end of tax havens and anonymous companies, while the era of "light touch regulation" is considered finished in favor of increased political interference in business decisions.
- Geo-economics is projected to lead geopolitics, with strategy and politics following economic demands, while global inequality is expected to shrink in aggregate despite often expanding within countries during the crisis.