Panel
Asia Summit 2015 - Global Risk
Milken InstituteBok Jaramic, Voke, Professor Huang, Pranath, James McGormack, Ivan Vasco, James Lee, Geng, Professor Wong
- Global risks are projected to create cascading effects that undermine trust and complicate collaboration, while geopolitical and geoeconomic factors are expected to merge into a dominant single category as global governance institutions fail to cope with the pace of change.
- Economic trends over the coming few years are anticipated to depend heavily on the evolution and interaction of friction theaters in Europe, the Middle East, and the Asia-Pacific, with the UN remaining relevant despite shortcomings and a lack of recent reform in the World Bank and IMF.
- The South China Sea is expected to remain a management issue rather than a solvable legal dispute due to overlapping claims, with U.S. credibility contingent on its ability to stand against China, while U.S.-China relations are viewed as the deciding factor for managing global problems.
- Engagement with Iran carries a risk of providing resources for destabilizing measures, with the Middle East potentially reverting to 1980s-style Sunni-Shia conflict dynamics and ISIS expected to continue destabilizing the Near East for the coming years.
- Structural low energy prices are forecast to persist, marking a shift from peak oil to peak demand, which will subject oil-dependent nations like Venezuela, Nigeria, Saudi Arabia, Iran, and Russia to political volatility and necessitate rapid economic diversification.
- A major financial crisis is predicted between 2018 and 2020 driven by the maturation of $5.8 trillion in shale debt, while rising longer-term interest rates could render foreign currency bonded debt in emerging markets unsustainable, a trend that has already seen such debt rise from $1 trillion in 2010 to $1.8 trillion in 2015.
- China is expected to experience a gradual glide to slower growth rather than a hard landing, though the implications of a sharp slowdown are amplified by its $10 to $11 trillion economy, and Southeast Asian nations face risks of a middle-income trap as China transitions its growth model.
- Europe is expected to face permanent demographic dislocation and worsening refugee flows, with Germany anticipated to host 1 to 2 million new refugees in the coming 12 months, potentially leading to political fragmentation, the suspension of Schengen, or Grexit/Brexit if burden-sharing fails.
- Visa-free mobility based on nationality is expected to erode over the next five to ten years as individuals are required to provide increasing personal data for travel, while the EU is projected to see policy divergence rather than a unified standard for handling migration.
- The AIIB is expected to succeed based on China's infrastructure track record and pressure from 56 member countries, run with domestic anti-corruption oversight distinct from a business bank model, and is anticipated to play a more active role alongside the Iran deal in resolving regional crises.
- Demographic aging is expected to limit consumption-led growth in Asia, yet the U.S. and China are projected to lead a third wave of modernization in solar and wind power without relying on developed country subsidies, and positive energy innovation trends are expected to occur regardless of diplomatic climate agreements.
- Low commodity prices are anticipated to fuel a new investment super cycle over the next 10 years, offering infrastructure funding opportunities for populous nations like India, Pakistan, and Indonesia, while the Paris Treaty commitments face a test of enforcement similar to the Kyoto Protocol.
- The refugee crisis in Europe is expected to worsen as the situation in the Middle East deteriorates, with developing modernization and stability in North Africa and the Middle East identified as the only constructive long-term solution to reduce migration.
- The ASEAN Economic Community is expected to be formed by the end of the year to generate more regional markets, while global financial crises are predicted to resemble the 2008 event due to persistently high public and private debt levels, particularly as the U.S. and China take on the major task of maintaining stability in the next five to 10 years.