Tuesday , July 5 2022

The global economy is changing


Mohammed Suleiman Al-Ankari

Three decades ago at the latest, there was no expectation that China would be the second largest economy: this ranking was in favor of Japan, followed by Germany, while China was far behind, but this change in terms of Gross domestic product is not the only change. But there are many changed variables and the future will radically change the face of the global economy during this century and the first half in a specific way.

With the communications revolution and the transition to the modern knowledge and technology economy, industrial and financial companies are no longer the largest in terms of their market value. Technology companies occupy this position and some overcome the $ 1 trillion barrier such as Microsoft, Apple and Amazon, but the changes that began to be established will be key in the economy. Global is the growing number of digital currencies and the great development of the Block-Shin technology that helps to use these currencies is at the moment the tendency that companies like Facebook are known to launch digital currencies, where it announced its intention to launch a denominated currency "Pound", which opens the way American companies have announced that they are afraid of Libra's impact on the dollar and its global position: if the digital currency is spread and spreads, the role of the main Central banks will be reduced and current currencies will be converted. What is the global cash reserve of all countries with a risk of loss of value and importance, unless the situation improves and begins with the digital transformation of their currencies.

What will accompany the change of digital currency in the future will remain unknown How will the countries deal with them and how will the decision-making of central banks be made? Will it undermine its role in controlling monetary policy? The growing concentration of wealth, reserves and production of goods and services, as well as the volume of imports of emerging economies such as China, India, Brazil and others, will make the balance of power affecting international trade, As well as the supply and demand for international products such as oil, it will radically change, although this is evident in terms of growth in consumption in these countries, but with the rise of the middle class in these countries, the Demand will be concentrated and will be supported by the strength of the domestic consumer and not by the demand of current manufacturing and export, which will change a lot with the weight and value of the dollar. As well as an important reserve currency for significant control of the international market at the moment.

The first half of this century, that is, during the next three decades, the world will witness a rapid change in the foundations of the economy, to which the world is accustomed to the type of currency it treats, which represents the main reserve for other countries that does not change the size of the demand for goods and services, the volume of wealth and the technologies that will manage the world economy through artificial intelligence. It will change the concept of global competitiveness as well as the appearance of a new force for large companies that will coincide with the strength of the countries when they become the currency issuer and will play the leading role in the management of countries, as well as the laws that regulate international trade and even the norms that apply in the countries Adapt to the interests of these companies, and not vice versa as it now exists in general.

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