摘要：Asthe world economy grapples with low growth and high debt levels, what are the major variables that will affect economic growth i

As the world economy grapples with low growth and high debt levels, what are the major variables that will affect economic growth in the new year? How do they differ across countries and regions?

NAKAO Takehiko

Former President, Asian Development Bank; Former Vice Minister of finance, Japan; Chairman, Center for International Economy and Strategy (Tokyo)

In the history of humanity, there have been always uncertainties, including most difficult ones such as wars, famine, and pandemics. But we are now facing many challenges which most of us in the international community have not expected lately.

The war in Ukraine and the crisis in the Middle East are imminent threat to the global community. They also have dire impacts on global supply chains, and energy and food prices.

Countries are worried about what kind of policies will be actually taken by the second Trump Administration in terms of diplomacy, trade/tariff, fiscal and monetary policies, immigration, climate change, regulations regarding IT, information, finance and energy, and the basic question of how the government should be managed. For instance, raising tariffs will be a complete departure from the idea of multilateral liberal trade system which has been a basis of global growth and international cooperation in the post-World War II period. It can invite inflation in the US itself, disruptions of existing supply chains, and possibly retaliations by trading partners, and hence fragmentation of trade and investment.

In the global economic area, directions of fiscal and monetary policies in many countries which were expanded substantially due to the Covid 19, and in the aftermath of the Global Financial Crisis, are also an important issue. It has substantial implications on exchange rates and debt issues of emerging economies.

There are many challenges in Asia. An ongoing possible bust of real estate bubbles and debt issues (local authorities, companies, and households) in China can take many years for remedy. At the same time, China has many strengths such as capacity for innovations, a remaining room for convergence, and a chance to convert to a new growth model based on consumption by a broader base of middle class. Although Korea has successfully achieved high income status thanks to continued dynamic growth, its political situation is instable more recently. In Japan, there are some positives sign of getting out of deflation, but weak yen and sustainability of fiscal and monetary policies pose uncertainty aboutthe future. Some other countries in Asia face political instability, middle income traps, and remaining poverty.

In the longer term, structurally, in addition to climate challenge, most of countries in the world are now experiencing, for the first time in histories, a secular decline of population and aging of the society. This means a consistent lower share of productive age population, decline of social vigor and ever-increasing cost for elderly care and medicine. How we adapt our policies and societies to this new reality is a challenge. For it is very difficult to expect the reversal of this trend because the low fertility is based on the change of values; marriage and childbearing are not any more the norm but a matter of choice for individuals.

There are many other structural issues. To name a few, 1) increasing divide within countries according to jobs, living places, education, belief, technologies and globalization, 2) acceleration of digital economies and AI, and needs for caring protection of data, privacy, disinformation and misinformation, cyber-security, competition policies and taxation, and 3) sustainability of democracy which are affected by social divide, social media, and identity politics.

Future of the international order is also uncertain. Are many advanced economies, most importantly the US, heading toward inward-looking and isolationist policies reflecting their social divide, concerns about employment, and issues of immigrants and refugees? What can be the role of the global south countries? Do they have, beside complaints about the existing order, a coherent and consistent idea about how the world should be managed better?

It is difficult to figure out clear solutions. But we can still try to remember several important bottom lines and apply them to the endeavors of tackling global challenges.

First, we should believe in the great achievement of the humanity in terms of better living, peace and freedom. Second, we should pay more attention to equity so that all people in the society can regard themselves benefitting. Third, we should pursue sustainable policies for the global climate, ocean health and biodiversity, but also more seriously for macroeconomic stability (no extreme experiments). Fourth, we should continue to invest in people and keep innovations in technology (including in medicine, food production, and renewable energies) while regulating new technologies well when necessary. Fifth, we should make utmost efforts to pursue cooperations between countries, at least manage the negative emotion, to maintain peace and prosperity (by learning from the past).

来源：博鳌亚洲论坛