Vijay Kumar Gaba

From the events of the past few years, it is evident that the era of peace and global cooperation, which started in the aftermath of two devastating wars in the first half of the twentieth century and flourished after the end of the Cold War in the late 1980s, may be coming to an end.

In my view, the year 2024 will see a new paradigm unfolding in global economic, political, and geopolitical spheres. The new paradigm which would take a couple of decades to manifest fully, may inter alia see multiple axes and alliances emerging in the global order, competing with each other for supremacy. Consequently-

·         Global trade may get fragmented into multiple trade blocs.

·         A new monetary order may emerge that may include separate invoicing currencies for trades within different blocks and a couple of independent currencies for broader international trade. Unsustainable debt of the developed economies could be redeemed in unconventional ways, e.g., currency devaluation, partial write offs, mandatory roll over till perpetuity,

·         The trend in the financialization of economies may reverse. Physical resource ownership and localized manufacturing may become the primary focus again.

·         National boundaries may get redrawn or obliterated due to (i) territorial occupations to gain control of natural resources and enhance geopolitical influence; (ii) more alliances like the European Union, and (iii) voluntary consolidation like Germany.

·         The incidence of war and hostilities may rise.

·         Nationalism might triumph over globalization. Post WW2 global institutions and agreements like the UN, IMF, WTO etc., may become redundant. Migration of labour and sharing of knowledge may suffer badly.

·         Global aid to poor countries which were exploited by the imperial colonists during the 18^th to 20^th centuries, may diminish substantially, unleashing a new era of starvation and disease.

·         Global demography may see material change. The average life span in developed and larger developing economies may rise due to medical advancements, while the population may continue to decline.

·         Population in poor countries may decline due to starvation and disease. There may be more incidences of pandemics originating from poor countries, especially in Africa.

·         Technology apartheid could emerge as the most dangerous trend over the next decade.

·         “Artificial intelligence” (AI) may become the new equivalent of the 1940s atom bomb. The technological advancements in generative AI may seek to supplement the declining demographics and present huge productivity enhancement potential. However, the rise of authoritarian regimes and hyper-nationalistic tendencies creates the potential for misuse; raising the specter of a potential repeat of the Hiroshima-Nagasaki type disaster.

These changes will of course create once-in-a-generation investment opportunities; though with materially enhanced risk.