In the past 6 years, several significant events have occurred that would shape the new global order in the next decade or two. I would particularly like to mention the following ten events that in my view could potentially prove to be transformative for the global order:
1. Incorporation of the Belt and Road Initiative (BRI) into the Constitution of the Chinese Communist Party. (2017)
2. Abolition of time limits, allowing Xi Jinping to remain General Secretary of the Chinese Communist Party and chairman of the Central Military Commission for life. (2018) (After winning an overwhelming majority in the 2020 elections, Russian President Vladimir Putin is also eligible to stay in office until 2036.)
3. The Exit of the UK from the common European market (the EU) (2017-2020); and the elevation of the first non-white person (Rishi Sunak) to the office of Prime Minister of the UK in 2022.
4. The beginning of the latest round of trade war between the US and China. (2018)
5. The tariff war between the EU and US. (2018)
6. The outbreak of the COVID-19 pandemic, allegedly from a laboratory in Wuhan province of China, and consequent breakdown of global supply chains. (2020)
7. Exit of the US forces from Afghanistan, handing over the regime to the Taliban (2021)
8. Invasion of Ukraine by Russia and subsequent economic sanctions on Russia. (2022)
9. Signing of a strategic partnership agreement between China and Saudi Arabia (2022)
10. Massive attack on Israeli civilians by Hamas and subsequent retaliation by Israeli defense forces killing thousands in Palestinian territory in the Gaza Strip. The attack divided the world with Western allies extending support to Israel and Russia, China, and Arab League nations uniting in support of Palestine. (2023)
I feel that each of the above-stated events, along with many other events occurring simultaneously, has added to the momentum of change in the global order that had been in existence since the early 1970s.
It may still be early days to project how the new world order would look like. Nonetheless, it seems reasonable to assume that the global economy may get a significant impetus from the rebalancing. The realignment of trade balances; localization of manufacturing; redistribution of population; and renewed focus on finding/developing new materials, technologies, and methods to promote sustainability may usher in a new industrial revolution.
Notwithstanding the labor pain that the transition would inevitably entail, the new world order would be much better, as has always been the case.
I think young investors need to evaluate the recent events and their likely impact on their investment strategies. I would be happy to share my thoughts on these events in the coming weeks.
