World XXXX is a special project by the best, in my opinion, economic journal on this planet – The Economist.
It is published annually in December and is a reasonable and at the same time elegant forecast of competent economists, politicians, and futurologists, about what we might be able to expect in the year ahead.
The publication in Ukraine is adapted as “The World in 2019”, and I am one of its first readers.
Now to the point. What are the financial forecasts of professionals and insiders for the upcoming year? I have singled out seven “prophecies”. They will form the global economic image of our planet. For venture investors and other ambitious entrepreneurs, their understanding is a must.
- In 2019, investors from around the world will find themselves at a crossroads: invest in the US stock market – a country whose economic growth is slowing due to the end of the 2018 tax exemption regime, or in the EU/developing markets? John O’Sullivan, writer of the Buttonwood column in The Economist, convinces us that the second option is the most profitable. “If the majority of investors have already purchased American shares, then there will be fewer buyers for the future, which will further stimulate their growth.” Investors, take this into account!
- Whether to import Chinese goods and services, that is the question. If the answer is yes, then you know that the process of logistics is expensive, labour-intensive, and extremely conservative. Let me demonstrate a simple example from the Maersk company: in order to transport a batch of avocados from India to the Netherlands in 2014, 30 people had to take part in the process, communicating with each other more than 200 times! But there is light at the end of the tunnel: governments, insurers, and banks could join forces to digitise international trade. Watch out for names Batavia, Marco Polo, and We.Trade – they may soon increase the profitability of your export-import business and allow the forest to breathe a sigh of relief.
- This year, the US drove the global economy. By comparison, the EU looked dull, and China, torn between striving to secure its financial system and achieve its economic goals, grew by only 6%! Experts however expect a slowdown in US growth by 2020. Capital will run to where it is safe, the dollar will strength, and, accordingly, the Ukrainian hryvnia will relax.
- The City of London is genuinely concerned about its future following a more than likely Brexit and imposes serious expectations on Fintech. “This is the best way to modernise our financial infrastructure and help banks prepare for the upcoming rivalry with technological rivals.” As such, talking about Fintech in Ukraine is not a fashionable attribute, rather the first page in the book “How my enterprise survived in 2019”.
- In 2019, according to The Economist’s special department editor Matthew Valencia, those who fought corporate corruption should be ready for disappointment. Despite the fact that the last 10 years have been difficult for the wrongdoers of all financial stripes, the United States, under the leadership of Donald Trump, has changed accents and instead is focusing on the lobbying of business interests. For example, America refused to participate in the Extractive Industries Transparency Initiative and American companies lost the non-transparency game to competitors from the Russian Federation and China. Meanwhile, in the UK, the public registry of company owners (which is only two-years old) is underfunded. You may come to strategic conclusions yourself.
- The QR Revolution. Chinese payment systems WeChat Pay and Alipay, which are based on QR codes for mobile devices, are confidently mastering the world. They continue to crowd out coins and, strange for the 21st century, rectangular pieces of paper called money. Alipay now has about 870 million users, and in the summer of 2018, the system processed 2.6 times more transactions abroad than during the same period last year. Based in India, Pakistan, and Indonesia, Chinese Fintech is fixed in European markets. This is the first “fall” for Finland. It doesn’t matter who’s next.
- Those wishing to receive a PhD in the field of economics may wish to look at the three most important financial topics of the coming year – 1) trade in the era of globalisation; 2) the effects of market concentration, and 3) gender discrimination in economics. In the first case, a scientist will have to understand how amateur politicians (such as the President of the United States, for example) can influence transnational trade in a globalised world. In the second case – to investigate the question of how the concentration of business inhibits the growth of wages, investments, and innovations. But the main question will be what to do with these business monsters? And in the third case, to understand why the material of women economists are less represented in the manuals. In general, no fluff, no feather!
It begs a few conclusions.
First, do not anticipate a calm business environment next year. The factors that complicate them include America First, an aggressive China, and the existence of huge business monopolies suppressing competition and the freedom to choose goods and services.
Secondly, technologies (in particular, Fintech) have changed, are changing, and in 2019 will continue to change the way we do business and invest. Payment by QR-codes and wrist watches may become commonplace. The main thing is not to cling to the old methods but be open to the unknown.