My thoughts on the state of the world, Africa and the future of all things #Davos2019 #WEF2019
1. On the state of relations between China and the US:
Much of the “fight” between China and the US is that the US (the world largest exporter of Culture – and that a fact) assumed that the entire world has adopted its culture would then adopt its values. Liberty (US) vs. Economic Prosperity(China).
China is a fascinating case study. It shifts everything you know about the relationships between democracy, individual liberty and economic prosperity. Much of the thinking that the USA has embedded in the world is the idea that liberty and economic prosperity are interlinked. China (at macro-level) has successfully decoupled these. A first in the post-World War II world.
Here is a sobering thought: China holds $1trillion in US treasury bonds. This world is more connected than ever before… and that is good. It means the world leaders can ill afford a dramatic world event that threatens all of our living order … the has never more interconnected & more our collective fortunes have never been more intertwined.
Just as a side note on the unintended consequences of the US-China trade war, the unintended consequence of the US-China trade “war” is that China could shift from economic concentrations in the nature of its meso-economy to a dynamic competition-led economy. That, contrary to current thought, would actually fuel economic growth for China
2. On narrow identity in a global context
What is at issue as the world becomes more connected is the very idea of “the nation-state”. Is the new world order shaped by identity pegged to a nation-state or is about the world a single village (for the first time in human history)?
The new citizen of the world is determined more by psychography and not demography & that notwithstanding their identity shifts in kind.
3. On Africa, her future, leaders and the path to growth
In Africa, talent and competence are not as important as “connections”.
In much of the west, whilst corruption exists and is a problem, the size of their real economy is large enough to create space for real entrepreneurs. The inability of African leaders, politicians & governments to liberalise markets has crippled innovation. The incestuous relationship of business and political power is at the centre the problem.
The challenge of Africa is that it is not a participant in globalisation but rather charity recipient of those that create wealth through globalisation.
4. The missing link for Africa (alongside whom will she choose to grow)?
The rebalancing of the US-Europe-China geopolitical and trade power dynamic will shift not only HOW developing economies frame growth strategies but also alongside whom it is that those same economies choose to grow. This, I suspect, in typical Africa fashion is not a question that leaders of the continent have thought about collectively. In the colonial era, Europe plucked Africa apart by pegging brother against brother. Look for instance at the West Africa pact that Belgium, Britain, France and others made to share that portion of the continent. It’s the same playbook, just different players and the prey is Africa … again.
5. What is fuelling the China growth?
China grew at 6.6% last year. Most of the globes’ economies salivate at the thought of anything about 4% growth.
Drivers of this slowdown:
1. Household debt
2. Over-leveraged private sector balance sheets
3. Slower than usual infrastructure spend
What remains is this, the future is not what it used to be.
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