Last year was a bumpy one for the global economy, with sluggish growth, high inflation, tightened monetary policy and instability in the financial sector. This all played out against a backdrop of increased geopolitical tensions and fiscal pressures.
This second podcast in our two-part mini-series on 2024 trends examines the global economic outlook for the year ahead. Will the next 12 months be defined by more uncertainty, or are there reasons to be optimistic about changes ahead?
Experts discuss the big economic trends and developments to watch out for in 2024, including the outlook for global trade, prospects for India’s economy and green investment, and what needs to happen to tackle persistent income inequality within and between countries.
Speakers
Related resources
Last year was a bumpy one for the global economy, with sluggish growth, high inflation, tightened monetary policy and instability in the financial sector. This all played out against a backdrop of increased geopolitical tensions and fiscal pressures.
This second podcast in our two-part mini-series on 2024 trends examines the global economic outlook for the year ahead. Will the next 12 months be defined by more uncertainty, or are there reasons to be optimistic about changes ahead?
Experts discuss the big economic trends and developments to watch out for in 2024, including the outlook for global trade, prospects for India’s economy and green investment, and what needs to happen to tackle persistent income inequality within and between countries.
Speakers
Related resources
Welcome to Think Change. I'm Sara Pantuliano. In our previous episode, we looked critically at the defining moments of global affairs of 2023.
We discussed which trends give us reason for optimism in 2024. Today, we want to zoom into the economic story. 2023 was a bumpy year for the global economy.
We saw sluggish growth. We saw high inflation, tightened monetary policy, and instability in the financial sector, and all of these against a backdrop of increased geopolitical tensions and severe fiscal pressures.
Many economists expect similar uncertainty in the year ahead. As the world leaders gather in Davos next week for the annual meeting of the World Economic Forum, Is there any good news in the economic outlook of 2024?
Well, here with me today to discuss all things economics, I'm really delighted to welcome Arancha Gonzalez Laya. Arancha is the Dean of the Paris School of International Affairs at Science Po.
Rathin Roy, until, last December, managing director here at ODI and now pursuing political ambitions, and Michael Jacobs, Professor of Political Economy at the University of Sheffield, and a Visiting Senior Fellow at ODI.
Welcome all. Well, to kick us off, perhaps you could each highlight a key macro trend in the global economy that you think our listeners should really be looking out for in 2024?
Arancha, why don't I start with you?
Thank you, Sara. Thank you very much. And it's one thing to forecast, it’s another thing to be in for surprises, and, the year has started with this big surprise of a rebel attack on the Red Sea, the Houthis, in Yemen, putting big spanners, in international trade route in a major conduit of goods, from east to west.
So let's say, let's get ready for surprises, would be, my line for 2024.
But, I mean, I would be looking at three i's. I will be looking at, inflation interest rates, which seem to be moving in the right direction, but where we need to, see how central banks manage it.
I would be looking at instability, in particular, geopolitical instability, lots of elections all around the world, possibility for policy changes.
And the third ‘I’ I would be looking at is the ‘I’ in artificial intelligence, and the impact that It can have for good or for bad depending on, how governments and businesses, run with it.
Great. Michael, do you agree with the three i's? Do you have any other key macroeconomic trend do you think we should be watching out?
I, I do agree with those.
I think it's not in theory or it's not, you might not describe it as a macro trend, but I think the potential re-election of Donald Trump in the US is, it's something that we all need to be aware of, and investors in the international economy will be very aware of it.
It will overthrow everything in ways that we can't really predict, but it is clearly a possibility.
The other one I would highlight is debt. The IMF estimates that, about 60% of low-income countries are either in debt distress or at high risk of it, and about a quarter of middle-income countries.
And, that has been caused, by the effect, on the global economy of US interest rates, and that, of course, is a fun a function of domestic US policy, of the, the Federal Reserve.
But it means that all those countries that borrowed in dollars, a, have seen a withdrawal of funds, and, b, are now, highly indebted.
Many of them paying far more to their creditors than they are spending on health or education. And some of those will probably fall over, will go into debt default or into its equivalent.
There's a tremendous reluctance to do this. Because if you do that now, you go into an IMF program, and you go into common framework, which has been agreed by the G20, neither of which are very good for you.
Only, Zambia, recently has, we've seen going through that process, not a good process.
And therefore, countries are very reluctant to do this, which means that they don't then restructure their debt. So, We're in a very difficult situation for many developing countries, I think, this year.
Thanks, Michael. Rathin, what's your key macroeconomic trend?
Well, my key macroeconomic trend is, rather depressing. It's more uncertainty. Not more risk, but more uncertainty. I think, that's happening for two reasons.
One, and I think what Michael outlined as part of, this overall uncertainty is that it's one thing to go into debt, it's another thing to know why you went into it. So you have Sri Lanka where the reasons are fairly clear, mismanagement.
Then you have Ghana, which invested in industrial policy. And despite that went into debt, There's uncertainty regarding Europe's commitments, for instance, to climate change.
There's uncertainty after the events of October 7, and the ongoing war in Ukraine, which itself seems to be more uncertain in outcome than people thought about whether the geopolitical pacts, Americana plus, that has existed since the age of globalisation, will endure.
So I think 2024 and especially even reading sort of messages in the FT and, you know, Indian newspapers is all about the sort of sense of foreboding, a sort of sense of uncertainty, which some rather dramatically compared to the time of the of Munich.
But I think, this is rather different because you see here we have democracies being uncertain, not a bunch of jackboot stomping around trying to make things worse.
It's people with the best intentions, making things more uncertain. And I think that is my big value.
So that chimes very well with Arancha's instability. So, I haven't heard a lot of optimism so far. Let's see if we can do better in the rest of the conversation. Arancha, Rathin mentioned the EU. I mean, your current position at Science Po and, of course, your previous experience in European affairs in different roles, only says minister, minister in the Spanish government gives you a unique insight into the role of the EU in the global economy.
How do you see this evolving and particularly in the context of the Gaza crisis that Rathin just mentioned and, of course, the ongoing conflict in Ukraine.
Well, I would say that, the story of the EU in these last few years has been one of relatively good news.
The EU has managed to weather huge storms, starting with the COVID crisis and then, the massive impact of Russia's invasion of Ukraine on its energy market.
And it's, I, I would say it's managed to tame inflation. It's managed to maintain a rather robust labour market. It's done so, in my view, with big doses of EU unity and building more EU responses as opposed to purely national responses.
It's done that, by doubling down on the climate transition, which gives us also a sense of the direction for the future, and it has done that investing in social safety nets.
Now the big challenge for the EU moving forward, is one of, trying to, get its growth, to work, above previous performance, growth, it's doing relatively below potential, and what the EU needs to do now is focus on growth.
And for that, and and growth has specific characteristics, Sara, in Europe. First, aging population in Europe, which means, labour supply constraints, relatively low productivity and a difficult geopolitical outlook. So in my view, there is, two important areas for the EU to invest on.
As we look in 2024, the first one has to do with competitiveness, doubling down on its single market, trying to build more integration in areas like services or the financial sector, on the capital markets where, its ability to be more integrated will mean, a bonus, for the digital age, where big investments are necessary and capital markets need to function better.
And the second one is, trying to manage better migration. At the end of the day, a continent that is getting older will need migrants. And, so it's not, it's not, in my view, a discussion about whether yes or no to migration. It's rather how you do that, in a continent, where, we start to see, shortages in the labour market. Migration has to be part of the answer, and managing it has to be part of the political mandate of any leader in Europe.
Couldn’t agree more, and that's something we've covered a lot on, on the podcast over last year. At the beginning of the conversation, you also mentioned trade, which is, of course, you know, critical.
You are uniquely qualified to comment on that given your experience at the ITC and WTO. What key trends do you see in global trade over next year?
And and I'm thinking particularly about, you know, supply chain disruption and the trade tensions between US and China.
Well, I see I see three big tensions, to manage, in the area of trade in 2024.
The first one is the tension between, the impacts of geopolitics, security, more national responses versus the logics of economics, which is what the logics of global value chains, represent.
The second tension has to do with how much, national versus how much, multilateral in terms of greening international trade.
We have seen a flurry of action, to help decarbonize international trade, but how much of this will be done in a cooperative manner - as opposed to just in a unilateral way, with taxes, with border measures, with regulatory, frameworks that, just are purely is a, a key tension to watch.
And the third one, in my view, is, China, and, the tension over how will China reignite its growth engine.
We know that it's moving away from the housing sector. Its Investing very big, on the green, on green technologies, but probably beyond the capacity of its own market to absorb, those investments.
And, the big question mark, in my view on China, which is how much will China invest, in social safety nets at home, which is key to unlock, current savings by citizens and by businesses, that feel the uncertainty And will not spend unless, there is more, in my view, public investments in social safety net.
So this in a nutshell, Sara, geopolitics, greening, in a cooperative manner or not, and China will be the big key trends to watch into May next year.
Great. Well, let's stay on the greening and, you know, the transition to the green economy.
That's something you've written a lot about, Michael, and, you know, you work a lot on. What are the prospects for green investment in 2024?
Well, we have something of a paradox here.
If you look at the numbers on renewable energy investment around the world, on the development of battery technology of electric vehicles, even now green hydrogen, all the graphs are going upwards in some cases, particularly, solar and wind power, in very, very steep upward curves. This all looks fantastic.
The reason we have a climate crisis is because we only started doing this in the last decade. Had the world started investing in these kinds of ways in, in low carbon technologies 30 years ago when we first understood climate change or even 20 years ago, we wouldn't, be facing a situation where we've got huge investment, and yet the world is still going backwards.
Climate carbon emissions are still rising globally. They're flattening out. And when you look in the future, the, the trajectories don't look nearly fast enough to avert the worst aspects of climate change.
So, this is a kind of paradox, which is, in fact, things are going very, very well at the same time as they're going very, very badly.
And we now have a rather historic, outcome of COP 28, A little bit unexpected, I think, where basically the world has agreed to phase out fossil fuels.
Language is a little bit compromised, which is the only way you can get agreement in these things. But the Meaning of the COP 28, global stocktake outcome is pretty clear.
But, of course, it doesn't really have very much impact on investment over the next 2 decades, to be perfectly honest, the phase out timetable is 2050 or thereabouts.
And so there's plenty of opportunity for countries to kind of ignore that, and carry on investing in fossil fuels as they are doing, countries and companies.
So the immediate prospects of moving to that phase out trajectory, which in a sense the world has now accepted will eventually happen, are not particularly great.
And if you look at the plans of, the major oil, and gas companies, both private and state owned, they are for continued expansion.
And you have countries, I'm afraid, like our own, which is issuing new licenses even for tiny amounts of oil and gas in the North Sea.
So, prospects are very, very good if you're simply looking at the trend, but not nearly good enough if you're looking at climate change.
Not, too encouraging then.
We've talked about geopolitics as well. Rathin, can you reflect a little bit on the implications of the war on one hand and also what you've hinted to, you know, this fear of this rising electoral autocracy in different countries.
You mentioned the the US. Of course, there are elections in India. There are elections in very many countries. Almost half of the world is going to elections next year.
Yes. I think this is this is absolutely crucial, for our times and for younger people who assume leadership positions in our time, to grapple with. Because not just do we have the possibility of elected autocracies.
I should think after the election of Trump, what we have is the permanent establishment of an autocratic political force that has broad based societal support, whether that's Italy or that's this, to me, fairly idiotic reform party in the UK.
There's no gain saying the fact that the mainstream Tory party is paranoid of this party because they have electoral support. You know, broad swathes of society supporting, exclusivist autocratic solutions.
So if you like the, the, what my friend calls the gilded age, our gilded age of globalisation, that ended with the 2008 financial crisis and to some extent with climate challenge.
But that has been accompanied by the ending of another guilded age, a political guilded age, in which we took for granted that the, that there was a relation between elected democracy and, democracy as such that if you had regular, free, fair, transparent, and demonstrable elections and people with scrambled eggs on their shirts when running countries, then these countries were considered to be these to be democratic.
That's no longer true. And that's longer true now of India's of the biggest superpower in the world.
That is no longer true now of Argentina, which is a major pivot in Latin America and Brazil too, is constantly on the edge. That's no longer true of one of the biggest G7 countries in the world, Italy.
That's no longer true of Germany where people find it, convenient to go to Berchtesgaden and pay homage to Hitler, and there are protests, but this also carries society support.
And, needless to say, this is also true across Asia, with example of China seems to show that the benevolent hypocrisy works.
In fact, China is praised for having a party system where at least people have a voice, whereas in the gilded age, it did not.
I think this is something that we will begin confronting politically this year because this affects everything.
This affects the possibilities of cooperation, it affects the possibilities of increased multilateral action on climate and otherwise, as Arancha and and Michael were talking about.
And finally, of course, the fact that we have had two very inconvenient, but very brutal wars.
One in the, you know, the one reigniting the traditionally most warlike continent of the world, which is Europe. Europe's always been the place where wars happen. Was a brief period of peace and now wars are happening again.
And, of course, the tragic events that happened in the Middle East, which have resulted in the configuration where we are having to question the validity of the basic values that democratic countries hold, where every vote in the UN is called into question in normative basis.
I think all these things are leading us into a perfect storm in which the management of the economy is implicated.
But people don't realize that yet. I hope That this would be the year where that realisation dawns, that political economy is where the action is.
17:21 – Michael Jacobs – a progressive alternative
Can I, For the sake of our listeners' mental health, in the new year, just put the alternative prospect?
So it's not certain that Donald Trump will be re-elected. At this moment, he's slightly ahead in polls against, Joe Biden.
It's not absolutely certain that Joe Biden will be the Democrat candidate. I think if he is consistently behind in the polls by the summer, I don't think it's impossible that the Democrat party would seek to replace him. It's his age that appears to be the problem. Not his record, which actually by American presidential standards isn't bad. But, it's certainly possible that Biden could win or an alternative Democrat candidate could win.
The Labour Government in the UK, I say the Labour Government. The Labour Party in the UK looks likely to be the next government here. I say that's on the day that Keir Starmer, excuse me, is warning against complacency. So, need to be a little bit careful there.
But let's imagine that those two things happened. Then at the end of 2024, what we would have is a, and this is by the standards of Western governments, so let's not get too excited about it. But by the standards of Western governments, we would have a progressive government in the US, one in the UK.
Whatever happens with the European Commission, it will maintain, by global standards and historical standards, a relatively progressive position under von der Leyen or somebody else.
The European parliamentary elections, won't affect that deeply.
Macron will still be there, who's tried to take a reasonably progressive line. Schultz, likely to be, still be there. Progressive governments in Canada and Australia, and Spain, and that's most of the west.
That's most of the G7. And as I say, by the standards of Western governments, that's not a terrible prospect.
And with Brazil holding the presidency the G20 this year, South Africa next year. You do have the potential, I think, there, to see a mildly progressive turn in international diplomatic and political affairs - can be derailed completely by what's happening in the war in Ukraine and in the Middle East and so on, I definitely understand that, and tensions with China - But I don't think we should look on 2024 as, unalloyed, with unalloyed pessimism.
I think there is an alternative prospect, which, could give us a little bit of hope.
I'm really delighted that you're giving us some reason to hope in 2024. Arancha, Rathin, do you agree with Michael's alternative proposition for 2024?
Well, I hope it comes true, but let me point out that what we are hoping for, in the end, and this is not something that excites a 30-year-old, maybe fossilised people like us, is the prospect of a mildly progressive globe 12 months from now.
And look what the right offers them. You know, I don't know what they offered them because I'm not from the right, but, they actually offer them change that they've seem to find compelling and exciting. So what is missing? And I completely agree with Michael.
If an old man turns up in the US yet again and a labour party, who doesn't seem to have any particularly radical or interesting policies including the Middle East, turns up in Britain again.
We will have a mildly progressive consensus across the base.
I don't think that's going to be enough to be able to handle the tectonic forces that have been unleashed upon us. And I'm not saying that 2024 is bad. I'm saying it's time to get serious.
It's a year where we need to think very hard about what an alternative that excites the younger people coming into leadership now is as opposed to the horrible one that seems to be exciting them a-100-years after Hitler.
So I follow the line of, their, former president of the European Commission, Jacques Delors, who just recently passed away. And he used to say, you know, don't, have to choose between optimism or pessimism. Choose activism. And this, in my view is a key element that we're missing in this conversation. Democracies is not just simply about legitimacy. Democracies is also about efficiency.
It's about producing solutions to problems. Now, we call uncertainty, sometimes, the inability to master political courage, or political forces or political energy to get to those solutions.
Take the question of, artificial intelligence. We know it's going to be disruptive, and we know that we have to invest in social safety nets to make sure that citizens don't fall behind when technology to takes over a number of, big parts of our labour market. So it's not it's not uncertainty. We know that those that invest in social safety nets will master better. Societies will be more cohesive, and progress will be, shinier, for entire society. So if we are not doing it, Let's not call it uncertainty. Let's say that this is a democracy that is not delivering results.
And so let's focus our, I think, efforts in 2024, as citizens and as a think tank, that ODI is, to ask for these results and to put on the table, the ideas, the solutions that hopefully will get a bit of political traction.
Couldn't agree more, and this activism is fundamental, particularly to deliver for young people because they are the one who are missing out. You know, the impact of, know, the economic challenges that we see globally is really heartfelt by young people. Michael, you want to add something on.
Yes, because Rathin talks about the support for right wing parties.
It's actually mainly older people. Younger people are not particularly attracted to [right wing] parties, they offer a story which is backward looking, which is intolerant.
And so in most countries where the right has been, in the ascendant. It's older generations, which are supporting them. Now some of those older generations are quite large, and they vote. And some of the young people have not yet got into the habit of voting.
But I think, the interesting thing about young people and political activism is it's very unpredictable, particularly by old people Like us, I'm afraid.
Greta Thunberg arose out of nowhere, and, unfortunately, has sunk as well, in the sense of being a globally impactful figure. Not surprisingly, she was 16. She deserves a life. And she's, she needs to be, in a sense, replaced. And I'm sure she will be by other young people.
I do think there will be another young people's movement, around justice and sustainability. The future they are looking at is, looks pretty terrible. And I think they will get angry and organised about it. The problem is we don't know exactly when.
And then the question is, what do the older leaders who are in power do about. Do they align themselves with the force of change or not? And their leadership is really critical.
We've had a poor generation of leaders in the West, to be perfectly honest. And there is a kind of problem with Western leadership, which is it tends to occur in the old colonial powers, and then it's deeply resented.
You know, Macron has taken initiative on global international, global affairs, economic affairs over the last year. And quite rightly, countries around the world are saying, well, why you know, who is he to do this?
Where's the legitimacy come from, from France to do this? And to be perfectly honest, the answer is Macron is an arrogant leader of a post-colonial country.
And having worked for a previous one of those in the UK, Gordon Brown, who similarly regarded it as his responsibility if nobody else is going do anything about the state of the world, to do it himself, again, a post-colonial leader.
Well, it's better that than nothing.
And, in my view and the interesting thing I think about the fact that Brazil and then South Africa will hold the G20 presidencies.
Brazil, particularly, here is a country that is very determinedly saying, we are not part of the West, but we are also not allies.
We are not allied to China or indeed anyone else. We represent ourselves. But we will form alliances with all the different powers in the world. So for example, the BRICS powers. Brazil has been part of the enlargement of the BRICS.
But we will do deals with all of them. And I think it's very, it will be very interesting to see how Lula, who himself is looking for a legacy as a nonaligned or as a newly, emergent power plays the west here. And I think that, as well as China. And it has good relationships with both. And I think there is a possibility that you could see a kind of leadership coming from the global south, which then harnesses, what we hope are a few more progressive leaders in the north, into a kind of common position.
That would be the hopeful view anyway.
Yeah. That chimes well with what we discussed on the previous episode of the podcast.
You talk about Brazil and South Africa. In the previous episode of the podcast, we talked a lot about the positive energy that is coming, from different African countries.
And, you know, the, in a way, economically, the hope that African economies will continue to, grow and rise in 2024.
We haven't talked about the Indian economy, though, Rathin, which appears set for a healthy growth, but we know that there are a number of, you know, structural institutional issues that may affect the prospects for this powerhouse economy.
You are the go-to person on India’s economic development issues. How do you see it?
Indian economy will grow unless you do something even worse to muck it up, and that's always been the case.
So, you know, once you have a couple of spurts of growth in a country like India, then, you know, unless you really mock up things very badly, which hasn't happened yet, There is a self-sustaining momentum to 5 to 6% growth because there's so much surplus labour, so much, entrepreneurship, And so much willingness to invest in what is either to be a reasonably stable country.
That said, I think the biggest problem in India is the use of that term as a collective, at the moment.
So India's largest state, Uttar Pradesh, is actually poorer than Nepal, which is a very poor country, if you've heard of it, right next to India.
Per capita income in three digits. Tamil Nadu and Kannada in the south, which are India's richest states, relatively richer, have per capita incomes approximately Indonesia, which is $3,000.
And the mean per capita income of India is the average of these two very desperate, regions.
UP has human development indicators like Burkina Faso. Tamil Nadu and Kerala have a 100% literacy, no poverty and middle to high human development indicators.
Labour from UP migrates to the south, but then is kicked back, much like labour comes to Britain and is kicked back or labour comes to Europe and is kicked back. They do not settle. They're like, you know, Gastarbeiters, like like guest labour. In these circumstances, whether a country where the political majority lies in the north, which is very poor and very backward in terms of human development.
And the economic prosperity lies at the south, which is very rich, very progressive and very forward, is an issue. This is a fairly unique issue and, again, a very depressing take unless we do something about it.
There is no place in the world. Take your own Europe. In Europe, you had a bunch of rich countries. You had these sort of ‘user type’ countries like Portugal and Greece and Ireland, And you meet the winners by investing in them.
But the minority of population in Europe lived there, and the majority lived in prosperous regions. That was also true of Germany when it unified. However, the that is not the case in India. That's also true by the way of the US. Fewer people live in that, more people live outside Brazil. It's the majority regions trying to, you know, raise minority regions to levels of prosperity that are common.
But in India, the majority regions are the ones that are poor. The last time I've seen this in the course of human history in the last 100 years was in a country called the former Yugoslavia.
And this worries me.
I mean, we're almost at time, but you hint to something very important that we haven't touched on, which is, you know, inequality.
Inequalities continues to increase both, you know, within countries and across countries. I mean, that was one of the major, you know, objectives of the SDGs.
We have the summit for the future in September, and the figures we detail a sorry story. One quick reflection from each of you on why progress is so difficult and what needs to change to really start reducing this rampant inequality?
Yeah. I mean, I think that, if I look at the world, trying to divide the world into the north and the south and the east and the west does not work any longer.
The world of tomorrow requires, essentially cross-coalitions, countries that are capable of building those bridges between the north and the south, the east and the west.
So, if we are stuck in the, in yesterday's world, we are not going to be able to address the three big challenges that require a across cooperation. It's debt and finance, it’s climate action, and it's international trade.
And this is maybe why we are not moving fast enough to address the objectives of the Sustainable Development Goals because we are not fast enough in creating those coalitions.
Instead, we are spending enormous amounts of time and efforts into re-dividing the world into categories. So, my wish for 2024 is coalitions across regions, across geographies, across the globe. Otherwise, we will not succeed.
Thanks, Arancha. Rathin?
Well, one quick comment that Arancha said, I think that's very important. We need to take that forward, Except I want to make one point.
Coalitions do not happen between technocrats. You cannot coalesce on technocratic premises. That's been tried in climate. It doesn't work. Need to have political coalitions and need to have coalitions of ideologies.
I think what is lacking at the moment is that sort of move to actually have a better coalition along ideologies, and that I think would then transcend the four lines that you mentioned.
As a former socialist, I can only bemoan the demise of the socialist international, as a council minister for the former socialist international, of which are Mr Gutierrez was an illustrious and I think the most effective job he did, including the present one.
But, that, imagine if we had a vibrant socialist international on the climate space today, you would definitely see climate action.
So I think I think technocratic progress follows political unity and political solidarity, both within country and outside countries.
The other point, the second other point I would make about inequality, which I think is very important is we need to replace that word with the word inclusion.
I think the major problem with the success of the welfare state in Europe, and they tend to replicate it all over the world, the model was very simple there. I make the money, you tax me, I give it to people who didn't make money. I don't think that is going to work anymore.
We need to find ways into which growth is delivered not by the minority, and its benefits are then shared using public finance by majority, but growth as development is delivered by a broader plurality.
That in fact was the essence of socialism which people have forgotten. So let's move back to inclusion to get equality.
Thanks, Martin. Michael?
Will you ask, kind of, why is progress so difficult?
Capitalism is, the answer. Capitalism is both the problem and the, at least in the short term, the solution. Capitalism generates inequalities. It finds the places that it can make profits, and it invests in those.
And those lucky places and people and sectors benefit and grow and become a little bit less, unequal, with the rich and the capital holders, and the places that it doesn't invest in remain poor.
And so the region of the world that we need to be focusing on right now that we haven't yet talked about is Africa, which has been the region of the world that has experienced the least of the glow of global capitalist investment and growth.
And it's on the cusp of something, without any question. There is more dynamism in Africa now, I think, than for many years.
And you have in, in leaders like William Ruto in people who are who are articulating a vision for Africa. The Africa Climate Summit this year last year, was, I think, a very interesting moment.
It brought together, a lot of countries in Africa around, and you can read this in the Nairobi declaration, so called, which was its outcome, A new vision of, what Ruto calls climate positive growth, where climate change is not an obstacle to, to development. It's the means of development, using Africa's people, its nature, its industrial, potential, to grow and to tackle climate change both for itself and with global impact.
And there is a takeoff, as the development economists might think of it, in prospect, I think, in Africa. But it will require, trade and investment from the North.
And here's where the interesting bits of possible hope lies, I think, which is that the North is the north of the world, the west, let's call it, is currently embarked on a green industrial strategy. The Inflation Reduction Act in the US, the European Green Deal, and kind of mini mini, attempts at this in Japan, Korea, the UK, which will, are intended to boost domestic economies through investment in green technologies, but will require supply chains that are much, that are much wider than, merely domestic, particularly critical minerals, but also manufactured goods, green steel, green hydrogen, and so on. And they're trying to do it without China or with a less reduction less dependence on China than the western economies have had over the last 30 years.
Now that is probably not good in a global economic sense, but it's clearly happening under any American president or indeed, and European Parliament and commission. We're going to be less, we're going to try and be less dependent on China, and that requires a development of supply chains elsewhere.
And Africa has a real opportunity to be the source of much of those supply chains. That will take new trade and investment partnerships and serious money, serious investment, private sector and public sector investment.
And in a way, you know, I think, at a time when the G7 is, kind of trying to work out what it stands for. This is a moment to put its money where its mouth is. There is a real opportunity there. There is an agenda for new funds going through the multilateral development banks, tripling of funding, and so on. But it will take more money.
And in the end, this is the challenge for the north I think, which is to say, if you think your geopolitical security is in this new formation, your economic development is, about this, then you're going to have to have put some serious private and public sector investment into the global south.
Well, that's all we have time for, I'm afraid, but thank you so much, Arancha, Rathin, and Michael for helping our listeners navigate the key economic trends for 2024.
We started on a rather, you know, pessimistic note. We heard a lot. You know? We heard about the three i's from Arancha, inflation instability, AI, the impact of AI. We talked about the impact of the geopolitics of the war, that, a number of, you know, other negative trends that we can expect to watch in 2024, but I think we ended on a more positive note.
We heard about, you know, the rise of Africa again as we did in the last and, you know, emerging economies where, things look promising.
But importantly, we've also heard of what it will take to turn these trends into more positive ones, which is really renewed, you know, global cooperation, global solidarity, trade and investments that is really equitable that can support, you know, these positive shifts, activists to make, the politics work and ultimately more courageous leaders.
And let's really hope that 2024 brings us, you know, more courageous, inclusive, visionary leaders. We definitely need that. Thank you to our listeners. If you enjoyed this episode, please do like, subscribe, and rate. It helps us a lot. And we hope you’ll join us again next time. Until then, goodbye.