Those interested in economic affairs are following with great interest how the global economy will exit 2022 while it is in a turbulent and frightening situation, due to the huge events that the world witnessed during this year, especially the Russian-Ukrainian war, whose burdens translated into high commodity prices such as energy and food, as well as a sharp rise in inflation rates. And the resort of central banks to raise interest levels, which was reflected in a rise in debt rates and a collapse in global stock markets. In light of this difficult environment, investors in the world do not place high hopes that economic conditions will improve during 2023, as current indicators tell us that there are many risks lurking in the global economy.
From this negative picture, there has been a lot of talk during the last period from most of the specialized international bodies, experts and researchers regarding the weakness of the indicators of the global economy and its slow growth, and the bleak expectations for the development of its tools in the future in order to improve the levels of the economies of different countries, hence the speech of the Director of the International Monetary Fund at the Chinese Development Forum was not New on many issues afflicting the global economy today, as it is clear that the global economy this year will not change the course of the slowdown to less than 3 percent, and the arguments of the effects and repercussions of the pandemic and the war in Ukraine and the tightening of monetary policy are still the reasons on which the Fund comments. All the reasons for the slowdown in global growth, and with the addition of the problem of risks to financial stability and banks around the world, this situation has no choice but to continue to warn and express concern and call to “stay vigilant”, to face the “uncertainty” that is still “high”. In the financial sector, following recent setbacks and collapses in Western banks, this sudden collapse is expected to affect countries most exposed to risks, especially low-income countries with high levels of debt.
We note that the Monetary Fund has alluded to the great position achieved by the Chinese economy and its profound impact on the growth of the global economy. The Fund estimates that every 1 percent increase in the growth of GDP in China leads to an increase of 0.3 percent in the growth of other Asian economies. It is also expected that China alone will achieve a third of global growth in 2023, and in the context of these figures there is a warning once morest dividing the world into competing economic blocs, and this trend will lead to “a dangerous division that will make everyone poorer, less secure and less powerful in facing the expected financial and economic crises in the future.” .
Going back to what the director of the International Fund alluded to and what she tried to point out is the growth of the regional economy at the expense of the global economy, as regionalism represents one of the most basic restructuring processes affecting the global economy since the establishment of the principles of international trade at the Bretton Woods Conference, and Asian regionalism is one of The most prominent regions that took broad dimensions of economic rather than political interaction, they were able to achieve successful growth strategies directed outward, and the reports of the International Fund indicate that the countries of the South Asian region achieved a strong recovery of 6.5 percent in 2021, and 4.0 percent in 2022 despite An uncertain global environment, and it is expected to rise to 4.3 percent in 2023, and with the anxiety and uncertainty surrounding the various economies around the world, and the recession that threatens America and the European Union, Asia is still a relatively bright spot in the global economy, but that makes the countries of the region Today, the Asian countries are closer to each other, and this is evidenced by the estimates of the International Fund that every 1 percent increase in the growth of GDP in China leads to an increase of 0.3 percent in the growth of other Asian economies. The links are clear and very strong, so that the common interests Among the Asian regional countries has been increasing in recent years, and it has been reinforced by new technological trends and the rise of India, and the pandemic has proven that avoiding problems related to supply chains requires the development of production networks with effective transport and communication links, which enhance the international competitiveness of companies in the region, and some studies indicate that Southeast Asian countries It was able to achieve an increase in the economic interdependence of the countries of the region as a result of improving commercial transport, in addition to increasing trade facilitation and developing border management, which significantly affected the structure and speed of trade.
It is worth noting that it is not the first time that concern has escalated over economic integration among the countries of the Asian region, and there have been many studies since the Asian Tigers crisis in the last decade of the last century, but the words of the director of the International Fund were clearer this time as she warned once morest dividing the world into competing economic blocs, and that this will lead to “a dangerous division that makes everyone poorer and less secure, especially in light of the occurrence of recurring financial crises, including the recent financial crisis with the bankruptcy of a number of banks that led to a state of” uncertainty “in the financial sector, which has been neutralized Its effects so far, and regarding the “decisive measures taken by policy makers that were evident in the sovereign decisions of the Swiss authorities to address the problem of Credit Suisse with the acquisition of Swiss bank UBS, the link is clear between escalating regional risks and the occurrence of financial crises.
In sum, the director of the International Monetary Fund wanted to present an important and clear message to all countries of the world through its regional blocs that global solidarity and cooperation must be achieved and that they all stand unified, in order first to confront the dangers besetting the global economy and the need for a rapid recovery, and secondly it is necessary From proposing combined solutions so that the world can get out of the impasse of its ongoing economic problems and avoid the recurrence of new crises.
