2020, Year of Intense Competition With China

The current trend in global economy believes 2020 will be the ground for pushing Western countries towards negative economic growth.

And these statistics and figures invite global policymakers towards de-escalation decision.

The UN report “the World Economic Situation and Prospects 2020” officially announces, “The global economic growth in 2020 fully depends on policymakers’ decisions for reducing trade tensions.”

IRAN NEWS POLITICAL DESK

So the UN report on world economic situation and prospects 2020 which was published last week indicates that global economic growth declined due to prolonged trade dispute and fell to 2.3 percent.

The report has predicted that flareup of trade tensions will intensify geopolitical escalations or financial turmoil and could derail a recovery.

In a downside scenario, global growth would slow to just 1.8 per cent this year.

A prolonged weakness in global economic activity may cause significant setbacks for sustainable development, including the goals to eradicate poverty and create decent jobs for all.

At the same time, pervasive inequalities and the deepening climate crisis are fueling growing discontent in many parts of the world.

UN Secretary-General António Guterres warned that “These risks could inflict severe and long-lasting damage on development prospects.

They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount.”

In the United States, recent interest rate cuts by the U.S. Federal Reserve may lend some support to economic activity.

However, given persistent policy uncertainty, weak business confidence and waning fiscal stimulus, GDP growth in the United States is forecast to slow from 2.2 per cent in 2019 to 1.7 per cent in 2020.

In the European Union, manufacturing will continue to be held back by global uncertainty, but this will be partially offset by steady growth in private consumption, allowing a modest rise in GDP growth from 1.4 per cent in 2019 to 1.6 per cent in 2020.

Despite significant headwinds, East Asia remains the world’s fastest growing region and the largest contributor to global growth, according to the Report.

In China, GDP growth is projected to moderate gradually from 6.1 per cent in 2019 to 6.0 per cent in 2020 and 5.9 per cent in 2021, supported by more accommodative monetary and fiscal policies.

Growth in other large emerging countries, including Brazil, India, Mexico, the Russian Federation and Turkey, is expected to gain some momentum in 2020.

Africa has experienced a decade of near stagnation in per capita GDP and many countries around the world are still ailing from the effects of the commodity price downturn of 2014-16, which resulted in persistent output losses and setbacks in poverty reduction.

In one-third of commodity-dependent developing countries (home to 870 million people), average real incomes are lower today than they were in 2014.

This includes several large countries such as Angola, Argentina, Brazil, Nigeria, Saudi Arabia and South Africa.

At the same time, the number of people living in extreme poverty has risen in several sub-Saharan African countries and in parts of Latin America and Western Asia.

Sustained progress towards poverty reduction will require both a significant boost to productivity growth and firm commitments to tackle high levels of inequality.

UN estimates indicate that to eradicate poverty in much of Africa, annual per capita growth of over 8 per cent would be needed, compared to the just 0.5 per cent average rate over the past decade.

Elliott Harris, UN chief economist and assistant secretary-general for economic development, called on policymakers to aim to enhance well-being in all parts of society rather than promoting GDP growth.

“This requires prioritizing investment in sustainable development projects to promote education, renewable energy and resilient infrastructure,” he argued.

The report also underlined the requirement for a more balanced policy mix to stimulate economic growth while moving towards greater social inclusion, gender equality and environmentally sustainable production.

Pointing to growing discontent over a lack of inclusive growth, Harris said: “Much greater attention needs to be paid to the distributional and environmental implications of policy measures.”

To combat climate change, the world’s growing energy needs must be met with renewable or low-carbon energy sources.

This will require massive adjustments in the energy sector, which currently accounts for about three-quarters of global greenhouse gas emissions.

If per capita emissions in developing countries were to rise towards those in developed economies, global carbon emissions would increase by more than 250 per cent – compared to the global goal of reaching net zero emissions by 2050 and it will risk the lives of the people.

The global economic growth either in the areas with high growth or lack of logical growth indicates that sanctions against China is in favor of this country and will be against the U.S. interests.

If this report is confirmed by the White House, in fact and in the U.S. whoever is elected as president, even Donald Trump, will have no way but to lift all sanctions in the world and cut military expenses.

These decisions are mandatory for any country like Europeans and the U.S. in order not lag behind China in the race.