On the face of it, the most recent Global Economic forecast from the World Bank seems pretty sobering. On a long term view, they assumed that the growth , with Potential growth slower than anticipated (and arguably slower than required to turn around the fortunes of countries around the world. Even in this pessimistic view, they still see downside risk , with potential growth declining across all markets. The combination of interest rate rises in the frontier markets and inflation globally are the main issues that need to be addressed to stabilise and encourage more resilient growth.
Pausing to reflect a little more, a few observations can be drawn
- It shouldn't come as much of a surprise...on the back of two of the biggest global shocks in living memory, the world is struggling to bounce back. The combined impact of the pandemic and the conflict in Ukraine have put an unprecedented pressure on local economies, education systems, global supply chains and cross border trade. The specific pressures around energy and food security alone have triggered global rises in inflation that virtually every country globally is attempting to address pre-actively
- The responses suggested by The World Bank are practical. In their presentation, they raised five main themes - given the work we do and the engagement our members have on a global scale, we cannot but agree with each of them
- Tackling Climate Pro-actively: the World Bank suggests this is a critical priority – with the need to intervene pro-actively to protect against the potential impacts of rising temperatures – in terms of the humanitarian issues it can create, from famines and food shortages to conflict and people migration. We would agree, but go further, in believing that Climate is a ‘once in a generation’ opportunity (and need) to drive global collaboration to tackle an issue that supports (and threatens) every community in the world.
- Engaging more females in the labour market. Again, we support this view entirely, with the benefits of participation and leadership by women being proven to stimulate economic improvement at a local/community level, as well as creating a more inclusive working environment. This also features heavily in our most recent report https://www.britishexpertise.org/reports/report-beyond-boundaries-the-role-of-uk-based-organisations-in-advancing-global-gender-equality-and-social-inclusion-gesi
- Trade and Services are the engine of growth. With our members, we champion the growth in exporting both goods and services. It is a no-brainer – creating jobs locally and internationally, supporting the in-country economies and skills by ensuring activities are conducted in partnership
- Leveraging technology more to drive productivity. Whilst the headlines may focus on AI as a potential threat to jobs and well-being, the positive use of technology is truly pivotal – to deliver more effective services and support, to underpin resilient and secure supply chains, to protect against counterfeit, to create jobs in new areas and re-skill global populations for the digital era
- Keep spending, but differently. Specifically, the World Bank says governments need to keep spending, but not funded by Debt. The need to keep investing is key, but we would expand this beyond governments. Perhaps radical, creative and innovative solutions are required in finance more than any other area.
We would add three key observations:
- Globally, we need a turnaround plan. In a business context, turnarounds tend to be characterised by four main building blocks: Creating a bold vision; Aligning Resources to realise; drive execution; and measure impact. Underpinning all of these is the need to COMMUNICATE consistently and effectively with all stakeholders. Sounds simple, but the global version of this needs to be established and communicated….the question is who is going to step up and create the vision?
- Collaboration is critical. During the most challenging times, we have seen levels of national and global collaboration on an unprecedented scale – not perfect, but very significant – from the development and delivery of vaccines to counteract Covid 19 to the support provided to the Ukrainian people and government in the face of Russian aggression. As we head into the challenges of climate and global economic recovery, these levels of collaboration – between governments, multilaterals, academia and commercial entities needs to become the norm, not the exception
- Skills underpin everything. In the UK, it is estimated that 94% of employees will need to be re-skilled by 2030. It’s a global issue, and needs a global response – to the challenges of the digital economy, climate and sustainability, or the skills required to drive energy transition to name but three.
Oddly, despite the challenging economic outlook, we should view the future with some degree of optimism – the required focus is clear and we can and should trust human capacity to respond in challenging times with creativity and collaboration.
Download the full report: https://bit.ly/GEPJune2023FullEN
Download growth data: https://bit.ly/GEPJune2023Data
Download charts: https://bit.ly/GEPJune2023AllCharts
