The Monetary Authority of Singapore's Tharman Shanmugaratnam said that no global economic rebound will be likely without the recovery first of developing nations during the recent World Economic Forum Davos Agenda 2021.
After governments «acted forthright […] to at least put a bottom to the possible collapse» of economies and public morale, according to the chairman of Monetary Authority of Singapore, Tharman Shanmugaratnam. But this year, the «cone of possibilities» is narrower and will be primarily dependent on the spread of the virus and at which point herd immunity is achieved.
«I think we have to pay less attention to projections or central forecasts of growth and think more in terms of the range of possibilities,» explained Shanmugaratnam, who is also a senior minister and coordinating minister of social policies for Singapore, in a virtual session at the forum.
«[I]n other words, think of uncertainty when we shape public policy [and] when we shape the way we think generally.»
EM Ex-China Recovery
After the pandemic is conquered, Shanmugaratnam believes that in order for the global economy to return to full capacity, it will firstly require developing economies to lead the recovery.
«What’s important, I think, is that we recognize that globally, no economies, including the most advanced economies, are going to get back to normal until the large part of the world that we call developing – particularly the developing world outside China – recovers from this crisis,» Shanmugaratnam said.
Next Major Growth Driver
From around $1.2 trillion in 2000, China has seen unprecedented growth that led its economy to expand 10-fold to $14 trillion, closing the gap with world leader U.S., at under $21 trillion. But in the coming decades, Shanmugaratnam believes emerging economies elsewhere will not only lead the rebound also be home to the next «largest opportunities for growth».
«In the last 20 years, the emerging world outside China contributed about a third of global growth with everyone benefitting from it,» he said, highlighting future investments in infrastructure and international networks.
«And if you look at the next 10 years, next 20 years – that’s where the largest opportunities for growth are.»
