The world’s prominent organizations such as the International Monetary Fund (IMF), the World Bank and the Organization for Economic Cooperation and Development (OECD) foresee that trade wars, global climate change threats, disruptive technological developments and the war of hegemony between the great powers will continue to occupy the world’s agenda in 2020. These four major and long-term risks and threats are doomed to hit global politics. That means international growth, trade, production and employment will be shaped by these negative developments. The year 2020 is thought to be one of global injustice, as the imbalanced use of wealth and the lack of equal access to natural resources will come forward. Sadly, health services are another problem to solve and the insensitivity of superpowers such as the U.S. in particular toward pollution is another major problem at hand. In the midst of all these injustices and inequalities, the global economy will continue to witness trade and currency wars. Giant companies will try to swallow minor ones. Moreover, the U.K.’s divorce deal, the EU’s intra-crisis, NATO’s ambiguous future, cybersecurity attacks, the consumer malaise on a global scale and the endless greediness of the banking system worldwide will continue. Meanwhile, the global debt spiral, which is expected to approach $260 trillion at the end of the year, triple the global national income, will continue to be one of the priority agenda items. The leading economists are worried that if the economically powerful countries attempt to postpone the problems of the global system with short-term public finance, i.e. budgetary measures and expansionary monetary policies, in other words with temporary measures to save the day, the world will be dragged into greater troubles for decades to come. Another concern for 2020 is the deterioration of economic outlook due to concerns of uncertainty about when global trade and exchange wars will end. Nevertheless, 2019 is a candidate to go down in history as one of the years where risky assets earned the most. In other words, the global financial system professionals are trying to invite institutional and individual investors to invest in things like the orchestra, which was playing until the last minute in the Titanic, which sank by running into an iceberg. The year 2020 will also be one in which we need to carefully monitor global commodity prices, especially oil and gold prices. Future and beyond The upcoming year will be a cornerstone to a decade where countries who are in intense competition with each other in the field of trade, energy and transportation corridors, face conflicts. We have already observed the signs of this many times in 2019. The latest development was the decision to impose heavy sanctions on companies involved in the North Stream-2 project between Russia and Germany, which came into play when U.S. President Donald Trump approved the U.S. 2020 defense budget. Germany saw this step as a heavy intervention in the internal affairs of its country and of the European Union. On the other hand, the U.S. side clearly states this message: "I lifted the 40-year ban on the export of energy from American lands at the end of 2015. I sold the first oil to Italy and the natural gas to Poland. I also want to export energy to the biggest energy consumer – Europe. So, I want you to buy oil and natural gas from me, not mainly from Russia and Iran. " Another goal of the U.S. is undoubtedly to reduce Russia's export revenue mainly coming from energy. This is because Russia, which has a foreign trade surplus thanks to its energy exports, can protect its value and economy against global manipulations and attacks with its strong central bank reserves, while keeping new opportunities in the defense field and keeping hard power opportunities alive. However, does the U.S. and Russia have interests in Syria, Iraq, even Libya and the Eastern Mediterranean conflict? Conversely, it largely overlaps. The more the Middle East is dragged into chaos and grapples with regional problems, or the Eastern Mediterranean experiences severe tensions and uncertainty, delaying the countries in the region from selling their energy derivatives to Europe, the better it is for the U.S. and Russia. Therefore, Turkey, who has assumed a meaningful and valuable initiative in the name of regional peace and tranquility, especially for security in Syria and Iraq, and stabilization of Libya, is also offering Iraq, Lebanon, Jordan, Palestine, Israel and even Egypt to act together in order to meet Europe's energy needs. Greece and the Greek Cypriot Administration, on the other hand, continues to seek ways to bypass Turkey and meet the energy demand of Europe, siding with Israel. The historic agreement that was carried out between Libya and Turkey is of critical importance in terms of not only the regional energy corridors but also the regional trade corridors and regional transport corridors. As the decade takes its shape, we will always remember the importance of this "geo-strategic" and diplomatic step.
About the author
Kerem Alkin is an economist, professor at Istanbul Medipol University. He currently serves as the Turkish Permanent Representative to the Organisation for Economic Co-operation and Development (OECD).