"The World in 2020": Trends to Watch

On January 23, the conference "The world in 2020. Opportunities and risks for businesses" took place in Milan. The conference was hosted by Assolombarda and organized by ISPI, in collaboration with SACE.
Speakers from the world of business and economics intervened in the discussion, offering an overview of the risks – both new and consolidated – that companies operating at an international level will have to face in 2020.

The key takeaway from the conference is that we are at singular historic juncture, that brings together a large pool of risks. In particular, some top risks have been identified:

• Global growth slowdown
• Scarce room for manoeuvre in terms of monetary policy
• High levels of corporate debt, which imply credit risk for exporters
• Trade tensions (US-China trade war, decline of multilateralism in international relations)
• Geopolitics (Brexit, climate change, instability in the Mediterranean area)

As we can infer from the list, it is not just the economy anymore: new risks are emerging, and geopolitics is increasingly dominating the scene.

2020 scenarios

Paolo Magri, ISPI Vice President and Executive Director, offered an interesting focus on 2020 geopolitical scenarios.
According to ISPI, 2020 started in the name of transition and uncertainty, following the drift of the consolidated liberal order: former certainties, such as democracy, multilateralism and the centrality of the West, are now under discussion.
Key questions for 2020 concern the following themes:

• Deal or escalation
  On several fronts, recent years have been characterised by strong geopolitical tensions: think of the cases of North Korea, Ukraine and Iran, as well as the US-China trade conflict. As the US represents a key player in all these conflicts, ISPI shows moderate optimism about the possibility of avoiding an escalation: November US elections are approaching, and outgoing President Trump’s chances for re-election could not benefit from the current presence of harsh international conflicts. On the part of the US administration, ISPI therefore expects a year of truces.
• From words to action
  On several fronts, in 2020 it will be necessary to move from words to action: first of all on Brexit, which should be official tomorrow, but also on the climate emergency, which firmly stepped into the spotlight in 2019.
• From action to words
  In other contexts, however, 2020 may represent the moment to proceed in the opposite direction: recent street protests in Latin America (action) will be translated into political demands, and get a response (words) from governments?
  As regards monetary policy, actions have been carried out in recent years by central banks, which have supported their economies through Quantitative Easing. Now, however, interest rates are generally very low, and in some cases negative: central banks are therefore left with words to urge governments to support national economies through an effective fiscal policy action.
  VP Magri also mentioned the situation in Libya, where actions on the battlefield will hopefully be replaced by the words of a political stabilization.