Martin Parkinson is in New York with his boss, Treasurer Joe Hockey, for the IMF meetings over the weekend. Last night he delivered a brilliant speech where he identified four themes, “pillars” he called them, that will shape the global economic and geopolitical landscape in the decades ahead.
These pillars – technology, population and demographics, sustainability, and the global shift in global economic power – appear tied together in what looks like a positive feedback loop for the rise of the developing world.
Crucially, Parkinson notes that it is the intersection of technology and population which is leading to Asia, and in particular the emerging economies of Asia, to take back a place in the global economic and geo-political landscape more in keeping with the size of their populations.
The result of this is that “the centre of economic gravity, which had been shifting from Asia to the West since the Industrial Revolution, is now returning to the Asia-Pacific. In the case of China, its embrace of market forces has unleashed the economic potential of its large population, and that transformation is far from finished.”
By 2050 Parkinson says that that 4 of the 5 largest populations in the world will be in Asia – China, India, Indonesia and Japan.
Key to the challenges of this rise and change in geo-political power is the need for international co-operation and Parkinson speaks of the lessons learnt in the different approaches taken by:
“Comparing the inter-war period with the post-World War II era, the lesson is that global growth and stability requires this co-ordination, and it’s truer now than ever.”
Parkinson highlights that co-operation might be the goal but it remains elusive and in particular, on the theme of sustainability and climate change, he says “there is a significant gap between the scale and nature of the challenge and the scale and nature of the global consensus and arrangements in place to manage it.”
“Closing this gap through effective global cooperation is the only way to address these global challenges.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.