Davos | United Nations head Antonio Guterres on Thursday said trade tensions impacting the world economy were essentially a “political problem” and warned that a fragmented response to global challenges was a recipe for disaster.
In a special address here at the World Economic Forum Annual Meeting 2019, he also said the world was today facing challenges that are more and more interlinked but the responses are fragmented.
“If this is not reversed, it’s a recipe for disaster,” said Guterres, a former Portuguese Prime Minister who has been Secretary-General of the UN since January 2017.
He said if one looks at global politics and geopolitical tensions — with the global economy, the mega-trends, climate change, the movement of people and digitalization — the truth is that they are more and more interlinked, interfering more and more with each other and indeed the problems are global but the responses are fragmented.
“Looking at the global economy, we are now growing still with a relatively acceptable GDP growth, but slowing down, and everybody agrees that there are dark clouds in the horizon and there are risks,” he noted.
“The first risk is probably trade tensions, and trade tensions are today essentially a political problem.
“A second risk of course related to the debt that is much higher than in the last financial crisis, and which is limiting the capacity to respond to any potential emerging crisis, and also limiting the capacity of states to implement the projects that would be necessary to achieve the sustainable development goals,” he said.
“Then we have the instability in financial markets, and clearly it’s a matter of confidence, so political events have an influence on that.
“…if one looks at the shutdowns and the Brexit saga, there is a certain sense that political systems do not know exactly what to do when dealing with problems that have strong economic impacts, and so that is a factor of lack of confidence and a factor of lack of confidence creates or increases instability in the markets,” he said.
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