In response to a question by host Nilesh Shah of Kotak MF on the ‘mega’ threats that the world currently faces, Roubini first mentioned deglobalisation, derisking and an increasingly more fragmented world.
In this context, he discussed the volatile Taiwan issue, South China Sea and the two big ongoing wars — Israel and Ukraine.
There has been hyperglobalisation, and now the world is seeing gradual protectionism, he said, underling the need for emphasis on economic security over economic efficiency in the allocation of resources.
Nilesh Shah and Roubini in a fireside chat at the ET WLF, Delhi
Demographic strength is a big issue in economies, said the Professor Emeritus, Stern School of Business, adding that demographic trends are also essential in this context.Another coming problem is that pandemics will become more virulent and frequent, he added. He also spoke on the challenges stemming from a warming world.To make growth inclusive is a challenge, Roubini observed, saying that there is a need to try and defend democratic capitalism.Noting that there currently is some amount of safety for global economies from geo-political tensions but not from slower growth, Roubini underlined that things generally are not going in the right direction.
How Roubini sees the road-ahead for America
On the nearing US presidential elections, Roubini said he saw some risk of violence. He added on a cautionary note that inflation would be higher and growth would be lower if Trump won.
The fiscal situation is the biggest risk for the US despite it being ahead of some of the other major economies, Roubini noted.
The results of the coming elections will determine if the US will remain stable politically and economically, or go volatile, he added.
Roubini on China & the India vs China debate
On China, Roubini said he saw an ageing population as the top emerging challenge for the country. Discussing the ongoing talks around China taking over the US in terms of growth, he said such a notion was completely misguided.
While India may not formally be middle income country, the middle income trap is more possible in China’s case, Roubini remarked.
Making a comparison between India and China, Roubini said that while in the past few decades China was growing much faster than India, in the next few decades the situation will be opposite.
Roubini’s to-do list for India
The top economist said on a lighter note that the felt a vibrancy and an energy as soon as he landed in Delhi.
As for what India would require for its economic success to continue, Roubini said that there is a need to further expand the reforms that have been announced so far.
In the current scenario, a coalition government means that while reforms will now be slower, they will also be more sound and stable, Roubini said. In a big thumps-up for India, he said he was quite optimistic that India will be a greater global superpower in times to come.
He, however, made this superpower forecast for India with a rider — for that to happen, he said, the reforms must continue.
Roubini on the elephant in the room
Speaking on the pressing issue of artificial intelligence and its outsize impact, Roubini predicted that anything that has to do with AI will radically change the world.
Highlighting the matter of leveraging AI tech, he noted that the pace of tech revolution appears to be very very fast.
Roubini made it a point to underline that India has a significant advantage as far as IT is concerned.
With respect to AI, he also sounded a major cautionary note — that misinformation, disinformation and deepfakes remain a challenge.
Roubini also spoke at length on how cyber warfare is becoming a serious threat for both governments and private sectors. The world is going to need bigger weapons to fight bigger wars, he observed.
Content Source: economictimes.indiatimes.com