Changing culture of world economics. What began in 2017 as the Trans-Pacific Partnership, a trade/cultural liaison between eleven nations, has become the new standard for international trade in the future (street name: supply chains). Yesterday the New York Times wrote “There may well be a fracturing of the world into economic blocs, as countries and companies gravitate to ideological corners with distinct markets and pools of labor.”
The difference in the 21st century is the binding power of the Internet. A good example is the impact on Russia as the entire European Union, currently dependent on Russia for 80% of its oil and gas, has signed an agreement to depend on sources other than Russia. This could not be done so quickly without the tools of social media, the ‘Cloud’ and satellite integration.
Further, culture plays a larger role than it did in the last century: democracies are uniting around other democracies; similarly, autocracies are uniting as well (e.g., China’s Belt and Road Initiative). One of the unresolved issues in future economics is the impact of global warming – today more than half of all nations have failing economies that cannot carry the impact of climate change. Somewhere in the shadows the rich nations will have to make economic shifts in priorities, e.g., in current tax imbalances, discounted trade agreements and larger support of the International Monetary Fund (IMF). Guru suggests this conflagration of shifts will make three nations the owners of all meaningful supply chains: United States, China and India.
Referencing again the New York Times quote, their term ‘fracturing’ suggests many troubling but small nations may be at the center of high energy confrontation. For example, Cuba, Taiwan, Mexico, Venezuela, Iraq, Nigeria, Myanmar, etc. Other medium-sized nations like Hungary, Greece and Brazil will use politics to gain favorable economic relationships between supply chains.