We live in an age of major changes. It is important to keep eyes and ears open to make the right decisions for the country’s best interest, said Ojars Kehris, president of the Association of Economists, at the ‘Role of the new US President in world economy and security’ discussion organized by the association.
Economist Karlis Cerbulis mentioned multiple trends that will affect the world regardless of the work done by US President Donald Trump. First of all, the majority of the world’s population cannot follow change, choosing instead to live in the past. This is evident from the outcome of presidential elections in USA and Brexit vote. Economic planners also have to take into account the fact that the world is ageing rapidly. «While tan years ago the number of seniors in had exceeded the number of young people only in a single country, this proportion is now noticed in approximately 30 countries,» – said the expert. According to him, this is the main reason that will negatively impact economic growth rates. Other reasons include low productivity and reduced competitiveness.
Statistics show that economic development has been gradually becoming slower since the end of WWII. Cerbulis doubts Trump’s promise to achieve his country’s economic growth at 5%. According to the economist, many US citizens voted against their interests without understanding that Trump’s promise to reduce migration would make labour more expensive and prices higher. On top of that, Trump is unable to stop the growing automation of production processes, which is likely a bigger cause for unemployment than Trump’s suggested globalization.
Economists call growing inequality in USA the country’s main problem.
Considering Donald Trump’s characteristic instinctive reactions and often change of positions, it is incredibly hard to predict his behaviour. To gain some perspective, Ir magazine’s commentator Pauls Raudseps points to conclusions made by researcher Thomas Wright of Brookings Institution about Trump’s ideological inclinations observed over the course of the past 35 years since his first appearance in public eye. First of all, Trump has said times and time again that USA’s membership in international alliances is disadvantageous. It is not like cooperation established until now will be severed immediately. Nevertheless, the instinctive reaction – you’re on your own – is potentially dangerous for Latvia. Secondly, Trump is negative towards free trade and he has not supported a single US trade agreement. Thirdly, he has more favourable views towards authoritarianism, and democracy is not a value he holds dear. Trump’s proposals and solutions aimed at preserving the current economy’s structure will likely make it inefficient and fail to help people, the journalist says. Latin America’s example shows that people of the same type have come to power with promises to assist economic growth became the reason for a major social conflict. Voters’ dissatisfaction may impact internal stability in USA, which may impact the balance of power in the world.
By limiting participation in international institutions and their funding, the capacity of said organizations and their ability to respond to regional crises will be impacted, believes economist Andris Liepins. He predicts the world will divide into regional groups. Latvia may not gain recognition and attention in those groups. Liepins is concerned over the increase in authoritarian regimes, which is something Latvia will likely experience more of in the coming years. ‘Society is globalizing. At the same time, national interests are voiced more often as well. Contradictions are becoming more and more intense,’ – said the economist.
Politician Martins Bondars believes the world is rules by a stereotype about Trump, who has actually decided to challenge globalization by resolving matters related to business approach, putting aspects of profit on the foreground, urging to reduce expenses on bureaucracy and demanding a solidary division of expenses. Bondars predicts the new US Administration will strengthen ties with national countries, not the European Union. «Transatlantic relation will change. If we do our homework in strengthening legislative, anti-corruption and defence budget, we should be fine,» – the politician said during a recent visit to USA.