The Future Global Development: Hope and Concerns

6 December, 2023

Valedictory Address at the IIF International Research Conference & Award Summit (IIF-IRCAS), Delhi / India, December 2, 2023 by Prof. Hubert Fromlet, Linnaeus University/Sweden


After many years of fruitful relations with the Indian Institute of Finance (IIF), it is real honor and pleasure for me to have another speech for teachers and students at the very successful academic institution of the IIF. I am speaking also in honor of the late professor J.D. Agarwal, the founder of the IIF.

In many respects, the world has entered a period of disorder. We are confronted with wars, radicalism, political turmoil, protectionism, poverty, suffering refugees, egoism, political extremism and populism, lagging and economically weak and unstable countries – and all this simultaneously. But I also feel happy about India’s progress in the past few decades – and wish  this important catching-up country all the best for the future.

Below, I will sum up six factors of hope and ten factors of concerns (without ranking) that currently occupy my reflections a lot. Obviously, it is easier these days to put together the factors of concerns – but hope and (future) opportunities should not be neglected either. This latter conclusion is important for both financial markets and the corporate sector. We hereby touch briefly on behavioral finance and behavioral economics. Positive or encouraging psychological contributions may play an important role in bad times to develop turning points in the right direction; of course based on fairly realistic expectations.

Factors of concern

¤ The war in the Ukraine.
The Russian war in the Ukraine still goes on as a psychological (human) and financial burden, mainly for the U.S. and Europe.

¤ China’s economic and financial development.
China’s economy and the financial development remains a conundrum that creates uncertainty and concerns because of lagging transparency.

¤ China’s political development.
President Xi Jinping’s autocratic leadership style does not provide China with good predictability – neither when it comes to the economy nor to politics (e.g. vis à vis the U.S., Taiwan)

¤ The U.S. after the next presidential election.
The unpredictable Donald Trump as a possible new president scares me a lot.

¤ The political development of the EU.
The EU will have elections in its member countries in 2024 – with good chances for the extreme right as a big concern for EU unity.

¤ The economic development and reforms in the EU.
Further nationalism in the EU would impede reforms and growth.

¤ Insufficient reforms in emerging markets.
Most emerging countries still need a lot of reforms. An open question may be to what extent China’s growing political influence in many emerging countries impact on market reforms.

¤ Energy and water shortage in rich and less favored countries.
Global water shortage worries me a lot – but also uncertain and uneven global energy supply.

¤ Further increasing protectionism.
Here we have a risk of further reduced global trade expansion and economic growth. 

¤ Last but not least: turmoil on global financial markets.
Negative surprises on global financial markets may “always” be on the cards. As an obvious potential risk, I may particularly mention all the (hidden) financial imbalances in China but also potentially bursting financial bubbles elsewhere.

Factors of hope

¤ Politics – bad political leaders may be replaced sooner or later.
At least in working democracies, one may hope that bad political leaders some day will be replaced by more competent successors.

¤ Increasing global insight of climate improvement needs.
This is a factor where improvement is visible (but still too little).

¤ Global insight that education is a growth-driving need.
There is a growing insight around the world that the creation of new human capital is a main factor for stronger potential growth.

¤ Emerging markets receive growing political attention.
Here, we can currently watch an important development that does not look perfect but will gradually improve self-confidence of many emerging countries, particularly in the so-called South.

¤ Gender equality is improving globally (but still too slowly).
Progress happens in many countries. More still can be done. Nice to see that we in 2023 got another female Nobel Prize Winner with Claudia Goldin.

¤ AI means a lot of hope – but also unpredictable risks.
AI is currently expanding very quickly – creating a lot of new opportunities, particularly in medical research and diagnosis. However, AI risks should not be neglected one single day.

Altogether, 2024 will be an extremely important political year with lots of economic implications and consequences.


Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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New reasons to cry for Argentina?

16 November, 2023

In my earlier professional life, I had the pleasure of having quite frequent visits to Argentina. Argentina is a wonderful country with gentle people and fascinating nature. And all these wonderful football (soccer) players. Unfortunately, it is hard to see how the economy could improve after the ongoing presidential election. Sorry to say that economic policy has been a disaster for many decades. It seems difficult to see promising policy changes in the near future.

The current economic situation

Before looking into the future, it may be worthwhile summarizing briefly the current state of Argentina’s economy. Here are some important indicators:

¤  GDP growth : -4.9 % Q2 (yoy)

¤  Unemployment: 6.2 % (June)

¤  Inflation (CPI): 143 % (Oct)

¤  Current account to GDP: -0.7 % (2022)

¤  Government debt to GDP: 85 % (2022)

Most worrisome among the five key indicators are high inflation and the weak development of GDP. The three other indicators look currently still acceptable.

Will developments turn better?

There are still two presidential candidates in the second election round on November 19. One is the current minister of economy, peronist Sergio Massa, mostly launched as candidate of the middle or even left. As a minister, Massa has already implied different regulations and controls of prices and imports.

The other candidate is the extreme libertarian, anarcho-capitalist Javier Milei – with lots of strange and extreme plans. Only his idea of closing down the central bank, the introduction of the U.S.dollar as Argentina’s currency and the neglect of global warming can make me scared.

After having studied the economic programs of the two remaining  candidates – the most business-oriented candidate has already failed – my political and economic worries about Argentina have not declined. It could be a good idea for the current and next President of the United States to co-operate more with this strongly urbanized and pressured country.

One hundred years ago, Argentina still belonged to the 10 wealthiest countries in the word. After this glorious time, the descente went on almost without interruption. Hard to see that the next president will achieve all the badly needed changes !


Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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Was the current China crisis predictable?

13 October, 2023

Presentation by Hubert Fromlet, Linnaeus University (Linnéuniversitetet), at the Baltic Sea Region/Emerging Markets and China Seminar 2023 in Kalmar

The Chinese economy develops currently very disappointingly. Market expectations from earlier this year were obviously not met – and certainly not positive expectations from earlier years either.

The following question remains interesting: Was the current economic crisis predictable? The answer should be – “yes indeed”.

Too little profound analysis in time

China became the number 1 exporting nation in 2009 and the number 1 total GDP nation in 2016 (in PPP terms). Thus, there were many years to increase knowledge about China. However, foreign (Western) analytical curiosity about the Chinese economic system remained by far too limited ever since the beginning of China’s era as an economic superpower. In many cases, final enlightenment happened as late as in 2022 during the Chinese covid-19 disaster or only this year caused by the serious real estate crisis.

Since the millennium change, I have singled out four kinds of foreign China analysts. They are

¤ specialized researchers at universities and institutes with focus on China,

¤ full-time and part-time China journalists at home or with location in China,

¤ politicians and ambassadors with long-time experience from China,

¤ analysts on global financial markets and forecasters without special analytical skills and focus on China.

Considering these four groups, it seems to be clear that there has been a number of experts indeed well understanding the forthcoming problems in the Chinese economy – but not so many people could be counted. This implies that financial markets – generally expressed – during many years have been standing for the lion share of the foreign interpretation of the Chinese economy; unfortunately, naively based on (wrong) Chinese statistics and the neglect of poor transparency. However, a positive change may be started in the foreseeable future – hopefully giving us conditions for better China analysis also on a global scale.

The visible and neglected warnings signals

One of the main difficulties for economists or other risk managers is the question about the timing of possibly bursting (financial) bubbles or the misery of other serious accidents. This is mostly impossible since aggravating developments usually happen “step by step”. However, “step by step” or gradually should not make managers to forget about a quite early stressed problem or risk. Let’s now turn to some recognizable early warning signals (which may have been given as much as 15-20 years ago):

Warning signals for China’s economy in the past decade   

About bad transparency:

Bernanke/Olson, 2016,

Fromlet, 2013,

Comment: Persistent bad transparency impacts negatively on potential growth.

About poor statistical standards

Ravallion/Jalan, 1999,

Fromlet, 2013, see above

Comment: Statistical shortcomings could/can be found when it comes, for example, to GDP, (youth) unemployment, inflation, government debt and particularly local debt, housing market, bad loans of the banks, subsidies, government support of state-owned companies etc. These shortcomings make economic policy too difficult.

About previous and the current real estate crises

Lu Gao (ADB), 2010,

Fromlet, 2014,[1].pdf?sequence=1

Comment: Developments on Chinese housing and commercial real estate markets should permanently be watched very closely since these two sectors mean so much to the whole economy.

About banks and financial markets

Poon/Wu/Ahmad, 2023,,report%20from%20S%26P%20Global%20Ratings.

Fromlet, 2001,

Comment: Financial risks will remain a top issue for China analysis in the foreseeable future – also in a psychological respect.

About political developments

McBride/Chatzky, 2019,

Fromlet, 2017 (October 26),

Comment: Politics and the economy belong together, particularly in a country like China.


Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


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