Connect with us

Economy

Greater Shift in China’s State of Affairs: Issues Mounts in Economic Growth

Published

on

With the Two Sessions, China’s biggest political gathering of the year ended, the next major political event of the country would be the 20th National Congress this autumn. By convention, the Chinese leadership will be partially replaced after the National Congress. Premier Li Keqiang stated at the Two Sessions press conference that this year will be his last year as premier. There is no doubt that 2022 will be a year of huge changes in China’s politics.

Correspondingly, what will happen to China’s economy this year? Based on the country’s challenging domestic and international scenario during the last two years, China’s economy is unlikely to be easy sailing in 2022. A more likely scenario is that its economy will confront significant difficulties. Following the low base impact caused by the COVID-19 pandemic, the country’s economy will undergo several changes.

According to the government’s work report, the main expected goals for this year’s development include GDP growth of approximately 5.5%; more than 11 million new urban jobs created, Urban Surveyed Unemployment Rate to be controlled within 5.5% throughout the year; CPI growth at about 3%; synchronization of the citizens’ income growth and economic growth; imports and exports have been stabilized and improved with the balance of payments stable. Other goals include grain output to remain above 1.3 trillion kilograms; improvement of ecological environment with a continuous decline in major pollutants. Furthermore, during the 14th Five-Year Plan period, the country’s energy consumption intensity target will be assessed as a whole while some flexibility will be maintained, and the newly included renewable energy and raw material energy consumption will not be included in the total energy consumption control.

In terms of fiscal policy, the deficit ratio this year is planned to be around 2.8%, which is lower than last year. For China, the fiscal expenditure in 2022 has expanded by more than RMB 2 trillion over last year. The central government’s expenditure at its own level will increase by 3.9% this year, of which the central department’s expenditure will continue to grow negatively. Transfer payments from the central government to local governments increased by about RMB 1.5 trillion, with a scale of nearly RMB 9.8 trillion, an increase of 18%, the largest rise in many years.

The economic development for China this year will be centered around the target of 5.5% growth. This is the first time in more than three decades that China has set its annual economic growth target below 6%. Although it is not news that the country’s economy has entered the stage of medium-high growth from high-speed growth, it is still a major event for the Chinese economy to set the growth target at the level of approximately 5%. As the world’s largest emerging market country, China’s economy is comparable to a heavy-duty train with many structural problems. It must maintain a certain speed; if it is too slow, some components of the train would fall off. Furthermore, China is dealing with an ageing population before the country amassed adequate wealth. Under such circumstances, its most fundamental task is to maintain steady growth.

In the past two years, the global economy has been impacted by the COVID-19 pandemic. Facing such disturbance, ANBOUND proposes that China’s economic status should be evaluated based on a three-years average. We also noted that, owing to the low base impact, 2021 will have the greatest economic growth rate in three years, but that the most crucial economic growth rate will be in 2022, which will define the country’s future economic growth condition. National policy-wise, China’s economic challenges will also be taken into account in terms of national policy. In 2020 and 2021, the two-year average growth rate of China’s economy was 5.1%. By the end of 2021, its GDP reached RMB 114 trillion.

China’s GDP Scale and Growth, 2001 to 2022

Source: China’s National Bureau of Statistics, Graphics: ANBOUND

In the last 10 years, China’s economic growth has slowed. During the period of the 18th National Congress, China’s economic growth rate dropped from 7.7% to 6.7%; and during the 19th National Congress, it continued to slow down to 5.1% (based on the two-year average growth rate from 2020 to 2021). Between the years, China’s economic growth rate fell by 2.6 percentage points. Except for the 8.1% growth rate in 2021 due to the base effect, there is basically a linear downward trend. It must be admitted that for China, with a population of more than 1.4 billion and an increasingly aging at that, a significant slowdown in the economic growth rate of 2.6 percentage points in the past decade presents a daunting challenge. If the usual feature of an economic recession time is a “generalized loss in economic vigor,” China’s economic recession danger cannot be overlooked.

To counter the impact of the pandemic and stabilize economic growth, the Chinese authorities have adopted various economic policies in recent years, and the list of that include proactive fiscal policy, new infrastructure, internal and dual circulation, high-tech and low-carbon development, and so on. All these approaches are aimed at achieving the balance between stabilizing growth, structural adjustment, and risk prevention. At the Two Sessions this year, Premier Li used the metaphor of “mountain climbing” in describing the economic growth rate of 5.5%.

According to the size of China’s economy 10 years ago, an increase of 10% growth would require RMB 6 to 7 trillion; however, the same rise would demand RMB 9 trillion now. It’s like climbing a 1000-meter mountain; if you just need to climb 10% of the way, 100 meters will suffice. Yet, in climbing a 3,000-meter mountain, to climb 5% would mean one has to climb 150 meters; and the conditions for climbing will also change. The climber has to face lower air pressure, and lesser oxygen, as one climbs higher. The pace would seem to slow down, yet the climber is actually going higher.

What Premier Li described is indeed the actual situation. However, it should also be noted that as the base number increases, if the economic growth slows down at this time, the resulting gap in economic growth will also be bigger. For instance, for a base of 100 trillion, a 2.6-percentage-point slowdown in growth would result in a 2.6-trillion increase in the disparity.

China has actually benefitted from the pandemic in the past two years, because on the one hand, it has strengthened its position as the “world’s factory” due to its effective pandemic preventive measures, and on the other hand, the United States and other countries have launched macroeconomic stimulus plans which have in turn increased global demand, thereby boosted China’s exports and improved its economic growth. In RMB terms, the import and export of goods for China in the whole year of 2021 increased by 21.4% year-on-year. Among them, exports increased by 21.2% year-on-year, imports increased by 21.5% year-on-year, and surplus increased by 20.2% year-on-year. The pull of the external market is an important reason for its two-year average growth of 5.1%.

If the aforementioned distinguishing factors boosting China’s export development fade away in 2022, as we predicted before, the country’s economic momentum may diminish. In fact, signs of this are already starting to appear. According to data from China’s General Administration of Customs, in the first two months of 2022, the imports and exports increased by 13.3% year-on-year. Among them, exports increased by 13.6% year-on-year, imports increased by 12.9% year-on-year, and trade surplus rose by 16.3% year-on-year. Compared with the foreign trade data for the whole year of 2021, the year-on-year growth rates of import and export, export, import and surplus in the first two months of this year have slowed down by 8.1, 7.6, 8.7 and 3.9 percentage points respectively.

In addition to changes in foreign trade, the recovery of domestic consumption in the past two years has remained sluggish, which drags down the overall economic recovery. Judging from the data, in 2021, the total retail sales of domestic consumer goods was RMB 44,082.3 billion, an increase of 12.5% over the previous year, and the average growth rate for the two years was only 3.9%. At the Two Session this year, Premier Li admitted that the current consumer demand is indeed relatively weak, mainly due to the weak offline consumer demand. If a large number of companies are closing down, it will severely take hold of market vitality and the living standards of the people.

Furthermore, the impact of the Russia-Ukraine war is a new shock factor that the Chinese economy will face. This war of unknown duration will significantly drag down the European economy and, to a certain extent, the Chinese economy as well. If we consider the deteriorating geopolitical context in which China will be operating in the future, economic growth this year or even in the next years may be put under much more strain.

All in all, China’s economic growth is facing multiple challenges this year. If the 5.5% growth target can be truly achieved, this will be considered a satisfactory economic achievement. However, against the historical backdrop of China’s economic development, this is not an impressive figure. On the contrary, it is worth noting that China will be in a process of continuous economic slowdown for a long time to come. The rate of 5.5%, while being the lowest target in years, is still a difficult figure to achieve. In the later years of the 14th Five-Year Plan, China’s economy may need to strive to maintain a 5% growth.

Mr. He Jun takes the roles as Partner, Director of China Macro-Economic Research Team and Senior Researcher. His research field covers China’s macro-economy, energy industry and public policy

Continue Reading
Comments

Economy

China and the Indo Pacific Economic Framework

Published

on

Image: Twitter@POTUS

The Indo Pacific Economic Framework (IPEF) signed by a total of 13 countries, on May 23, 2022, in Tokyo is being dubbed by many as a means of checking China’s economic clout in Asia and sending out a message that the US is keen to bolster economic ties with its allies and partners in the Indo-Pacific.

Many Chinese analysts themselves have referred to the IPEF as ‘Economic NATO’. China has also been uncomfortable with the Quadrilateral Security Dialogue (Quad) which consists of US, Australia, Japan and India , and has referred to Quad as an ‘Asian NATO’ – though members of the grouping have categorically denied that Quad is an ‘Asian NATO’

Countries which joined the US led IPEF are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. These countries together account for 40% of the global GDP. The four key pillars of the IPEF framework are;  supply-chain resilience; clean energy, decarbonisation and infrastructure; taxation and anti-corruption; and fair and resilient trade.

While launching the plan, US President, Joe Biden said:

‘We’re here today for one simple purpose: the future of the 21st Century economy is going to be largely written in the Indo-Pacific. Our region,’

US Commerce Secretary Gina Raimondo while commenting on the IPEF said that it was important because it provided Asian countries an alternative to China’s economic model.

A few points need to be borne in mind. First, many of the countries — Australia, Brunei, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam – which have signed the IPEF are also part of the 15 nation Region Comprehensive Economic Partnership (RCEP) trade agreement of which China is a key driver (Indonesia, Phillipines and Myanmar have not ratified RCEP). RCEP accounts for 30% of the world’s GDP. Trade between China and other member countries has witnessed a significant rise, year on year in Q1 of 2022.

Second, many of the countries, which are part of the IPEF, have repeatedly said that they would not like to choose between China and US. The Singapore PM, Lee Hsien Loong  who was amongst the first to hail the IPEF, has emphatically stated this point on a number of occasions. In an interview to Nikkei Asian Review on May 20, 2022, Lee Hsien Loong reiterated this point. In fact, Lee Hsien Loong even pitched for making China a part of the Comprehensive and Progressive Partnership for Trans Pacific Partnership (CPTPP) (TPP the precursor to the CPTPP was a brain child of the US). Said the Singapore PM:

‘We welcome China to join the CPTPP,’.

Here it would be pertinent to point out, that China had submitted an application for joining the CPTPPIN September 2021. In the interview, Lee Hsieng Loong did state that countries in Asia needed to have good relations with US, Japan and Europe.

 Indonesia’s Trade Minister Muhammad Lutfi who attended the signing of the IPEF on behalf of the President Joko Widodo stated that he did not want to see IPEF as a tool to contain other countries.

One of the reasons why many countries are skeptical about the IPEF is the fact that it does not have any trade component. A number of ASEAN member states have pointed to the IPEF making no mention of tariffs and market access as one of its major draw backs. At the US-ASEAN Summit, held earlier this month Malaysian Foreign Minister, Ismail Sabri Yaakob had referred to this point. Like many other countries, Malaysia has welcomed the IPEF, but in the immediate future sees RCEP as a far greater opportunity.

US President Joe Biden has not deviated significantly from the policies of his predecessor, Donald Trump, with regard to trade and the US is unlikely to return to the CPTPP at least in the immediate future.  Biden and Senior officials in his administration have spoken about the need to check China’s growing economic influence, specifically in Asia, and to provide an alternative model. While the US along with some of its Indo Pacific partners has taken some steps in this direction (only recently, leaders of Quad countries during their meeting at Tokyo announced that they would spend USD 50 billion, in infrastructural aid and investment, in the Indo Pacific.

 Given his low approval ratings, and diminishing political capital it is unlikely that he is likely to change his approach towards trade significantly. US Trade Representative Katherine Tai said the TPP was ‘fragile’, and that there was no domestic support for the same.

 In conclusion, while the IPEF does have symbolic importance it is important to bear in mind that many signatories themselves have close economic relations with China and would not like to get trapped in competition between US and China. Unless the US re-examines its approach towards trade, which is highly unlikely, and unless countries which are part of the Indo-Pacific vision are able to strengthen economic cooperation, China is likely to dominate Asia’s economic landscape – even though there is growing skepticism with regard to the same.

Continue Reading

Economy

World Leaders Pledge to Fight for Freedom and Values with History at a Turning Point

Published

on

World leaders came together at the World Economic Forum Annual Meeting 2022 against a backdrop of deepening global frictions and fractures and a once-in-a-century pandemic.
 
On Monday, President Zelenskyy addressed participants live from Kyiv. He said that the words “turning point” have “become more than just a rhetorical figure of speech” and emphasized that “values must matter”.
 
The war in Ukraine has created immense human suffering. And the wider impacts of the conflict are being felt around the world.
 
The World Economic Forum called for a “Marshall Plan” for the reconstruction of Ukraine. “In Davos, our solidarity is foremost with the people suffering from the atrocities of this war,” said Klaus Schwab, the Forum’s Founder and Executive Chairman.  
 
The Special Dialogue on Ukraine session brought together 70 global CEOs alongside the Prime Minister of Ukraine (who joined virtually), with the President of the European Commission, the Foreign Minister of Ukraine and the First Deputy Prime Minister of Ukraine at Davos in person, alongside other dignitaries. CEOs offered concrete ways of how their companies can support the Ukraine government and its private sector in the reconstruction of Ukraine now, rather than waiting for the war to end.
 
The World Economic Forum offered its support in this endeavour, advancing discussions on new partnerships and market-driven solutions to enable a scaled up response to the humanitarian situation in Ukraine and other global crises.
 
Meeting in person after a two-year hiatus, there were over 450 sessions at the meeting, which brought together 2,500 leaders and experts from around the world, including 300 government leaders and 50 heads of state. It was a critical opportunity to foster stronger global and regional cooperation to restore stability and create real impact.
 
Nature and climate
 
The energy crisis, exacerbated by the war in Ukraine, must not deepen the world’s dependence on climate-warming fossil fuels. During the week, there was a focus on accelerating clean energy and climate solutions:

More than 50 companies have now joined the First Movers Coalition, which was launched by US President Biden and the World Economic Forum at COP26 to decarbonize the heavy industry and long-distance transport sectors – the sectors responsible for 30% of global emissions.

This week at Davos, John Kerry, the United States Special Presidential Envoy for Climate, joined these companies in sending a powerful market signal to commercialize zero-carbon technology. Their market cap represents about $8.5 trillion across five continents and they are making unprecedented advance purchase commitments by 2030.

Eight new countries have joined the First Movers Coalition as government partners – Denmark, India, Italy, Japan, Norway, Singapore, Sweden and the UK. All are committed to create early markets for clean technologies. Alongside the United States, there are nine committed government partners.

Some 70+ CEOs of the CEO Climate Leaders Alliance – the largest CEO-led climate action group globally – agreed on taking bold action to translate pledges into tangible emission reductions in line with 1.5C. Covering 26 countries and 12 industries and representing 120 companies in total, the alliance has a combined annual emission footprint greater than India or the EU.

CEOs agreed to push for progress on critical 2030 and 2050 global climate targets, mobilizing dialogue between governments and the private sector to deliver a successful outcome at COP27 in Sharm el-Sheikh.

China’s Special Envoy for Climate Change Xie Zhenhua announced his country’s contribution to plant and conserve 70 billion trees by 2030. The World Economic Forum and China Green Foundation will undertake concrete measures together through 1t.org China Action to support the fulfilment of China’s contribution.

A new $15 million investment over five years was announced to support entrepreneurs who can drive innovation in freshwater resource management – the initiative will be hosted by our UpLink platform.

CEOs also held dialogues with regional climate envoys, COP26, COP27 and COP28 leadership to make progress on global climate policies, including the importance of setting a global price on carbon and other key policy measures to fast-track the transition.

Youth activist Elizabeth Watuthi spoke on Safeguarding our People and Planet, sharing the local perspective and direct impacts of climate change in vulnerable communities, and youth climate activist Vanessa Nakate, speaking at the Staying on Course for Climate Action session, said: “When we talk about climate change we’re also talking about food security. It’s really important to understand the intersections of this crisis.”

The Forum’s Global New Mobility Coalition is launching the Urban Mobility Scorecards initiative. Over 30 companies, such as Visa, Hyundai, Uber, Volta Trucks and TIER, will work with policy-makers from cities and regions to better understand challenges and solutions to create a shared, connected and decarbonized mobility ecosystem.

A new Global Commission on the Economics of Water was launched to redefine the way we value and incorporate water into economic decision-making. It is led by Ngozi Okonjo-Iweala, Director-General of the World Trade Organization; Mariana Mazzucato, Founding Director of the UCL Institute for Innovation and Public Purpose; Tharman Shanmugaratnam, Senior Minister of the Government of Singapore; and Johan Rockström, Director of the Potsdam Institute for Climate Impact Research. 

Economic transformation

The Forum’s Chief Economists Outlook report warned of “dire human consequences” from the fragmentation of the global economy. It said that developing economies face trade-offs between the risks of debt crisis and securing food and fuel. The rising cost of living hits the world’s poorest communities hardest. The Ukraine conflict has exacerbated already fragile energy and food systems. Co-investment by the public and private sector is critical to restarting a new era of growth, one that integrates inclusion and sustainability at its core rather than an afterthought, and is the best way forward for shared prosperity.

A leading group of CEOs, ministers and academic experts agreed on the roadmap for the Market Creators Alliance to develop fairer principles for governments, businesses and public-private partnerships on innovation and industrial development. This will be launched later this year.

Four Futures for Economic Globalization: Scenarios and Their Implications outlines how the nature of globalization may shift as economic powers choose between fragmentation or integration in both the physical and virtual dimensions of the world economy.

The Government of Rwanda and the United Arab Emirates announced that they are joining the Food Action Alliance for driving food systems transformation. They are part of a growing group of first-mover countries. The new partnership will harness innovation to accelerate country goals on food security and nutrition, inclusive growth, sustainability and climate resilience, in line with the UN Sustainable Development Goals.

Work, wages and job creation

The Jobs Consortium, a group of public and private sector leaders focused on investment in the jobs of tomorrow, held their inaugural meeting in Davos to drive a global recovery and investment agenda for the next two years. They aim to create growth in the jobs of tomorrow, new standards in the workplace and better wages for all, focusing on social, green and tech jobs as the high-growth, job-creating sector of the future.

Over 6 million refugees have left Ukraine to other countries since February, adding to the estimated 31 million people worldwide forcibly displaced across borders. The Refugee Employment and Employability Initiative was launched, a coalition of chief human resources officers from over 140 organizations who support the integration of Ukrainian refugees in Europe. This will pilot its work supporting learning and job opportunities for Ukrainian refugees in Europe in its first phase – aiming to expand to other regions of the world in the future.

Education and skills

The Reskilling Revolution initiative, launched at the Annual Meeting in 2020, has now mobilized a community of over 50 CEOs, 350 organizations and 15 countries all working towards a vision of giving 1 billion people better education, reskilling and upskilling. A network of country accelerators in Bahrain, Bangladesh, Brazil, Cambodia, Georgia, Greece, India, Oman, Pakistan, South Africa, Turkey and the United Arab Emirates, with support from Denmark, Finland, Singapore and Switzerland, and a consortium of the largest online learning platforms are working together.

The initiative will now expand beyond adult learning to add a focus on education for children and youth. These efforts will be taken forward by a new Education 4.0 Alliance, bringing together 20 leading education organizations, and Bangladesh has become the first country to adopt the education accelerator model in Davos.

A new report, Catalysing Education 4.0 Investing in the Future of Learning for a Human-Centric Recovery, focuses on preparing today’s generation of school-age children with better collaborative problem-solving that could add $2.54 trillion – over $3,000 per school-age child – from this one skill alone.

Diversity, equity, inclusion and social justice

The Gender Parity Accelerators are a global network of national public-private collaboration platforms working to close existing gender gaps and reshape gender parity for the future. This year two G20 countries, Mexico and Japan, will initiate Gender Parity Accelerators in the coming months.

The Valuable 500 initiative announced a unique mentorship programme – Generation Valuable – for people with disabilities to build the future executive leadership, driving disability inclusion by revolutionizing the boardrooms of tomorrow.

The Edison Alliance launched a new programme to speed up digital inclusion in the life-critical sectors of health, education and finance. It launched a new network of “lighthouse countries”, including Bahrain, Bangladesh and Rwanda, working with the UN Development Programme to further the alliance’s 1 billion lives vision of providing people with affordable, digital solutions by 2025.

Trade and supply chains
 
Business and government leaders highlighted the potential of trade facilitation, finance and trade technology to tackle supply chain barriers. Trade ministers gathered in Davos to hear from business and civil society and prepare for next month’s World Trade Organization Ministerial Conference. Leaders called for diversifying trade and investment relationships to bolster development and support common values. Indigenous and labour leaders called for inclusive outcomes from trade. Food security was high on the agenda.

The World Investment for Development Alliance was launched together with OECD Secretary-General Matthias Cormann, the World Bank, UNCTAD and other partners, to increase collaboration in addressing investment policy and practice.

The Forum’s Platform for Trade and Investment, together with the Digital Cooperation Organization, launched a Digital FDI initiative to support investment in the digital economy in developing economies.

The World Economic Forum convened Friends of the Africa Continental Free Trade Area, a group of heads of state and business leaders, which advanced a framework on how public-private partnerships can support the implementation of the AfCFTA.

Global supply chain disruptions make it harder to reach children with life-saving supplies. This week UNICEF co-signed an extended charter with the World Economic Forum and 16 logistics leaders to prioritize support for humanitarian supply transports.

Health
 
COVAX the multilateral initiative aimed at ensuring equitable access to life-saving COVID-19 vaccines was conceived in Davos two years ago. In the past seven days it has shipped its 1.5 billionth dose.
 
The COVID-19 pandemic has caused enormous disruptions to healthcare – reversals in testing and treatment of life-threatening diseases. Crucial steps have been taken to help counteract these setbacks. These include:

The Global Fund to Fight AIDS, tuberculosis and malaria announced its first pledge from the private sector in Davos. It has raised a third of the $18 billion needed to reverse setbacks caused by the pandemic.

Building on recommendations developed in partnership with the European Union COVID-19 lung cancer taskforce, the Forum, together with the Lung Ambition Alliance, launched the Global Lung Cancer Collaboration to bring together organizations in healthcare delivery, research, diagnostics, biopharma, patient advocacy and non-governmental organizations to facilitate greater collaboration and solutions to eliminate lung cancer as a leading cause of death.

An Accord for a Healthier World was launched at Davos by Pfizer this week, providing all its current and future patent-protected medicines and vaccines available in the US or EU on a not-for-profit basis to 45 lower-income countries. Pfizer called on global health leaders and organizations to join the accord, bringing their expertise and resources to close the health equity gap and help create a healthier world for 1.2 billion people. Rwanda, Ghana, Malawi, Senegal and Uganda are the first five countries to commit to join the accord. Health officials in these countries will help identify and resolve hurdles beyond supply to inform the roll-out in all 45 lower-income countries.

The World Economic Forum’s Platform for Health and Healthcare signed an MoU with Saudi Arabia in support of the Global Coalition for Value in Healthcare. This partnership will increase collaborative efforts to build a global healthcare movement on value-based health systems and people-centred care, alongside global government policy-makers, industry and academia through accelerating public-private partnerships.

Tech frontiers

The World Economic Forum unveiled the concept of a Global Collaboration Village, a major initiative to harness the potential of the metaverse to create a place where international cooperation can be strengthened.

The Defining and Building the Metaverse initiative was launched bringing together key stakeholders to define and build the parameters of an economically viable, interoperable, safe and inclusive metaverse.

The Global Coalition for Digital Safety has committed to developing emergency protocols for protecting digital safety during wars, particularly to tackle online exploitation and abuse, violent extremist and terrorist content, and mis- and disinformation. This will complement the broader work of the coalition to make the internet safer by tackling harmful content and conduct online.

The Annual Meeting hosted its first public panel on Unlocking Quantum, with leaders committing to focus on how technologies and deeper analytics could transform decarbonization and accelerate the fight against climate change. They will work with Qlimate, Volkswagen and the Netherlands government on identifying and scaling solutions.

Malaysia’s Finance Minister announced his country will be the first location for a Centre for the Fourth Industrial Revolution (C4IR) in the ASEAN region. And, the Dubai Future Foundation, with support from the Government of UAE, has signed a collaboration agreement to continue the operations of C4IR UAE. The centre will focus on blockchain, artificial intelligence and other emerging technologies. 

Samantha Cristoforetti became the first astronaut to join the Annual Meeting live from space aboard the International Space Station, orbiting the planet at 17,500 miles an hour. The Live from Space session looked at how government and business can collaborate to ensure that space exploration benefits people and the planet.

In a closing address, Olaf Scholz, Chancellor of Germany, called for “a sustainable, resilient globalization which uses natural resources sparingly and, above all, takes the needs of future generations into account”, adding that a new approach to globalization would be “based on solidarity which benefits all citizens – in all parts of the world.”

Continue Reading

Economy

Reskilling Revolution: Leaders Preparing 1 Billion People for Tomorrow’s Economy

Published

on

Investing broadly in the skills of the future for both today’s and tomorrow’s next-generation workforce could add an additional $8.3 trillion in increased productivity to the global economy by 2030.

The Reskilling Revolution initiative, a coalition of 50 CEOs, 25 ministers and 350 organizations committed to realizing these gains for their economies, societies and organizations, marked two years of progress at the World Economic Forum Annual Meeting 2022 in Davos today. Their work will benefit over 100 million workers on their journey towards reaching 1 billion people by 2030 with better education, skills and economic opportunity.

Accelerating the Reskilling Revolution

Global inequities in lifelong learning and childhood education, a pandemic that closed schools and workplaces and rapid technological change are highlighting the need to double down on reskilling, upskilling and the future of learning. The Reskilling Revolution initiative, launched at the World Economic Forum’s 50th Annual Meeting in January 2020, is working to provide 1 billion people with better education, skills and economic opportunity by 2030.

At its heart is a commitment from over 50 CEOs to inspire global business leadership on the upskilling, reskilling and human capital investment agenda. By working together with a growing network of national-level country accelerators launched to date in 12 countries – Bahrain, Bangladesh, Brazil, Cambodia, Georgia, Greece, India, Oman, Pakistan, South Africa, Turkey and the United Arab Emirates, with knowledge support from Denmark, Finland, Singapore and Switzerland – the Reskilling Revolution has mobilized a multistakeholder community of over 350 organizations across 12 countries and is on track to benefit 100 million people on its journey towards 1 billion.

“In an era of multiple disruptions to the labour market – the pandemic, supply chain changes, the green transition, technological transformation – the one ‘no regret’ investment all governments and business can make is in education, reskilling and upskilling. It is the best pathway to expanding opportunity, enhancing social mobility and accelerating future growth,” said Saadia Zahidi, Managing Director, World Economic Forum.

Enabling Education 4.0

Two years into its work the initiative will expand beyond adult reskilling and upskilling and integrate a focus on education for children and youth. These efforts will be taken forward by a new Education 4.0 Alliance, bringing together 20 leading education organizations at the Forum’s Annual Meeting 2022.

A new report from the project, Catalysing Education 4.0 Investing in the Future of Learning for a Human-Centric Recovery, focuses on preparing today’s generation of school-age children with better collaborative problem-solving that could add $2.54 trillion – over $3,000 per school-age child – from this one skill alone.

The report, developed with support from the LEGO Foundation and in consultation with leading education experts from the public, private and educational sectors, finds that investment in the skills of the future for primary and secondary school learners would create an additional $489 billion in Europe, $458 billion in South Asia, $333 billion in East Asia, $332 billion in Latin America, $266 billion in the Middle East, $235 billion in North America, $179 billion in sub-Saharan Africa, and $163 billion in Central Asia.

Meanwhile, China ($356 billion), the United States ($218 billion), Brazil ($143 billion), Mexico ($80 billion) and Italy ($72 billion) are the five countries standing to gain the most, while the benefits relative to the size of their economies today would be greatest in sub-Saharan Africa and Latin America.

To unlock this education transformation, the Education 4.0 initiative will focus on three key investment areas: new assessment mechanisms; adoption of new learning technologies; and empowerment of the teaching workforce.

Expanding the Accelerator network

Complementing the Skills Accelerators, the World Economic Forum’s Annual Meeting also featured the official launch of the first school-age focused Education 4.0 Accelerator, a national-level public-private collaboration platform for action. The Education Accelerators – complementing a network of successful Closing the Skills Gap Accelerators – aim to mainstream technology-enhanced learning experiences, implement new measurement mechanisms, empower educators and mobilize investment in the sector.

Bangladesh will be the first country to pioneer this new model in Asia. Dipu Moni, Minister of Education, Bangladesh, said: “Bangladesh is committed to ensuring high-quality education for all children and youth. We are delighted to partner with the World Economic Forum to launch the first Education Accelerator in South Asia and to be part of this global network to advance the Education 4.0 agenda.”

Continue Reading

Publications

Latest

Trending