The world economy has been through a lot in the recent past. Not only has it undergone a financial crisis, climatic change but also immigration pressures among many other challenges. It is only two years ago that the world was shaken by geopolitical changes that had unpredictable ripple effects. Today, the situation does not seem like it has gotten any better. For example, the vote for Brexit and the United States election are an indication that the world now prefers the protectionist system to cooperation. However, there are several challenges that different countries continue to underestimate even when their effects are so bad necessitating a need for cooperation among different nations; they include:
There has been a growth in income inequality. It is by human nature for people to compare themselves to their neighbors, particularly on wealth issues instead of just focusing on what they have. The global wealth in 2016 was at $166.5 trillion which was 5.3% higher than the year 2014. However, what is shocking is that the growth in the wealth did not reflect the distribution of income among the people. As the gap between the rich and the poor countries continue to widen, so is the income inequality within countries.
Advancement in technology has been a driver of change in jobs. The problem with modern technology is that many people are losing jobs which instead are done with less effort by the current equipment. For example, a decade ago the five biggest companies in the world employed 1.3 million people as compared to today that employs 720,000.
There has been a rise in protectionism as experienced in the issue of Brexit and United States election. The G20 countries have implemented a lot of protectionist measures like it has never been seen before with the United States at the forefront. Additionally, the rate of immigration has been on the rise causing border crisis as witnessed in Germany and other parts of Europe. As such, the question that we should be asking ourselves is,’ are there ways in which we can make the world economy? Well, at the moment there appears to be no way. However, by looking at our children and thinking about the world we want them to lead in the future, then collaboration and working together is the solution.