Page 29 - Issue 70

Vol 1 - issue 70
been struggling to attract factories for
decades for due to their unskilled labor,
instability, and bureaucracy.
These countries will face higher
borrowing costs, thanks to higher risk
premium, and higher default
probability. The world overall is
becoming more risker and investors will
ask for higher returns. Additionally,
these countries will face lower
American demand and global economy
growth, driving exports down. They
Name- Major-Year
might also face a flood of goods from
China that would have went to USA,
thus a surge in import. These countries
are very vulnerable to China as it is
their largest trading a partner and one
of the main sources of finance and
investing, especially with Trump cutting
aid off. The ultimate effect is larger
trade deficits lower economic growth,
thus higher default probability.
Source: The Economist
30
ELITE
They will also hurt from a the free fall
of the, presumably, rule-based order and
multilateral institutions in a critical time
for climate change and geopolitical
conflicts. Both of which will be more
intense, thanks to Mr. Trump’s policies.
These countries are already in large risk
of natural crisis, floods, and droughts.
And Mr. Trump has showed little interest
and more of disdain to climate change
issues. Soon after taking office, he issued
an executive order to pull the United
States out—once again—from the Paris
Agreement, the 2015 global accord aimed
at combating climate change and
supported by nearly every nation.
He also likes to deal with conflicts with
th
a 19 century imperial fashion. He talks
publicly of forcefully migrating the people
of Gaza and turning the strip into a resort
and publicly insult Ukraine’s president
for rejecting a deal that leaves admits the
status quo in east-Ukraine. Most
surprisingly was his claim that Suez and
Panama canal would not have existed if
not for the USA and that military ships of
the US should not pay fees. Many of his
talk is just lip service, but the man is only
shackled by US institutions, which are
under threat, and his team of advisors,
which might be forced to please him to
keep their positions.
With tariffs or not, the world as we
have known for the last three decades is
gone. The winner is yet to be determined,
st
but the 1 loser is for sure emerging
countries, except for those with plans and
strong inclusive institutions that foster
growth and social stability