Davos, February 2 (MIA) - The World Economic Forum has published the report entitled 'The Future of the Global Financial System' devoted to the current global economic downturn and its impact on the global economy. The report indicates four development scenarios factually explaining the current crisis by completion of the absorption of a former socialistic camp into the global economy started in 1989.
"After more than two decades of exceptional growth, financial institutions are adapting to a new environment of tighter credit and slower economic growth, increased government intervention and a threat to the previous pace of globalisation," the report said.
The Fund specialists think that the financial system development in 2008-2020 can go under one of the four scenarios.
The first scenario entitled 'Financial Regionalism'. The economy of developed countries (the US, Europe) keeps reducing. GDP growth does not exceed 1.2% a year. At the same time emerging countries keep accumulating growth rates. Their GDP grows by 9% a year. To protect themselves from developed countries’ impact and ideas emerging countries are breaking the ties with them forming an own block. The US become isolated. Their economic connection with the world consists only of tourism and purchase of energy resources. The energy security becomes the most important issue. Dollar and euro are not the only reserve currencies anymore. The economic center moves to the East, China takes the leading positions in Asia. Thus, the world is divided into three powers: the Democratic Trade Alliance, driven US, European Union and the Eastern International Economic Community led by China.
According to the second scenario ('Re-engineered Western Centrism'), emerging economies will bear the largest losses and both economic and moral leadership still will belong to western countries. The world GDP growth will make 3.6% with 6% falling to emerging countries and 3.1% - to developed countries. A new national regulating body will be created. Nevertheless, during the reforms developing countries’ interests will not be taken into consideration as required. As a result, emerging markets will be marginalized. Deliveries of innovational goods and services from the US and Europe grow. This scenario stipulates appearance of a new downturn.
The third scenario 'Fragmented Protectionism' is the most pessimistic one. The world is all in conflicts. All of the countries are facing recession, they isolate each other following only own interests, asserting claims and leading the policy of protectionism and populism. The conflicts based on the lack of energy resources are strengthened by terrorism and natural cataclysms. The world GDP reduces to 2.3%. Strengthening the control on capital and human resources adds more negative. The EU fails by 2014 because of the contradictions between members. The banks are nationalized; the trust in world economy disappears.
According to 'Rebalanced Multilateralism' scenario, at first the economy falls into a deep stagnation. The world GDP declines to 2.5%. As the US are starting to face new downturns and developing countries sink in their unsolved problems, the world understands that the cooperation is an only chance to get out of the pit. Significance of the worldwide management and cooperated solution of problems keeps growing. Stage-by-stage the world observes GDP growing up to 3.6%, the major role belongs to emerging countries. The US and EU keep fighting against deflation and their GDP grows slower (1.8%). Meanwhile, economy becomes integrated, but Brazil, Russia, India and China strengthen their influence in the world. New, common risk management principles are created.