Economic Expert Mohamed El-Erian Predicts Shift from Globalization to Fragmentation
Dr. Mohamed El-Erian, chief economist at Allianz, has called on nations to strategically reposition themselves to enhance resilience and adaptability in light of significant global changes, cautioning that the international economic framework is undergoing a fundamental transformation.
His remarks were made during the development finance conference "MOMENTUM 2025" in Riyadh, themed "Leading Development Transformation." El-Erian noted that traditional globalization has concluded, giving way to a new era he refers to as "fragmentation." He stated, "The world is not collapsing under its previous rules but is evolving at its highest levels, necessitating a reevaluation of economic policies."
El-Erian identified key factors driving this shift, particularly rapid technological advancements. He highlighted that artificial intelligence is a leading force behind current economic changes, alongside developments in technical sciences and quantum computing, which are expected to significantly influence the next decade.
Discussing the prevailing narratives, El-Erian pointed out that local economies must move away from traditional patterns, advocating for deregulation and investment facilitation in a landscape where trade and investments are often leveraged as tools of pressure. On a global scale, he noted a transition from absolute globalization to a fragmented world, which former British Prime Minister Gordon Brown termed "manageable globalization."
El-Erian emphasized that these rapid geopolitical and technological changes compel major nations, including Saudi Arabia, to prioritize economic diversification, enhance human capital, and invest in critical sectors to bolster resilience.
He concluded that success in this evolving landscape requires three essential components: resilience against shocks, recovery capabilities post-challenges, and innovative thinking to realign strategies with the new reality.
El-Erian remarked, "These attributes will significantly aid local markets and enable economies to adapt effectively in a swiftly changing world."
