One word can sum up the global economic outlook for 2017: uncertainty.
Cybersecurity, an open internet, potential protectionism, a collapse in confidence in institutions and the impact on other countries if Washington under President Donald Trump pursues a more isolationist policy are among the risks and challenges facing world economies this year, panelists said Friday at a conference organized by WorldCity, a Coral Gables media and trade data company.
“What makes us most anxious is the uncertainty,” said Donna Hrinak, president of Boeing Latin America and the Caribbean, during the conference at the Coral Gables Country Club.
In Latin America, signs point to a potential uptick in the economies in Brazil, Argentina and Mexico, said Eric Farnsworth, who heads the Washington Office of the Council of the Americas and the Americas Society. Any recovery from the commodity crash, even if “tepid,” is good, he said.
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But “what’s going on in Washington will help determine the international policy environment,” Farnsworth said. If Latin American economies are challenged as a result of actions in Washington, it could affect 2018 elections. Among countries where elections are scheduled are Costa Rica, Mexico, Brazil, Colombia, Venezuela and Paraguay.
Already Trump has signed an executive order calling for the construction of a wall on the border with Mexico, withdrawn the United States from the Trans-Pacific Partnership and said he wants to renegotiate the North American Free Trade Agreement.
But it’s still unclear how the president’s foreign policy will play out.
Uncertainty “generates a global paralysis. It’s a wait and see game,” said Magdalena Ramada, a senior economist at Towers Watson, a global risk management, insurance brokerage and advisory company. That waiting game, she said, could dominate most of 2017.
If the United States decides to play a lesser role in Latin America, “other countries are going to step into that void,” Farnsworth said. And the most likely candidate, he said, is China. While China may contribute money, investment and political support, it brings “different values and different ways of conducting business” than the United States, he said.
A digitally connected world cuts both ways, said Ramada. While information flow improves, “risks are more interconnected today.”