Global | Geopolitics and economic traps

Summary

Geopolitical uncertainty threatens to exacerbate the growth traps that plague many countries at different levels of development.

Key points

• Key points:
• This uncertainty is even more worrying due to the lack of clear indicators.
• Its impact may prove to be lasting, as it deepens growth traps at all economic stages, from the poverty trap to "Japanization" in developed countries.
• Only a few nations have overcome these traps thanks to natural resources, technology, or solid institutions, which have recently gone hand in hand with open trade strategies.
• Rising geopolitical tension threatens to dismantle these strategies that have enabled many countries to improve their economic situation since 1990.
• The World Bank's Business Ready survey could provide clearer metrics to mitigate geopolitical uncertainty across nations.

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