Pandemic changes wealth distribution
The global economy has been disrupted by the COVID-19 pandemic. However, fractures in the old globalised order has long affected the global economy. These developments will cause changes in wealth distribution and create investment opportunities.
Fractures in the old globalised order
The old globalised order is fracturing, as a result of geopolitical tensions and disruptions caused by the COVID-19 pandemic. According to the Financial Times, the United Kingdom will soon leave the European Union. A volatile United States president is snubbing allies and going it alone in the Middle East.
Vladimir Putin is changing the Russian constitution and meddling in Libya and sub-Saharan Africa. Trade tensions continue, threatening open borders and globalised value chains.
As the coronavirus pandemic spreads across Europe and the United States, a global scramble for protective equipment, such as masks and gloves, is underway. In France, they are calling it the “guerre des masques” – the war of the masks. According to a CNN report, some French officials have even alleged that their consignments from China have been hijacked by Americans. The presidents of two regions in France have claimed that American customers – without specifying who – have tried to pay Chinese suppliers three or four times the agreed price to get critical supplies diverted. In a separate occasion, protective medical equipment made by US manufacturer 3M and bound for Germany was allegedly intercepted in Thailand and diverted to the US, leading a senior German official to accuse Washington of “modern piracy”, according to the Financial Times.
Changes to the global economy
In his recent annual Labour Day address, Singapore’s Prime Minister Lee Hsien Loong forewarned of changes that the coronavirus will bring to the global economy and how this might affect Singapore.
The movement of goods and people will be less free. Countries will strive to rely less on imports for food and essential items like medicines and face masks. Significant structural changes to Singapore’s economy are likely, and some jobs will simply disappear. Workers in such industries will have to reskill themselves and take up jobs in new sectors.
With people having already adjusted during Singapore’s circuit breaker, learning to telecommute, work with others virtually, and getting used to online learning, there will be opportunities in these new ways of doing things. Industries that are thriving include medical services, biotech, food production and delivery, and information technology. Many firms in these industries are seeing stronger demand and hiring more people.
According to the World Economic Forum System Initiative on Shaping the Future of Digital Economy and Society, the unprecedented disruption by COVID-19 is accelerating the urgency for agility, adaptability, and transformation. Industry structures and business models are being disrupted, and the digitalisation of the economy is being rapidly accelerated. An estimated 70% of new value created in the economy over the next decade will be based on digitally enabled platform business models. However, 47% of the world’s population remain unconnected to the internet.
Changes in wealth distribution
The spread of information technology and global interconnectedness has great potential to accelerate human progress, to bridge the digital divide, and to develop knowledge societies, as does scientific and technological innovation across areas as diverse as medicine and energy.
Access to education has greatly increased for both boys and girls. Within the past generation, hundreds of millions of people have emerged from extreme poverty, and the acceleration of digitisation will enable more people to do so.
With emerging opportunities for wealth creation, new financial investment trends that are safe, easy to adopt, mutually beneficial, and with long-term growth will present themselves. Changes in the old globalised order, global economy, and wealth distribution will present a golden opportunity for investors to build wealth faster than in the past, if there are good platforms.
Aplex VA, together with its pool of investor funds, is able to use its resources to grow the wealth of its investors. Emerging bargains, as a result of depressed government bonds, credit, stocks, and commodities, are presenting investment opportunities for investors. This is the time when there are plentiful investment opportunities for investors to invest and grow their wealth. We track developments in global financial markets to ensure we can achieve good financial returns on our clients’ investments.