Alfredo Bejar, FixedIncome Director – Credicorp Capital Peru
Since 1998 crisis, world population and hence country leaders have turned skeptical of the economic model with open borders for visitors and workforce, free trade of product and services, and capital flow. Using statistics from the WTO (World Trade Organization), the dollar amount of World Trade is flat for the past 8 years at 16 000 Billion, whereas population has grown roughly 10% from 6.7 to 7.4 billion.
Recently, Brexit and Trump election are samples of what developed countries are leaning to: Fewer jobs to immigrants along with stronger borders control, increased tariffs for imported goods and services (renegotiation of trade treaties), and capital control for domestic and overseas investment. History tells that periods of de-globalization are long; the Sociology department of NYU published in 2013 an article “Sociology project USA” in which indicates that the last one was between 1914 and 1970, right after WW1.
Governments and industries will have a tendency to “go local”, choosing macro policies and corporate strategies respectively, some of which the world discarded more than 40 years ago. It is our task to keep on checking history in order to take advantage of the opportunities of this new “old” market conditions.