The quick growth of developing economies has increased demand and purchasing power in these countries, which are the main reason for the dramatic price rise in the energy and commodity market over the past few years. The forecasts predicting that the accelerated growth of the economies of China and India will persist also foresee a continuing rise in the demand for oil and commodities in the coming years, and subsequently, a continuing rise in prices, despite the slowdown in gross world product.
Establishing China and India's position as key figures in the global economy over the next few years creates many opportunities and risks for other nations in a global environment. Decision- and policy-makers all over the world must determine the best ways to respond to trends and shifts in a global economy, in order to guarantee the long-term financial growth and competitive abilities of their own national economies.
In this paper we survey three major global processes today:
- The financial crisis in the United States: Is the US facing a "lost decade"?
- The oil and commodity crisis: causes, ramifications and forecasts.
- Shifts in the global economy's balance of power: the rise of China and India – the fastest growing economies.
The goal of this document is to provide background information and financial data about the major global processes. We hope that it contributes to the discourse on globalization and on trends in the global economy, and assists decision-makers in redefining Israel's role in a new global reality. One could take advantage of ongoing positive trends in the global economy in order to promote of economic reforms and other ambitious plans, while still taking short-term macro-economic risks into account. An informed analysis of global trends and the promotion of Israel's trade relations, also with the two fastest growing economies, are critical for the advancement of Israel's economic growth and for establishing the long-term status of Israel's market as a leading economy in a shifting global arena.