The recent, unexpected political happenings in the West have, no doubt, created a dire condition of uncertainty in the emerging economies in Africa, Asia, and South America. Concerned leaders on these continents are apprehensive of what may come after the turbulent year 2016 that had brought about Brexit, rise of far-right politicians in some European countries, increased terrorism in North and some parts of West Africa and the biggest upset of them all--the election of Mr. Donald Trump as the 45th President of the United States!
Economic uncertainties
While it is too early to speculate the kind of economic policies that will emanate from the new American administration, post-Brexit Britain and other nations that are turning nationalistic in their worldviews, one thing is certain, that the year 2017 will witness an unprecedented level of inward-looking, nationalism, and the resurgence of trade barriers.
Britain, if it goes the way of "hard-Brexit" in March, as it doesn't seem to have any other options right now, will be shutting itself out of Europe's trillion-dollar markets. If the new American administration continues to isolate Mexico and attack China, a free-for-all "trade war" will surely ensue. And as some European countries are embracing anti-immigration sentiment, this may irk governments in the emerging economies and force them to mount trade blockades for all European goods.
As a matter of fact, 2017 may turn out to be an unpredictable year that could be full of diplomatic and trade missteps. But the most important thing is that the emerging economies must find a way to survive the ordeal.
Strategies for staying afloat
There is no magic wand for dealing with the uncertainties brewing in the year 2017 than for the governments in emerging economies to design strategies for staying afloat, both economically and politically.
Here are some useful processes:
- Every country that has its foreign reserve denominated in Euro, Pound, Dollar, or Yuan should move to a less risky currency, because it is clear that the four previously mentioned currencies are at risk in 2017.
- Realignment of diplomatic relationships--The Philippines is already leading the way in this strategy by gravitating towards China and Russia
- Trade agreements and treaties should be based on give-and-take philosophy
- Independent international organizations like UN, WHO, ILO, and the others should be strengthened so as to wade off excesses from powerful nations
