SHARJAH, 13th September, 2023 (WAM) — Inflation has emerged as a significant concern in recent years, and the 12th edition of the International Government Communication Forum (IGCF 2023), organised by the Sharjah Government Media Bureau (SGMB) under the theme “Today’s Resources.. Tomorrow’s Wealth”, held an expert-led dialogue on ways in which it impacts individuals, investors, corporations, and governments worldwide, and the role government communication plays in mitigating its effects.
Titled 'Economic Challenges: The Elephant in the Room,' the key discussion was led by distinguished experts in the field, namely, David Daouki Li, Professor of Economics at China’s Tsinghua University; Dr. Raja Al Marzouqi, GCC Chief Negotiator – FTA Negotiation, KSA; and Prof. Dr. Fan Gang, Professor of Economics at Peking University and President of China Development Institute. The session was moderated by Saudi TV presenter Abdullah Al Mudaifer.
The experts-led panel also discussed how globalisation, which has contributed to serving the economies of countries and quadrupled the global per capita income, faces the growing threat of protectionism as a result of declining growth and growing indicators of recession and inflation due to global geopolitical events and trade competition between countries.
Inflation should be seen as an opportunity, rather than a crisis
Prof. Dr. Fan emphasised the global significance of inflation, pointing out, “Inflation is caused by many factors, including consumption rates. It affects everyone and requires effective communication between governments and their citizens.”
Dr. Al Marzouqi highlighted the importance of balancing government actions and societal expectations during inflation, noting, “An imbalance between government actions and society's rational expectations can harm the credibility of the government”.
Prof David Daouki Li shed light on the differing experiences of China and the rest of the world, particularly the country’s experience of deflation while the rest of the world struggled with inflation, stating, "Government communication is key in managing inflation. Governments can mitigate inflation by providing support to affected households and families and improving international trade relations”.
Fan elaborated on China's unique perspective, emphasising the importance of focusing on the supply side to combat inflation. "Increasing supply and reducing production costs keep inflation low," he stated.
Importance of reforms and cross-region trade
The panel also discussed whether inflation should be seen as an opportunity rather than a crisis, with Prof. Dr. Fan suggesting that inflation could prompt countries to diversify their currencies and improve international relations.
Highlighting the impact of inflation on global markets, Dr. Raja Al Marzouqi stressed the importance of multilateralism. “Coordination between organisations and countries can help mitigate the effects of economic crises,” he noted.
Prof Li said: “The policies pursued by several governments, primarily led by the United States, during the pandemic crisis, which involved issuing bonds equivalent to a substantial portion of an individual's annual income, has led to a rise in inflation rates, contrary to the intended goals.”
He added that addressing inflation requires long-term plans developed by governments to raise individuals’ incomes, stimulate the economy, boost production and exports, thus reducing inflation levels.
Li welcomed increased cross-border trade and collaboration between countries, emphasising the benefits of globalisation for all nations.
“In the global economy, during periods of inflation, governments should help companies to increase production, look at better training of service sectors, improve international relations with other countries and diversify away from the US dollar. These are all macro actions that end up influencing inflation rates,” Fan said.
The economists also welcome increasing trade relations between emerging economies and global partnerships, pointing out that new cross-region trade is good for everyone outside the partner countries as well.
Inflation requires open communication between governments and citizens
The panel members came together in concluding that a major economic challenge such as inflation requires open, honest, and informed communication between governments and their citizens.
They noted that inflation, as a monetary issue, should be solved with monetary policies and not be connected to a country’s politics or parties. “We are one world, we should come together and solve our economic problems together,” said Li.
The discussion at IGCF served as a vital step toward acknowledging and tackling these challenges head-on, underlining the Forum’s commitment to fostering dialogue and understanding among governments, experts, and the public to address pressing global issues