원문 보기
Dr. Mohamed El- Erian, Chief Economic Advisor at Allianz, it is a great pleasure to see you here at Economy Middle East. Thank you for inviting me. Earlier in the session, you mentioned the dominance of the dollar and what the future may hold for us . What are the key signs that indicate real structural decline, and what will it mean for economies tied to the dollar if its dominance disappears?
So, the good news for the dollar is that there is currently no other currency that can replace it at the center of the global economy. The less good news for the dollar is that people are gradually finding ways to diversify away from it. We see this in the amount of gold being added to central bank reserves.
Gold is now the second most important asset in reserves. And it could soon surpass the dollar if these trends continue. We see this in the way foreign investors invest in the American stock market. They are willing to work with American companies, but are trying to hedge currency risks against the dollar.
Why is this happening? For three reasons. The first is related to economic conditions in the United States. The fiscal deficit is high, which means that a lot of dollar bonds will be issued. The debt is large , which means the need to refinance many bonds at higher interest rates. The second reason for this phenomenon is related to signals from the US regarding possible changes in approaches to debt management.
And the third reason is geopolitical. This is due to the desire of countries to diversify for geopolitical reasons. So, this is a process that will continue. It is important that the US can cope with the challenges of its own economy. As for what this means for countries pegged to the dollar: there is currently no better currency to peg to.
So this does not mean that they should change their currency system, as the dollar remains the dominant currency. It's simply an understanding that the role of the dollar in the global economy is slowly—and I want to emphasize, very slowly—becoming less important. You mentioned gold, the price of which has been rising rapidly over the last few years, and it has had a remarkable rally, if I may say so, over the last year.
What role do you think it should play in a diversified portfolio? People realize that when it comes to " safe havens," there aren't many that can be relied upon. They also realize that gold would benefit from wider acceptance. We are seeing more and more central banks buying gold for their reserves.
We see institutional investors increasing the proportion of gold in their model portfolios. So, both for security reasons and for growth potential due to increased demand for the asset, there is a lot of interest in it. And this explains why gold rose when the dollar was strong and when the dollar was weak.
Gold rose both during the rise of stocks and during their fall. Gold rose when there was geopolitical tension and rose when that tension subsided. This is what remains unchanged. The mistake people make is that they assume that an uptrend is not accompanied by volatility. But by definition, when something goes up 60%, it attracts a lot of speculators.
This means that at a certain point the desire to lock in a profit becomes very high. So gold will continue its upward movement, but it will be volatile, given how much prices have already risen . You often emphasize the importance of resilience and optionality in portfolios. What could be practical steps for investors to build a resilient portfolio amid global uncertainty?
So, the first thing is the way of thinking. It is an understanding that we live in a world that is currently undergoing restructuring. And as the world changes, it becomes more prone to surprises. Therefore, it is very important to make sure that your investment method can withstand volatility. After all, the biggest investment mistake is when people sell assets when prices temporarily fall.
So it's very important for your mindset to be prepared for volatility. The second is limiting the risk of defaults. Time forgives most investment mistakes. But he does not forgive default. And the third element is to be open to new things. If I had told you three years ago that gold should be in a model portfolio, you would have said, "But very few institutional investors have it." But look at today— everything has changed.
So it's very important to be unbiased, to realize that the world is changing, and to try to understand exactly how. And finally, I will give some figures from the IMF. They reported economic resilience in the MENAP region, where GDP growth is expected to reach 3.2% this year and 3.7% in 2026. How sustainable do you think this growth is, again given global instability?
So, I, but more importantly, many investors, particularly foreign ones, believe that it is sustainable. Because they believe that parts of the Middle East and North Africa offer the ideal conditions needed to navigate this world. So, what is this condition? You mentioned two of them. One of them is resilience.
This world has a lot of financial wealth concentrated, which allows it to absorb changes, compared to, for example, the developed world, which has many budgetary problems. So, financial and human resilience is very important, and part of the Middle East has it. The second part is flexibility. Now, in many countries, there are leaders who understand that they can prepare for the world of tomorrow.
We are seeing huge investments in artificial intelligence. We are seeing huge investments in supply chains. And it gives the region the flexibility to navigate a more uncertain world that is prone to greater upheaval than in the past. And the final element necessary for flexibility and resilience is choice variability .
Again, this is a part of the world that, due to its political importance, should not have to choose between China and the United States. She can interact with both. Saudi Arabia, UAE have characteristics that allow them to adapt. However, a mistake that people often make is that they assume that what is true for a group of countries is true for the entire region.
Unfortunately, parts of the region are generally not in a position to benefit from the growth that would benefit the most successful countries. Thank you for joining us, and thank you for your thoughts . Thank you for inviting me.
Comments 0