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How will Biden’s presidency affect the global economy?

And what stance will the new administration adopt on trade and foreign-policy?: Alexander Forbes chief economist, Isaah Mhlanga.

NOMPU SIZIBA: At around 19:00 South African time, US president-elect Joe Biden will be sworn in as the 46th President of the United States. There’s high anticipation around how his new administration will deal differently with the Coronavirus pandemic in the United States, which has suffered more than 400 000 Covid-19-related fatalities. How speedily will the largest economy in the world rejoin the Paris Climate Change Initiative, and what will the new administration’s foreign-policy stance be like? Well, these are burning questions as, for the past four years at least, President Trump’s America First stance has alienated much of the world, including former allies.

Well, to get his view on what the installation of Joe Biden as the 46th President of the United States means, I’m joined on the line by Isaah Mhlanga, the chief economist at Alexander Forbes. Thanks ever so much for joining us, Isaah, and a belated happy birthday to you. Depending on what spectacles you wear, and your general ideological leanings, President Donald Trump was a disaster for the United States and the world, or he was a breath of fresh air who did things differently from the usual establishment ways of doing things. He did some positive things, according to some, especially showing China that it can’t get away with taking countries for granted on the trade front. What’s your assessment of his tenure?

ISAAH MHLANGA: Thank you very much. Compliments for the new year and I hope it’s a healthy one. I think it’s quite difficult to take positives out of the policies that Trump has netted. If anything, in the economic space he has moved from raiding policy documents to just watching his preterm window [? 1:36], which produced a lot of volatility in markets; and that surely can’t be good.

But if you look in terms of how the world has engineered itself over the last 20 years, where it was based more on multilateralism, that has been reversed quite significantly, and that has been a negative for economic problems and, by extension, for people’s livelihoods in different countries. So we would expect a reversal of that, particularly as far as climate change is concerned. We understand Joe Biden is likely to sign about 15 executive orders in his first couple of days. to reverse some of those decisions that were made by Donald Trump – which include going back to the Paris climate accord,  but also rejoining Nato and re-looking at the Transtlantic [Free] Trade Agreement.

Those are a few of the Trump policies that have been quite damaging as far as trade in the global economy is concerned. But we also expect a lot more from Biden from an economic point of view. A stimulus package of about $1.9 trillion that is going to focus on infrastructure and green-energy spending. That is going to be good for the US economy, it’s going to be good for commodities. It’s also going to be good for emerging markets like South Africa that depend on commodities. That should be good generally for improvement or the recovery, especially given the pandemic that we have.

NOMPU SIZIBA: This will relate slightly to some of the things that you’ve just said, but of course the US didn’t really seem to have an Africa policy. President Trump never really set foot on the continent to show willing. We know that Biden has a relationship, certainly, with South Africa. And of course we know that he was a fierce agitator against apartheid. Can we expect some sort of positive attention from his administration, do you think?

ISAAH MHLANGA: Absolutely. If we just look from his appointment only, it’s the most diverse in terms of gender and in terms of race that we have seen in US history, which shows how he is going to deal with policies as far as the relationship with other countries is likely to be different. When he was elected US president, the first president that he called was President Ramaphosa, who is the head of the African Union Heads of States currently – which shows a change in sentiment which is likely to lead to better Africa relations going forward. And this has led to what you just mentioned in terms of foreign relationships with South Africa for a very long time – since the 1970s and 1980s. So this just follows through in that particular direction, where we expect relations to be much better. But, in any case, South Africa is the US’s biggest trading partner in the whole continent, so we do really occupy a special space from an African point of view, which we believe is going to improve further going forward.

NOMPU SIZIBA: The World Trade Centre, the World Health Organisation head,  Tedros Ghebreyesus, has warned that the developed countries seem so focused on themselves, in terms of getting the Coronavirus vaccine, that less-developed nations may well miss out. And he’s saying that a lot of moral leadership will be needed in this regard. Do you see Joe Biden as somebody who – of course while he’s faced with a massive problem in the United States right now – will have that moral leadership where he’s able to look beyond the shores of the United States and ensure that places like Africa also get equitable access to the Coronavirus vaccine?

ISAAH MHLANGA: It’s more likely than not. The US is also part of the Covax facility, which primarily is geared to help poor countries to access vaccines, particularly those that are in Africa. So I absolutely agree with your sentiment – he is likely to say there should be equitable access. And as the World Health Organisation says, until everybody is vaccinated, no one is safe. That is going to be a standard that he is likely to adopt. And that should be good. In terms of distribution it’s going to be far more difficult, given the conditions of some of the vaccines that require temperatures as low as ‑70 degrees Celsius. Infrastructure is going to be problematic, but those are going to be issues that each country has to solve.

NOMPU SIZIBA: Yes, indeed. I just want to go back to the trade issue. You raised a number of issues earlier, and it does seem like you say, that to Mr Biden is going to be open to creating improved bilateral relations with blocs and countries going forward. But it doesn’t look as though his approach to China is going to be that much different from his predecessor’s. Your thoughts there?

ISAAH MHLANGA: As far as China is concerned, the trade wars will continue. It is really not a trade war; it is a technology war, in  which trade is being used as the weapon [7:17] …….that technology works. So in that respect, it’s unlikely to reduce. But there is going to be a difference in the approach, in that it’s likely to take a multilateral approach rather than the combative nature that we have seen with Donald Trump. So it’s going to cause less volatility. Nonetheless it’s not going to be reduced in terms of the aggression, but it’s going to be in a more diplomatic manner

NOMPU SIZIBA: Prior to the Covid crisis, the world prided itself on being a global village, with things like freedom of movement encouraged. And of course now recently we’ve seen that Brexit is done and dusted, for example. And this is within regulatory limits, of course, proper visas and so forth. But what’s your sense around US policy on immigration going forward?

ISAAH MHLANGA: It’s likely to also improve. It’s one of those executive orders that he is expected to sign, that is going to return the US ……[8:19] that sends space where it was before Donald Trump; at least more acceptable to immigrants than under Donald Trump. But also this is embodied in the picking of Kamala Harris as the vice-president of the US, a daughter of immigrants that came into the US becoming the vice-president of the US. It’s quite symbolic. And also it could be used as an expectation of what’s to come as far as the immigration policy is concerned.

NOMPU SIZIBA: Isaah, thank you so much for your time, as always. Isaah Mhlanga is the chief economist at Alexander Forbes.

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COMMENTS   18

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God help America, they are going to need it.

Who cares about America? they only care about themselves

The rest of the world was punished economically for 4 years while Trump was president.

Our economy was also affected with Mr. Trump as president.

So anything in place of Mr. Trump will be better for South Africa.

That’s what you think. By the way, “Africa is a Sh**hole”.

I don’t think anyone would be wise to pay much heed to, or assign even a modicum of intelligence to someone who thinks our investments are completely decoupled from the state of the US economy….

Specifically, anyone who considers the raising of US taxes, the massive outsourcing of industries and US jobs to China, the welcoming of thousands/millions of illegal undocumented “immigrants”, the destruction of the US Oil industry, destruction of the US Steel industry, the implementation of socialist medicine and other failed socialist policies, the weakening of US armed forces, the implementation of anti-US trade policies, joining climate accords which are favorable to US rivals, the kowtowing to China, the welcoming of mu$lims from rabidly US-hating countries, the instigation of regional wars due to US weakness and diplomatic fumbling…

This will be Biden’s legacy.

I don’t understand why SA needs help or beg for help. Can we not help ourselves rather??

You are I’ll informed. Trump tried to clean up and organized the USA government. That being said, Biden will do nothing for Africa, as he adopts Obama’s policies.

On vaccines, how many people died of vaccines so far. (Latest example ~30 in Norway)

The dollar will crash, but it was already enroute to the crash. They just keep printing money. Remember the ZM$ 100,000,000,000,000 note??????????????????????????????????????

Sensei must enlighten us on this subject. A lot of people have been waiting and predicting this for a long time. I remember a mw article which stated that in September 2019 the fed printed more money than in its 200 year history combined – with no plan of how and when to extract this fiat money. This is not just sustainable it’s madness.

This is how the democrats stole the elections. They are an illegitimate government.

It looks like MW don’t take web addresses but Google stopworldcontrol.com/italy/

@BJRB – where is the proof? Post some links to one of the 40 plus court cases that went in Trumps favour..go on,seeing you are soo clever. And while you at it, change your tin foil hat!!

Pretty funny watching all the Saffer Trumpties froth at the mouth and spew conspiracy theories. The local Q Anonsense chapter get together must smell of as mixture of mothballs, brandy and formaldahyde..ha ha!!

President elect ‘Bin Liden’…?

@JoeBangles: The only comment that is frothing at the mouth is yours, pillock.

Ja right, Donny and his Retrumplicans couldn’t prove this and still there are actually people that believe their lies.

I am not a Trump or Biden fan, but wow this interview smelt of wokeness.

Hillbilly Bo Jangles with his foul mouth is back. His comments are worse than a Trump Twitter post.

Ye Chris Goffel, better a foul mouth than a sh1te filled head. And its refreshing to see a Trumptard admit that Trumpski’s twitter posts are foul..bless your heart!

Markets and the economy do better in a stable certain environment.

End of comments.

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