As the global economy undergoes significant change, countries are increasingly moving from interdependence to strategic autonomy, according to an expert.
“The familiar world of multilateralism, global trade, and institutional cooperation is breaking apart,” stated Samy Chaar, Chief Economist at Lombard Odier, in an interview with Khaleej Times. “We’re transitioning from depending on others for strategic resources to securing them independently.”
This shift, he explained, isn’t just due to recent political events like Trump-era tariffs but represents a broader realignment of global economic priorities. “It began before Trump, persisted under Biden, and is now picking up pace,” he remarked.
Strategic sectors gain prominence
Chaar highlighted that sectors once viewed as secondary are now crucial for national security and economic resilience. “Defense, energy, food, water, healthcare, and technology are now vital resources,” he noted. Europe, for example, is heavily investing in electrification, nuclear energy, and renewables and increasing defense spending as reliance on NATO’s security diminishes.
He pointed to BMW’s plan to establish a new factory in Hungary as a key reshoring example—bringing production closer to reduce dependency on global supply chains. “Testing the system reveals that without local capacity, dependency carries a high cost,” Chaar cautioned.
GCC’s strategic advantage
Locally, Chaar views the Gulf Cooperation Council (GCC) countries as well-placed for this transition. “The GCC has the financial means and surplus accounts to invest in autonomy,” he stated. While food security is a challenge, he believes the region can diversify suppliers and build strategic partnerships to mitigate risks.
“The oil sector is gaining momentum, and with the Fed’s recent rate cuts, credit conditions are improving,” he added. “This fosters a positive business and investment outlook in the region.”
Crypto and AI: Promise versus reality
Regarding emerging technologies, Chaar has a balanced perspective. While stablecoins—cryptocurrencies backed by assets—might disrupt traditional banking, he is cautious about their broader economic impact. “Crypto flows remain minimal. Central banks aren’t accumulating them, and they’re not yet mainstream in consumption or investment,” he noted.
AI, however, is seen as a demographic aid. “Nations with aging populations and shrinking workforces—such as Japan, South Korea, and Germany—are using AI not to replace jobs but to fill gaps where human workers are unavailable,” Chaar explained.
Gold’s rise and future prospects
Gold continues to thrive, mainly due to central bank purchases, especially from China. “Retail investors haven’t joined the rally yet, but if they do, it could further boost gold’s rise,” Chaar mentioned.
Outlook: Deceleration, not recession
Despite global challenges, Chaar is optimistic about the near-term economic outlook. “I foresee a slowdown, not a recession,” he stated. “Labor markets are stable, public spending is strong, and central banks are cutting rates. These factors should minimize recession risks.”
