Foreword by Governor György H. Matolcsy

Foreword by Governor György H. Matolcsy

“Asia’s emergence as the world’s geopolitical and economic center has lent global prestige to a new paradigm for achieving sustainable growth alongside social solidarity. With many other countries already studying the Asian playbook, the United States and Europe could benefit from doing the same.”

(Parag Khanna, founder of FutureMap, best-selling author of Connectography and The Future is Asian, 2019)

Over the past one or two decades, a changing world order and the emergence of Asia have become a common argument of geopolitical analysts, economists, politicians and decision-makers around the world. Today, the facts clearly show that this is not only a popular idea, but a reality unfolding before our eyes. While Asia had a share of about 27% in global real GDP in 1990 and the Western half of the globe (Americas and Europe combined) accounted for 68%, these ratios have changed considerably since then. As early as five years ago, in 2015, Asia already reached a share of 45% within global output, and the share of Europe and the Americas fell to 50%. Ever since, the East has been on the rise, which also became obvious amid the pandemic in 2020 when China was one of the few economies to record positive growth on an annual basis. Bloomberg Economics estimates that by 2035, China will have overtaken the United States to become the world’s largest economy, but according to the UK-based Centre for Economics and Business Research and the Japanese Nomura Holdings, there is a good reason to believe that this date will arrive earlier, in 2028 or even in 2026. Furthermore, by the middle of the century, fast-growing emerging countries, located mostly in Asia, will produce almost 60% of global output, based on Bloomberg’s calculations.

GDP, however, is far from being the only factor reflecting the rise of the East. Just to mention one more: technology. In the age of digitalization and the Fourth Industrial Revolution, the World Intellectual Property Organization (WIPO) has ranked Singapore, the Republic of Korea and China as the 8th, 10th and 14th most innovative countries respectively (Global Innovation Index 2020). This is an amazing result, which has been achieved by these nations in only a couple of decades through systematic efforts to build up local ecosystems for high-tech research and development. Although these developments underline the role of Asia, I believe there is an even larger community of common destiny which is set to achieve great success: Eurasia. The Eurasian supercontinent is the largest, most populous and best-connected continental area on Earth, and its economic, social and cultural linkages stretch back to ancient times, the age of the old Silk Road. While history has created separate notions for Europe and Asia, these two parts of the huge Eurasian landmass have never ceased to be intertwined. Today, in the face of modern-day challenges such as digitalization and the fight against climate change, the cooperation of Asia and Europe may be more important than ever. Eurasia is emerging as a new global power center, suggesting that the unipolar world order – represented by the Atlantic bloc – is giving way to a new age of multilateral cooperation. To reap the benefits of this historic process, Europe and Asia need to create even more effective channels for communication, information sharing and mutual understanding. In recognition of this, three years ago the Magyar Nemzeti Bank (MNB), the central bank of Hungary, launched its flagship event, the Budapest Eurasia Forum, in order to establish a new platform for Eurasian dialogue and cooperation. The conference is organised annually, and every year it strives to understand the most recent patterns in three megatrends shaping the future of Eurasia: the growing

significance of geopolitics, the technological revolution and the transformation of money. There is indeed one omnipresent concept framing all of our discussions: long-term sustainability. The global economy obviously needs a complete reboot in terms of achieving a zerocarbon and circular way of generating welfare. But sustainability is even more than that. We need sustainable solutions in all aspects to be high on the agenda of our Forum. That is, as regards geopolitics, we need a new balance between the East and West. As for technology, we need a new harmony between new solutions (like artificial intelligence) and our societies, health and well-being. Last but not least, with regard to finance and money, we need a sustainable, stable and efficient financial system. This thinking is well reflected in this new volume of studies, which the MNB decided to publish in order to collect and promote the most relevant thoughts of renowned experts regarding Eurasian cooperation. This volume is a unique initiative by a central bank in Europe – not only due to its topic, but also because it brings together several authors from China, Russia, the Republic of Korea, Singapore, as well as the United States, Norway and Hungary, inter alia. Thus, the volume is itself an excellent example of Eurasian cooperation. Its topics resonate well with 21st-century megatrends and examine geopolitics, multilateral cooperation, economy, finance, technology, infrastructure and education as connected parts of the “big picture”. I sincerely hope that this kind of thinking will become more and more widespread both in Asia and Europe, and I believe that this volume makes a major contribution in that regard. The MNB is grateful to all of the authors for sharing their valuable thoughts.

György H. Matolcsy Governor Magyar Nemzeti Bank