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A Few Words from our Chairman

Hiroshi NAKASO

Daiwa Institute of Research
Chairman of the Institute

Hiroshi NAKASO

The 2020 world economy begun with geological risk increasing around Iran, and now in the guise of the global spread of COVID-19, it is being exposed to a new unforeseen threat.
The unusual situation of even masks and toilet paper disappearing from supermarket shelves brings back memories of the 1973 oil shock. On top of this, we are facing many other uncertainties, such as trade friction between the U.S. and China, and Brexit.
However, looking back over the years, world-shaking uncertainty has been present. Geopolitically, the 1990 Iraq invasion of Kuwait and subsequent Gulf War, and economically the financial crisis in Japan in the 1990s, and Global Financial Crisis that occurred ten years later. The examples are too numerous to count. In other words, uncertainty is not something that has dramatically increased recently.

That said, there has been a drastic change in the nature of risk. One example of this is the economic interdependence of nations and the progress that has been made in the economic integration of markets. If one part of the supply chains that weave their way across borders are cut off, then there is an immediate effect on global production.
The tourism industry transformed into a growth industry with the free coming and going of people has shown its fragility with the instant contraction that developed as a result of the uncertainty caused by COVID-19. In financial markets where vast amounts of capital traverse national borders, instability in one part instantaneously shakes stock and bond markets.

Another form is the issues that relate to the existence of humanity, such as climate change. Here, a new, different type of problem is occurring. It is predicted that this will not only bring about environmental threats such as rising sea levels and abnormal weather, but also various new economic and financial challenges including financial degradation of financial institutions caused by the physical damage of natural disasters, uncertainty in financial systems, and the change in industrial structure in the transition period from fossil fuels to renewable energy.

Humanity must concentrate its wisdom and overcome the various problems that occur with a change in the type of risk as listed above. As a think tank, this is where Daiwa Institute of Research can contribute. Primarily, we have the capability to perceive the long-term future based on information compiled by experienced economists. Secondly, we can carry out detailed analysis using abundant data that even takes into account local economies. Thirdly, we are strengthening our coordination with influential foreign think tanks to expand our international outlook.

While making use of these strengths, we will strive to produce results that lead to policies that carve out the future in an age of uncertainty.

Activities of Hiroshi Nakaso, Chairman of the Institute