In 20 years time the world will have gone through a transition whereby it has adjusted to rapidly declining crude oil and natural gas production. Alternative energy will be dominant, but will not have sustained demand at today’s levels. Nuclear fusion will look closer, but will still be a future solution.

Agriculture will also have changed, and even in developed countries food will again take up a large proportion of household expenditure. Agricultural productivity will have been falling for at least ten years due mainly to the increasing price of fertilisers because the primary feedstock, natural gas, will have become a luxury. In many poorer countries famines will already have occurred as the real prices of staple commodity food products will have continued to rise. The conflict between food and fuel production for resources will continue, but the requirement for energy will have dominated the conflict.

Due to increasing shortages and prices of commodities, energy and industrial metals, and wholesale declines in consumer demand for its products, China will have collapsed. India will fare better because its institutions are more developed - Indian democracy has survived hardship before, and will do so again. Thailand, Malaysia and Indonesia will, despite problems of food production, have economies strengthened by their realignment as exporters of biofuels from first, second and third generation technologies. Singapore will profit from its key position in the region. The ‘emerging markets’ are already stalling, and their brief day in the sun will have become a memory.

The dominant source of global liquidity will be petrodollars, and sovereign wealth funds will have contributed significantly to the economic adjustments. Crude oil will of course still be flowing, with investments made on the basis of profitability, not any desire to fulfill current demand levels. It will be very profitable for companies and countries that run their affairs efficiently.

The survivors will be the countries where democratic processes, effective markets and the rule of law are maintained. They will be best equipped to adjust. Population and demand growth, declining exports and political unrest will have removed Saudi Arabia from a position of economic importance.

My vote goes for London and New York, with the important link being Dubai. Dubai will own the NYSE and LSE anyway.

Dubai, no doubt.

I was in Dubai in 1996 the place was practically a desert and now it is becoming the center of the world.

As someone who has traveled to most of the places talked about in the article thru work for a large management consulting firm I would have to say there are much too many variables in place for this to be determined. Right now it is obviously New York, but London has caught up quite a bit, there was an article last summer about how London’s financial district (canary wharf) has shown rapid development and expansion while Wall Street has shown declining growth and expansion in the number of companies.

I do not believe the financial hub will be in Asia anytime soon or even in 20 years. The US will still have significant clout in all business affairs that go on in the world along with traditionally low barriers to business. London is the same way, much like an extension to the US. Hong Kong is very attractive due to its extremely low barriers much like the US but Hong Kong is a very small place with few resources such as land space which detract from its attractiveness.

Wall Street also has its extreme prestige throughout the world that will be very hard to strip away regardless of the business landscape. In other words, “Wall Street is Wall Street” and that has always been the area where most of the world’s ambitious financial minds get/got their start and I dont see that changing anytime within 20 years.

I agree heavily with the previous poster that the most efficient markets will survive the best, those being Hong Kong, New York, and London.

I am not sure much will have changed in 20 years. I recall when all you ever read about was the so called “Asian Tiger” economies, by now they were suppose to have been masters of the universe!

I would guess that we will probably just have a series of major financial hubs as it becomes easier to work regions from a central point. (this already happens in another industries). London to cover Europe/Middle East, Hong Kong as the hub for Asia and New York will still be around I would imagine.

Greg Atkinson
http://www.shareswatch.com.au

I think New York will retain the crown as the financial capital of the world even though many Wall Street is bleeding. But come on, it is a part of the economic cycle, after every boom there is always slowdown. New York will be #1 because of its diversification, effective market policy and the rule of law.

Where is Todd Benjamin all the time? I am missing his comments!

To make it simple,

London
Dubai
Mumbai
Hong Kong

Those four cities will be the main financial centres. New York might still be up there in number 5 or 6 position.

London due to its very tight connections with over 80% of the Asian countries.
Dubai even though Oil might not be number one source for energy any more in 20 years, but the revenues over the next 20 years from Oil will keep Dubai at the heart of the financial world.
Mumbai simply due to India
Hong Kong will be challanged by Shanghai or other cities, but will remain on top.

This scenario will only take place if we do not have another major military conflict in the Middle East. Should there be a conflict in the Middle East all bets are off.

That is my take on your question Eunice.

I wonder if maybe there will be no clearly defined capital of finances. WIth all we have seen over the last couple of years, it seems free trade and globalization have redistributed the wealth and economic power over a wider area. One month Asia is the star, the other the middle-east. This, to me is a clear sign of the worldwide markets trying to sort themselves out. According to a study by Goldman-Sachs, if I am not mistaken, Russia, China, Brazil and India will have an important role to play in the next 20 years, along with Mexico. I honestly believe this may be the case.

it is gong to be india

I trust Mumbai (INDIA)…,

Mumbai, known as the Commercial Capital of India, is the economic hub of most of the financial and business activities of the country. The Island city contributes no less than 10% of all factory employment, 60% of customs duty collections, 40% of income tax collections, 40% of foreign trade and 20% of central excise tax collections of India. Moreover, it produces a huge amount, of Rupees 40 billion (US$ 9 billion), in corporate taxes!!

Mumbai’s banks process twice as many cheques as those in New Delhi. Some 14% of the national bank deposits are found in Mumbai. A staggering 80% of India’s mutual funds are registered in Mumbai, and almost all transactions involving financial institutions and over 90% of merchant banking transactions are structured in Mumbai. Its two stock exchanges account for 92% of India’s stock market turnover.

Its role in financial intermediation is unsurpassed. Timothy Adams, under-secretary for international affairs at the US Treasury, said recently: “(Mumbai has) truly talented people that have done a remarkable job. (There is) tremendous potential, and I have no doubt that if officials put their minds to it, we will see Mumbai as an important global financial centre.”

The dream of many of Mumbai’s financial professionals, to make their city into South Asia’s Manhattan or London, is not far-fetched.
That is now a government priority. Mumbai can become a global financial centre because there is, arguably, no city between Singapore and Frankfurt that can fulfill that role.

With that in mind, the city’s metropolitan development authority has earmarked land for an international financial and business centre complex, which includes the hi-tech National Stock Exchange, the diamond bourse, a convention centre, and many Indian and foreign banks. Skyscrapers are already sprouting up, to rival the skyline of Nariman Point in the south of the city.

The central government has set up a panel of experts to help achieve that. Chaired by the Oxford-based development expert, Percy Mistry, the panel is looking at incentives and bureaucratic procedures.

Indian companies like Tata Group, Godrej, Reliance, State Bank of India, etc, which form of part of Fortune Global 500 companies, are based in Mumbai only. Most of the foreign banks and financial institutions have set up offices in its expanse.

At present, Mumbai stands at 10th position amongst the biggest centers of commerce in the world!!

Japan, China, and The United Korea.

I personally believe that in 20 years time, the technological advancements and the interconnected of everyone will render the idea of a physical capital to be obsolete. I think it will be more which part of whatever passes for the internet will be where business gets done and where in the phsyical world anyone is becomes more and more irrelevant.

I would say Dubai or probably Singapore
The rise of China is still worrying for the West, who would prefer to conduct business with people who can’t push back too hard.

I personally believe The Iraq, U.S. Americans, South Africa and the Asian countries therefore, such as.

V London, you say you are a management consultant, though I am glad you are not mine. You are so blinkered. “Prestige” of Wall Street? Hello! Worldcom, Enron, excessive exec pay packages. I have worked in London and NY, and, little boy, London is NOT an “extension of the US”. A lot of the world’s best bankers that I work with here dont give a hoot about the US - they/we are focused east.

After spending years in China, Japan, and other Asian countries, I truly believe mainland China will be the financial hub of the future, while the economies of the US, Japan, and other developed countries will slump, due in part to the relocation of production and capital. However, I’d put this at about 40 years rather than 20, as China still has many internal corruption and inequalities to deal with before people can globally trust it as the financial capital of the world. I advise anyone with a history in finance or economics to visit mainland China, its development and rising capital is unlike anything you’ve ever seen.

It is the same as it isnow. New York and London will remain the
financial capital of the world. All the rest can vie for the third place,
wether it’s Hong Kong, Dubai, Singapore, Shanghai or Mumbai,
the fact ist the third placer will come from the Asian economies.

no question China, then having 20 Universities of the quality of Harvard, MIT and Stanford producing double the nr o fgraduates as the US and Europe does and all the accumulated surpluses - yeah no question - China

Singapore, Shanghai, and Dubai

In no particular order:

NYC
London
Dubai
Singapore
Hongkong
Shanghai
Tokyo

I know that list is long, but I believe globalization will continue, including in the markets.

I won’t be China unless the current government falls. Shanghai will be important for China as well as Hong Kong and maybe Singapore, but the West will not trust the world’s financial system to a self-appointed, answerable to no one Communist regime that bars free exchange of data and bars free speech.

Mumbai has a chance, but slim. More likely, there will be regional financial centers with no one the key focus. The US is in decline, but more due to the poor savings rate of the US and the twin deficits. Still, from a technological perspective, even with its declining education system, it is hard to beat the US for innovation, and thus the capital magnet that has over the years gravitated toward the likes of Silicon Valley.

Until Asia becomes a source of innovation, and maybe Nobel Prize winners, it’s draw as a hub is limited and more a fuinction of population size than anything else.

The way things are happening no doubt that USa and the European countries will have to get heavy loans from China.The problem with these countries is that they do not think to buy their own products but to buy cheap products manufactured in China.

I AM TRYING TO UNDERSTAND OIL IS DOWN BUT SO IS THE STOCK MARKET, YET 6MONTHS AGO OIL WENT UP AND THE MARKET WENT DOWN, WHY ISN’T THE MARKET GOING UP?

Dear Ms. Yoon,

As Toddy Bear is not long part of the CNN team I will write to you. I think you have raised an intereesting question in that the Middle East in General and Dubai in particular is doing all it can to become a major financial center. With a financial vacuum cleaner in the form of oil revenue that will be a powerful tool for some years to come there is a very good chance the Middle East will become very important.

I think however that in the early part of the 21st century the question is really moot. What will develop in the next decade or two is a new global financial structure based on two primary factors and a number of other less important ones/

The first is the relative position of the Dollar, the Euro, and Sterling as reserve currencies. Sterling has been under pressure and has not been the primary reserve currency in more than half a century. The Euro is a product of the European Union that is a political entity that is almost powerless and a European central bank that is even less effective. The value of the Euro, a fiat currency backed by a government without even a constitution is to say the least questionable. This indicates that the UK and Western Europe are unlikely to become major financial capital or even retain the current power of the City.

This brings us back to the United States whose currency is doing better than the total disaster of the past few years but this is saying little. The options of the government are limited in terms of debt service and the only viable solution seem to be to inflate their way out. The actions of both the Fed and the Treasury seem to indicate that someone actually has realized this but is trying to conceal the policy from the US voters and the world. So much for the long term future of New York.

At the same time the financial system is becoming a 24/7 operation using the Internet and the web as a replacement trading platform. The overwhelming strength of the Wester and particularly the US industrial and financial system is being eroded. What we will see develop is a global market place where everything is perpetually in play. There will be no more financial capitals. The sage of Omaha has demonstrated that it is not necessary to be headquartered in a financial capital. If Warren Buffet can do it, why not you and me?

Mike

I wish it could be Atlanta, GA but small minds in GA don’t allow it. If Grace is still placed with the US after November 4, 2008 domestically, we could keep NY as the financial capital over Dubai or London. However, US has given away most its financial capital to Communists Countries. The Global community may see that as an unfriendly financial relationship over time. This could result in a wild card location such as Mumbai. Oh! what a web we weave when we first try to …. Not everyone is blind to amount of greed that runs through our democratic and financial process in the US. And Yes! pure greed is bad for our economic standing in a Global economy.

If ever the west were to loose the economic clout, i am sure they will provoke a war in middle east the most secure and probably having the highest per capita consumption in the word and take economic control of the energy pipeline and commodities in other parts of the world.
As asian countries have never learned from history i am sure once more we will be colonized by west economicaly either directly or indirectly by war or by sanctions after all self preservation is the most important criteria of survival!!!

I hope it Mumbai. India is growing and so would its financial capital. I think will have a tough fight from the gulf cities and china.

Well Gentlemen and those who are not men,my opinion and experience about this prediction or any kind of future shock it might turn into is a little different and may be thoughtful.I think we cannot predict which city would be the next business capital and which country would be the financial superpower, it could be anyone having that kind of entirely business driven set of priciples allowing everyone to grow as per their wish, justified and bearable ambition which won’t be hurting the very essence of life and allow those people with the right business accumen to grow up for self as well as for the betterrment of the entire world community transcending the boundaries of race and religion.And further when this whole world came into existence the BIG BANG OF TIME,right people were set for the right jobs and we must adhere to that and not fight for the unjust so called rights and look forward to the solution where we can grow together in rightful manner and bearable circumstances for everyone. Therefore i would opinionate,”let the King remain the King and theArcher the King of all Kings”.And finally I’ll take some time to decide as to who would be the king because i do not make a wish in a hurry because my wishes turn into reality sooner or later.First let’s make this world safer and then have the slice of the pie without any kind of regret and learn how to respect each other without stabbing on their back.Because that’s the time when world starts looking beautiful all over again that’s what i learnt when i saw this movie “MEET JOE BLACK” years back and i thought of singing,’All come to look for America’, but then time changes everything without giving any notice beforehand.I learnt from ELVIS that there is perhaps an old say in TENNESSE,”Only fools rush in”.So first let’s have smart KINGS.

I know this is off subject, but i am doing a project for college and need 4 people to tell me what they think the “free market” is. Thanks for your help

If we in the West make use of renewable ennergy technology for more than 65% of our energy needs witin the next 15 years,the Sheiks and all other oilproducing countries will make a huge nose dive and in the long term won’t stand a change, they are too dependent on the oil income. High Import Tariff Walls( down with the WTO) around the EU will hurt China and India badly and cut them down to size. China cannot live economically without it’s exports to the West. The crash of the USDollar will also hurt the OPEC Countries who will scramble for the Euro instead.
The Financial Capital of the World for the next 20 years will be in Europe.

The market crisis is a result of too much too soon, the problem is really the adjustable interest rate the subprimer were involved , when your mortgage payment fluctuates every month , anyone is in for trouble, this people with low credibility were buying houses with this adjustable rate, what comes around goes around, and now we are seeing the results of such a bad program, one day the subprimers did not have any more money to pay the high interes to the point that they owned more for the house that the house was worth.
we need change, and this change needs to come to us in any color, at this point race is irrelevant, is the American people who are at stake here.CHANGE! new fresh start!.