2022 was a turbulent year for the world. While some countries eased pandemic restrictions, others grappled with upheavals in political leadership, energy shortages, and the high costs of living. The U.N. noted that the world is “lurching” from crisis to crisis—and that concerted action must be taken globally.
Here’s how the world is resolving to tackle these challenges in the new year:
1. Fight against a looming global recession
2023 is shaping up to be the third-worst year for global growth this century, right behind the pandemic in 2020 and the financial crisis of 2009, according to the World Bank, which noted that the three largest economies—the U.S., China, and Europe—are “slowing sharply” while inflation is running at decade-high levels. The IMF has warned that “the worst is yet to come.” To deal with the sharp decline, experts say that world leaders will have to tighten monetary and fiscal policies to control inflation.
The number of countries that will tighten fiscal policies is expected to reach its highest level since the early 1990s. As this happens, the World Bank advises central banks to deal with the spillover effects by building on their foreign-exchange reserves. “Policymakers in emerging markets and developing economies need to stand ready to manage the potential spillovers from globally synchronous tightening of policies,” said Ayhan Kose, the World Bank’s Acting Vice President. They will also need to take strong steps to help increase labor-force participation, and coordinate with their neighbors to increase food and energy supply to help fight against inflation.
There’s good news, still: At the back of the pandemic, there’s also a dogged sense of optimism within the financial sector. In a survey conducted by KPMG with global CEOs, 58% of business leaders said they expect the impending recession to be “mild and short:” “Executives are emerging more confident in their companies’ resilience and hopefully the markets will follow suit, mitigating some of the greater uncertainties we’ve all felt,” said Bill Thomas, the global Chairman and CEO of KPMG.
Read More: Volodymyr Zelensky Is TIME’s 2022 Person of the Year
2. Prevent Russian authoritarianism
The impact of Russia’s invasion of Ukraine has rippled through neighboring countries at a rapid pace—but it has also shown how the West can coordinate effectively to isolate authoritarian regimes. The E.U. and the U.S. slapped a raft of sanctions on Russia by freezing assets, restricting sales and travel, and curtailing access to foreign capital and financial markets. Global corporations soon followed suit.
In the coming year, world leaders will once again consider sanctions against the country, and while the previous round hasn’t yet prevented the war from grinding on, foreign policy experts say the West must persist to see the effects over the long term. A report from Bruegel, a Brussels-based economic think tank, says that the combination of a large, persistent fall in Russian imports, and the permanent decoupling of European economies from Russian energy supplies, will have significant negative consequences for the Russian economy—and in turn, Russia’s grip on Ukraine. The same can be said for countries like China, where sanctions against leading Chinese companies have prevented the country from providing Russia with significant military or economic support.
Ukraine is also advocating for Russia’s removal from the U.N.’s Security Council, but experts are skeptical over whether such efforts will work, given the U.N.’s governing charter doesn’t allow the removal of permanent members of the Council. Removing Russia from the U.N. altogether would require a two-thirds vote in the General Assembly, and unanimous consent from the Council itself. Meanwhile, Western countries like the U.S., Britain, and France will continue to aid Ukrainian soldiers on the battlefield with a supply of arms.
3. Make an inevitable energy transition
The war in Ukraine has also led to a painful energy crunch as countries made do with less Russian gas in 2022. In the coming year, the world will still be dealing with shaky oil and gas markets while trying to create a new energy system.
During COP27 in Egypt this year, almost 200 countries agreed that their priority was energy security, signaling the embrace of a more nationalistic, protectionist energy policy in the future. It leads to two consequences: in the short term, more countries will turn back to fossil fuels like coal—leading to new polluting assets that can delay emissions targets. But over the long term, countries will also accelerate the building out of renewable resources.
Europe will make it through to the spring by depleting its gas storage, potentially leading to an investment boom in new sources of supply and alternative energy sources. While countries like China and India are already embracing state-directed (and subsidized) build-outs in renewable energy, the U.S. has $400 billion in funding and “Make it America” provisions with the aim of boosting jobs and manufacturing renewables at home. Europe is expected to follow suit to keep the industry on its shores.
The International Energy Agency has declared that “the world [is] set to add as much renewable power in the next 5 years as it did in the past 20,” with renewables growing by almost 2 400 GW by 2027—almost 30% higher than what was forecast last year.
Read More: 2022 Was Almost a Disaster for Climate Action
4. Get ready for AI and the metaverse
Artificial intelligence has begun redefining how people talk, work and operate businesses across industries. Smart cars are hitting the roads, cognitive supercomputers are able to diagnose a rare type of leukemia, and AI-powered systems can detect fraudulent transactions. AI even played a critical role in the development of Moderna’s Covid-19 vaccine. In the coming year, industry experts say that AI will grow more intuitive and increasingly use multiple “senses” at once, processing audio, visual and language data through multi-modal AI applications. One example of a tool like this in its early stages is DALL-E, which went viral earlier this year for generating original art based on text prompts.
Experts are also predicting that virtual and augmented reality will take off in the new year after the metaverse had a tough year in 2022, with many prominent platforms like Decentraland and Sandbox seeing an abysmal number of daily active users. But Meta, the parent company of Facebook and Instagram, is expected to release several new products in the coming months that will be cheaper and more mainstream. Meta’s ambition is not just to produce hardware but also to build virtual worlds, with the company spending more than $27 billion on the idea. Apple, the world’s biggest smartphone maker, is also expected to release its first attempt at an AR/VR headset.
Rival tech giants like Microsoft and Nvidia have also announced similar ambitions, while other industries like advertising to banking have also jumped aboard. Still, like numerous new year’s resolutions that seem forgotten by the time September rolls around, many tech analysts remain skeptical about the metaverse as the future of computing, particularly since Meta’s share price slumped in the last year.
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Astha Rajvanshi
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