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“But the bigger worry remains the assumption that dust has begun to settle; that the shock from the crisis is temporary, when it is likely to be deep and persistent. Today, as in the past, over-optimistic fiscal authorities are over-estimating tax revenues. Financial supervisors want to believe that troubled banks are temporarily illiquid, not permanently insolvent. And central bankers like Mr Bernanke may soon attempt to restore employment to unattainably high levels. If they do so, the road to recovery will be long, and the lessons of history will have been ignored once more.”

To put it really simple. Growth is likely to remain low in the coming years, tax revenues will be modest, public debt will continue to rise or will remain elevated in the best case. In such environment it is very easy to scare markets, to experience herding behaviour, so see investors flee highly indbeted markets, or banks with heavy loads of risky sovereign bonds.

This lies ahead. This is what  a history of the past 200 years teaches us. You have been warned. It is the duty of the governments to prepare national balance sheets to weather the upcoming storm. It is the duty of company management to prepare for weaker consumer spending and and temporary disruptions in credit markets.

Investors, fasten you seatbelts real tight, the next wave of volatility is coming.

We all had a pleasure to enjoy the Greenspan post-Fed book – The Age of Turbulence. After hearing Ben Bernake speak last week I have this troublesome thought, that Ben’s post-Fed book will have the following title:

“Hurricane Ben. Great turbulence that I helped to create”.

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However many countries did very little to address the aging impact on the public finances. For example average public debt in the EU will rise to 150% of GDP in 2030 and to almost 500% of GDP in 2060 assuming unchanged policies. It is clearly unsustainable and will happen. So what are the alternative scenarios. The preferred scenario is reforms. Government around Europe come to Poland to learn how wee managed to reform our pension system in 1999 and repeat these reforms at home. But it is politically difficult. The alternative scenario is that no much will be done. And when the next decade begins, public debt will skyrocket. Young generation will face large tax increases to reduce balooning fiscal deficits. But young generation will have some tools to defend themselves. One obvious tool is to engineer large inflation, which will significantly reduce old generation pensions in real terms and restore balance in the public finances. You can see first signs of this process already emerging, IMF chief economist proposed to raise inflation target of central banks around the world from 2% to 4%. While inflation is likely to remain low in 2010 amid large nagative output gap (current global GDP well below the potential output) it will surely rise in the coming years and decades. And it will not be a purely economic process, it will be a strategic choice of young generation to punish old generation for creating excessive debt.

The longest inflation data is available for the Great Britain (see chart above presenting the price level data). It went up massively after world abandoned the gold (or bimetalic) standard in the 20th century. When we reproduce the same chart in 2050, price level index will be muuuuuch higher and the previous 50 years will have looked like a period of very stable prices.

Recently pension funds around the world started buying inflation-linked bonds to hedge against the young generation revenge scenario. If politicians continue to disregard necessary pension reform which reduce replacement rate, buying inflation-linkers may be the best long-term investment strategy.

And finally. Many developed economies which run large deficits and face huge aging costs will be at risk of defaulting in the coming years. High inflation is a form of soft default. I would recommend that rating agencies refine their rating models by adding the risk of inflation-default into their formal rating assessment.

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• EBC powinien ogłosić, że będzie przyjmował w operacjach otwartego rynku tylko obligacje tych krajów, które przedstawią wiarygodne plany naprawy finansów publicznych lub mają rating co najmniej A-
• Grecja, Hiszpania i Portugalia powinny zwrócić się do Międzynarodowego Funduszu Walutowego w celu opracowania programu pomocowego. Marek Belka jako szef Departamentu Europejskiego w MFW będzie miał pełne ręce roboty.
• Ministrowie finansów UE powinni spotkać się na nadzwyczajnym szczucie w celu rozszerzenia zakresu kryzysowego Memorandum of Understanding, tak żeby możliwa była pomoc finansowa UE krajom, które mają problemy z rolowaniem długu publicznego

Ostrzegałem na łamach tego blogu od pewnego czasu, że gwałtowny przyrost zadłużenia w wielu krajach rozwiniętych może prowadzić do drugiej odsłony kryzysu, tym razem kryzysu zadłużenia rządów. Z niepokojem obserwuję, że plany ograniczania deficytów budżetowych są na razie zawieszane (o czym świadczy chociażby rekordowy deficyt Obamy). Oliwy do ognia dolewa jeszcze MFW który zachęca do dalszego zwiększania deficytów.

Operacja Kasandra się rozpoczęła. Jedni będą łapać spadający nóż, inni sprzedadzą i poczekają na decyzje polityczne. Zapowiada się ciekawy okres. Bankierzy inwestycyjni wiedzą co mają robić.

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2010 global forecast

• World GDP will grow at some 2 percent, with a dip in world activity in the second half of the year amid governments withdrawing fiscal stimuli, compared with 1 percent recession in 2009
• Europe will struggle with high debt levels, Greek debt will be downgraded to one notch above junk, UK and France will lose triple-A ratings. Governments’ fiscal austerity  actions will come about the right time to restore confidence in the euro.
• Chinese will keep renminbi undervalued, other Asian countries will follow. European fiscal woes will lead to moderate dollar appreciation in the early part of the year, followed by possibly sharp dollar fall in the second half of the year, which will begin the long dollar journey travelled by the British pound hundred years ago. Dollar drop will take place after Chinese SAFE announces it will stop buying US treasuries and will invest incremental reserves in Asia, Africa and resource rich emerging markets.
• G20 will prove dysfunctional, will do a lot of talking and little action. Most important decisions will be taken during bilateral meetings. European Union will struggle to transform G2 into G3, and will eventually succeed. Belgian EU President, initially perceived as a weak fan of Japanese poetry will prove very effective and his star will shine stronger than that of the Gallic rooster on high heels.

You may shoot me with your words,
You may cut me with your eyes,
You may kill me with your hatefulness,
But still, like air, I’ll rise.

(Maya Angelou, Haiku poem quote)

• Tax on bankers’ bonuses will be avoided by creating bank branches in tax heavens. It will also accelerate the unstoppable trend of moving the world financial centre to Asia.
• Food prices will start to rise again.
• Global income disparities will become larger than ever. New multibillion fortunes will be created in emerging markets, while at the same time the number of people living in extreme poverty will rise.
• Bankers will have learnt nothing from the crisis. Zombie-bankers will continue the huge dollar carry trade (short dollar, long commodities and equities), it will work nicely in the first half of 2010, then will collapse with strengthening dollar.
• Central banks will err on the dovish side, printing money and keeping interest rate at zero for longer than necessary. It will feel nice in 2010, but the price will be paid later in terms of high global inflation and volatile output. Alan Greenspan’s Age of Turbulence will be set in motion. In late 2010 Paul “The Hammer” Volker will refuse to shake hands with “Helicopter” Ben Bernanke during high level reception, media will notice.

2010 Polish forecast

• In 2010 growth will accelerate to 2-3% from a notch above 1.5 in 2009. Poles will the most optimistic nation in Europe. At the end of 2010 Poland will embark on the Golden Polish Decade, best the years in the history of Poland.
• Poland will continue to spend on infrastructure creating many jobs and removing number of transportation bottlenecks.
• Ministry of economy will create a special taskforce to improve business regulatory environment, a number regulatory changes will be enacted and Poland will jump (in 2011) in the World Bank Doing Business. It will also improve chances of Civic Platform to win election in 2011 despite emerging new contenders.
• Polish fiscal Policy will continue to remain a drag on Poland’s growth prospects. No major reforms will be undertaken until 2012. Finance ministry will continue its creative budgeting and will try to convince European Commission that Poland’s public debt should be counted without the costs of the pension reform. Commission will remain unconvinced.
• Fiscal deficit will be smaller than planned but will exceed 6 percent of GDP for the second year in the row. Finance minister will call smaller than expected deficit a big success.
• Donald Tusk will make ten more promises that will not be fulfilled.
• Presidential elections will be very exciting, and will set the stage for transformation of the political scene in 2011. New Prime Minister will not be so new.
• National Bank of Poland will start preparations for future foreign exchange market interventions, but no large interventions will take place until 2011, when strong pressure on zloty appreciation will emerge ahead of Poland’s planned ERM2 membership in 2012.
• Future Polish global internet giant will be created by bright Polish students. In 2010 it will barely make ends, but in the coming years it will reach market cap north of 1 trillion renminbi. A number of Polish companies will plan global expansion, and they will achieve great success in the forthcoming years. Many companies will look far east instead of looking west.

Outside-the-box

• Pre-Lehman shadow banking will shrink and will become tightly regulated (hedge funds, non-bank financial intermediaries, SPVs). However the new shadow banking will be born while regulators will continue to look in the yesteryear direction.  Banking (or more broadly financial) services will become a business process added to other retail sales or services processes. Retailers will form their own banks, will offer credit cards and other consumer finance products, will collect deposits and offer financial products which enhance their core product sales. It has already started in South America and in some big hypermarket chains.
• Israel will bomb Iran nuclear sites, unknown unknowns will remain unknown. There will be more terrorist attacks attempts in the aftermath of the Israeli attack.
• New climate summit will conclude with firm commitments to carbon dioxide emission reductions, rich countries will agree to provide more funding. Global carbon trading will emerge and will become a big market in the coming years.

Lighter forecasts

• Number of searches in Google will top 100 billion per month, compared with 80 billion in late 2009. Pizza hut will remain the top search item among food and beverages. Among European politicians Sarkozy and Berlusconi will continue to fight for the most searched name on Google.
• Number of Facebook members will top 500 million, as compared with 350 million in 2009. Average Facebook member will spend one hour per day on Facebook (as compared with 55 minutes in 2009), which will total 500 million Facebook man-hours per day, or more than billion working man-months for entire 2010. If each Facebook member worked instead of playing and his/her monthly wage was 1000 dollars, world GDP could have risen by  more than trillion billion dollars, which is more than the GDP of Korea or Australia (2008 data, nominal dollars)
• China will continue to build its image as the world power. The quest for fastest (trains), tallest (building), largest (banks, corporations), best (schools, takeover deals) will continue. To cement its world second biggest economy status China may establish a “Tsai Lun Prize” for excellence in innovation, literature, culture, and sciences (on maybe more categories). The prize will be 10 million renminbi, i.e. some 20-30 percent higher than the Nobel prize. In the coming decade it will dwarf Nobel prize in terms of reputation. After all paper invention brought more good to humanity than dynamite invention.
• The final of the world football championships in South Africa will be between African and South American teams.
• I will publish my first fiction book in Polish, it will become a bestseller.

I wish all my blog readers a Happy and Prosperous Year. It will a better year than 2009.

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My 2009 forecasts and their performance

• Crisis and recession.

All large industrialized countries will be in recession, with US facing the biggest output drop among large economies amid largest past excesses. Hard economic data will be very gloom for the entire 2009, but leading indicators will begin to flash a possibility of mild recovery here and there in 2010. But I do not expect a linear sequencing, there will be premature hopes and continued negative surprises, which will be reflected in major stock exchanges performance. Brace for continued rollercoaster rise, but this time around there will be both, sharp ups and downs. Global inflation will remain very low, dangerously low in some places in 2009, before it shows its ugly face again in 2010, 2011 at the latest.

In general it did materialize in 2009, with one exception, US did better in relative terms than I anticipated.

• Obama xiānsheng (先生,which is Chinese for Mr, Sir)

In line with IMF and Paul Krugman recommendations new US administration will embark on a massive spending plan, worth much more than one trillion dollars. On the international arena we will see a major breakthrough regarding US international initiatives. US will no longer act and the global policeman, or global policy agenda setter. It will become global policy agenda facilitator, bringing new global players together, and most notably China. There will be few dangerous places in the world in 2009, think of Palestine and Jewish-Arab conflict, or India-Pakistan affair. This sets the stage for more intense terrorist activities, which may constrain US president foreign policy options.

This was largely correct, with G20 meetings becoming most important global political event. Although recent collapse of the Copenhagen climate summit casts some doubts on whether US will keep its new policy course.

• Protectionism

With global growth faltering politicians in many countries will embark on protectionist path (import tariff on cars in Russia, broad import tariffs in Ukraine, import tariffs on steel in India already imposed in 2008). This will be very dangerous and can lead to a prolonged global recession. Combating protectionism will require major international diplomatic effort and understanding that free trade is one of the most important global public goods.

Partly correct. Many countries resorted to different forms of protectionism, but at the end of the day we avoided the worst, and most measures were kept within WTO scope of flexibility.

• New Bretton Woods / New G??

2009 will possibly become a milestone in forming new global governance structure, although the process will be long and last years if not a full decade. IMF will not be endorsed as a global stability supervisor unless major governance changes take place and BRIC countries receive more voting power. It is also unsustainable to have all head offices (IMF and World Bank) in Washington. With videoconferencing broadly available there is now room to relocate IMF/WB head offices to Europe and Asia. Such a move could indeed increase the odds of transforming outdated Bretton Woods governance model into a new one, that reflects 21^st century power structure. Consequently the old G7/G8 group should be replaced by new G8, with European Union having one seat. First informal meetings in such company may already take place in 2009.

Good forecast, new G20 group was created, but it fell short of my suggestions that the EU or at least Eurozone should be represented by one seat. IMF/WB reform was accelerated as predicted.

• Dollar

In 2009 dollar will begin its long term journey, once travelled by the British pound in early 20^th century.

Dollar did fall against euro in 2009, but the drop was somewhat smaller than I anticipated. However the was a deluge of articles in 2009 predicting dollar decline amid fiscal misery. So the trip has begun indeed, but with a small step in 2009.

• Climate change

2008 was a relatively good year, with relatively few climate disasters (UPDATE: according to Munich Re report 2008 was a terrible year regarding natural catastrophes, taking away some 220,000 lives, despite the fall in overall number of disasters by 22 percent to 750). However there is strong rising long-term trend of climate disasters, and if 2009 is just an average year we will see much more adverse climate than in 2008. This will speed up climate change politics, with US joining EU efforts to reduce greenhouse gasses emissions. Carbon emission rights trading will become the next big market and despite global investment recession, investments in renewable energy will go up and then will soar in 2010 with returning high energy prices.

Poor forecast. Copenhagen summit yielded no tangible agreement, but many countries made emissions reduction commitments. So far carbon trading is not the next big thing, it will come later. The forecast was premature.

• Commodity prices and Russia

2009 will be a recession year so commodity prices will remain low, reducing investment in traditional energy (oil in particular). With global energy demand recovering in 2010 this capacity constraints will begin to bite and oil prices will rise, possibly sharply. I think that this rise will take place in 2010, if recession is longer than in 2011. In such scenario Russia will continue to experience capital flight in 2009 and one cannot rule out that it will lose most of its 450bn currency reserves and will need IMF help again (or a loan from China?). 1998 déjà vu.

Good forecast, commodity process remained low for most of the year, Russia did experience capital flight and very deep recession. However foreign exchange reserves loss was smaller than I expected, and oil price rebound definitely helped.

• European Union / Euroland

Scary times. With Germany shrinking as much as 3 percent in some scenarios European Union and Euroland will face a once in a lifetime test, a survival test when it comes to European solidarity.  While Iceland, Denmark and even UK sends smoke signals to join using shortcuts, the real question is how European politicians will behave when truly hard times come, when deep recession and unemployment bite. We have already seen Berlusconi “buy Italian” campaign. 2009 will witness Mr Populist vs. Mr Economist, 12-round, heavyweight fight.

Good forecast, with Greece downgraded EMU fall apart talks resurfaced. UK and France received credit downgrade warnings, public debt is going though the roof.

• Poland’s strategy

By now ruling politicians understood that economic misery will last longer than one year and that 2010 may be more difficult than 2009. Prime Minister Tusk will run for president in 2010, so economic gloom may severely inhibit his chances to replace Kaczynski at country top post. It bodes well for government anti-crisis activity, as always when political incentives are right then economic and reform miracles can happen. So expect rapid implementation of government anti-crisis plan, with a lot of help offered for firms which will be deprived from access to bank credit. However, with fiscal picture rapidly deteriorating  Poland will likely delay its decision to join ERM2.

Mixed forecast. Government implemented a lot of … PR measures, and very little in reality. So called savings were shifts from budget to off-budget funds. Various programs (guarantees or labor flexibility enhancers) were not used at all by firms as too expensive or too rigid. Unemployment will continue to rise in 2010, but growth will inch up.

• Poland’s growth outlook

My central forecast is 2- growth in 2009, and 1+ growth in 2010, conditional on government acting quickly and decisively. Exports and investments will decline in 2009, and private consumption will slow, despite tax cuts. Consequently government spending will have to go up, geared towards building hard and knowledge infrastructure, very needed and long overdue investment in the country future. If done well may keep Tusk as prime candidate for president, if done badly may cost him political future.

Good forecast. 2009 growth will likely by 1.6-1.7, and government did a good job spending EU funds on infrastructure. Also government spending went up like hell, from 42% of GDP in 2008 to expected almost 48% of GDP in 2010. I will revise my 2010 growth outlook upwards.

• Poland’s politics in 2009

While European Parliament elections in 2009 (4-7 June) will be a political non-event in Poland, I see a large likelihood that some important political processes will begin in 2009 and accelerate in 2010 before presidential elections. Firstly, the young generation (people who started their adult professional life after 1989) will have a stronger voice in Polish politics. Will they form their own party and score well in 2010 (president elections) and 2011 (parliament elections), it is still a tough call. But three things indicate that it can happen: (1) economic gloom and doom in 2010 will make people unhappy about the ruling party; (2) Obama way of winning, using internet and social networking shows that young, open minded, globally-minded generation can and should replace older layer, which is busy fighting yesterday wars that nobody understands.  Thirdly look at the following questions. Why after 20 years of reforms Poland is a laggard in global competiveness ranking, it fell last year from 68th to 76th place. Why after 20 years of reforms we still do have decent roads and railway tracks? Why Poland scientific output places us next to Albania at times when knowledge and innovation determine country future standard of living. Why at times when internet access is key to success, Poland has the highest digital exclusion rates in Europe? The why list is very, very long.

Who can do it? One obvious candidate to lead young generation is Rafal Dutkiewicz, president of Wroclaw. Lech Kaczynski has catapulted himself from Warsaw president to Poland’s top job, so it can be done. But Polska XXI was a false start, new opening cannot be done with old pricks. So unless Dutkiewicz rethinks his strategy, he is no challenge to Tusk.

Assessing this forecast is tough. European Parliament elections were non-event. We have not seen young generation forming their own voice in 2009, other political initiatives (Polska XXI, Polska Plus, others) proved non-events, and Rafal Dutkiewicz rightly pulled back. Will Andrzej Olechowski convince young generation to back his vision of presidency, it is too early to judge. Given very poor quality of economic and financial policy in Poland (with notable exception of EU funds spending) I do hope that new generation of leaders will emerge in 2010, but honestly I do not see the candidates yet.

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In good old days we had 3-5-3 banking. Banking was simple, almost dull business. We took deposits at 3%, gave loans to client we knew at 5%, and went play golf at 3 PM. 3-5-3 simple banking. Today we employ math and physics Ph.Ds to create banking products. It is high time to go back to SIMPLICITY and to 3-5-3 banking. Therefore I see very little hope for decent progress, for decent reform, and for avoiding crisis-prone environment unless we properly eliminate the key factor behind future crises, which is excessive COMPLEXITY of financial instrument. To achieve simplicity we need LESS REGULATION, not more, and we need SMART GLOBAL REGULATION. G20 leaders so far failed to grasp this simple truth, and, unfortunately, seem to march in the opposite directions of more complex regulation.

Another issue that escaped G20 leaders attention is CONCENTRATION of financial activity. So far large banks took over other large banks that failed to survive on its own. This is dangerous as large concentration of power of financial institutions was another key reason behind the crisis, for example powerful banks were able to influence regulation, were able to agree on rules of the game, to mention the fourteen powerful families from the Superclass, David Rothkopf book. Without solving the issue of concentration and complexity we will continue to live in dangerous times.

I would suggest two issues to be put on the global agenda for Canada meeting – LESS COMPEXITY and LESS CONCENTRATION:

-          G20 is too many to take binding decisions, have you ever see a company managing board with 20 members that is effective. With respect to financial stability there should be a much smaller group that provides recommendations to leaders. A good starting point would be to form a Global Financial Products Forum, that would make recommendations on the path towards SIMPLICITY in the area of financial products. It’s members should be USA, UK, Eurozone, China, Japan and representative of the world of Islamic finance. The mandate should be delegated to people who understand the global financial landscape and have experience in central banking or financial regulation, for example: Frederick Mishkin (USA), Willem Buiter (UK), Otmar Issing (Eurozone) , Yi Gang (China), and equally well qualified senior figures from Japan and the world of Islamic finance

-          GPFP presents a typology of financial risk that should suffice the needs of real businesses around the world regarding financing and asset allocation.

-          Anything outside this scope is subject to small Tobin tax levied on every transaction above certain size. Revenues from this tax are used to fund the global regulatory body, which employs the best minds in the financial sector, such that their competencies and skill far outpace skill of those who create toxic financial instruments. Only when regulators have global reach and are very well paid, they will be able to act timely and effectively

-          Actions should be taken to break biggest financial institutions into smaller units, and in order to prevent the effect of “too interconnected to fall” we should design effective circuit breakers, to prevent domino effects.

We all want effective and safe financial markets. In the past decades effective meant less safe. It is high time to reverse this dangerous path. The only way to achieve this is less complexity and less concentration. We should return to 3-5-3 banking.

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There is no time to be spared, their is no money to be wasted, there is no man or woman to remain idle, we shall all unite to fend off the biggest threat that has faced Europe in the last two thousand years. It is this defining moment in the history of Europe, when national divisions should be removed, when local agendas should be abandoned, when we, Union citizens proud of our great history and culture should rise and declare: no more.

Wars in the past twenty centuries were fought by armies or navy fleets. The grand war of the 21st century is fought by scientists, researches, enginneers, and companies that turn ideas into products sold to billions of consumers. Before, the winning armies had superior weapons, more soldiers, wiser commanders-in-chief. In the 21st century battles are fought by teams of scientists, and the victory requires more creative minds, better ideas, better labs, better ability to commercialize innovation, better ability to market and sell new products and services. Nations that fail to develope these skills will persish, nations that build modern knowledge armies will prosper. One thing, however, has not changed. Similarly to wars of the past, the odds of winning the 21st century research and science war will be higher if our armies are led by great strategic minds, minds that can warm souls, can breed hope and optimism, can reinvigorate our innovative fabric that was with us for centuries. The time for the Union development strategy has come. It is a matter of choice.

….

I am planning to keep my speech in the military style. The key goal of my speech is to convince conference participants, that without effective Union-wide science and research strategy Europe can become a failed state in the next few decades, plagued by aging society, weak public finances, flooded by innovative products from Asia. I am looking for ideas, what should the new EU science and research strategy look like, what steps should be taken to win this knowledge war, do we have commander-in-chief to lead our scientific troops, who could play that role. What are Europe’s most significant achievements in the past that could help build effective research battle strategies and tactics in the future. Please share your ideas.

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Another book  I read this weekend was Jacques Attali “A brave history of the future”. Mr Attali is French economist and cofounder and first president of the European Bank of Reconstruction and Development. He tells a story of traveling “cores” which for some time – usually 50-150 years, become the center of the world, powerful, rich, innovative. He presents 9 episodes when cores were created, the last one in California. Then book presents a story showing USA loosing its dominance (after 2030) and world becoming a giant, borderless market ruled by hypernomads and insurance companies, with rapidly diminishing role of the state. Henry Kissinger called this book brilliant and provocative.

So you have two just released books with forecasts for 21st century. American CIA-related strategist predicts USA will rule the world, and French economist expects planetary war and planetary democracy to shape the new world, put end to USA dominance and create a global world powered by IT, widespread surveillance a run by hypernomads. But both books have common themes. Widespread and advanced technology is one, in one case USA will master it and use to its strategic advantage, in other book private companies use technology to take power from the state.

Friedman book is fun to read, clear, well explained, almost impossible to dismiss based on presented logic. Unfortunately the logic is partly false. It is based on the assumption, that past powers will become future powers (Turkey, Poland, Mexico were equal of even more powerful than todays global or regional powers in the past). The second logical mistake is that technological progress originates around military spending, and by definition USA spending dwarfs all others (indeed USA defense budget is 50% of global defense spending) so technological progress can be made only in USA (internet, space technology). But these days it is perfectly possible, that some maniac scientist will come up with a new energy formula in anyplace in the world, and the power of commercialization of innovation is highest in USA – true, but other countries can deliver as well. The third possible mistake is assumption that wars fought between countries will determine the future global order (because the always had). As you can see in the Attali book, there is another possibility perfectly plausible, when the masters of finance and innovation set the stage for the 21st century, and private armies become more powerful that state ones. So do not get to excited about Poland and Turkey becoming global powers and waging a war. Polish king Jan Sobieski the 3rd has fought the war against Turks and won the famous Viena battle, saving Europe from Turkich flood. This is unlikely to be repeated.

Late addendum. Please find below why Poland has far lower odds than Turkey or Mexico to become the world power, unless we one day get a smart government and right policies are adopted. Chart below taken from OECD  publication on education in 2030 shows that Poland will face dramatic fall in the number of students in 2025, irrespectively of the analyzed scenario. Turkey and Mexico will be on the opposite side of the scale, please note that today all three countries have similar number of students (2.1-2.3 mln). China has some 35 mln students, just a small reminder.

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