At the time of writing the US presidential election is all over bar the shouting, or should I say sulking. President Trump is refusing to accept a fair and clear defeat and is instead claiming massive voter fraud without a shred of evidence to back the claim. The president and his team appear to have stopped running the country despite its facing the worst pandemic in living history.
President-elect Joe Biden on the other hand is ignoring the tantrums and is busy building up his team to tackle the issues that have torn the country apart. While the election is all about the United States, its outcome will have a global impact. So what does a Biden victory mean for us? The answer is that it will have quite an impact. Why?
America has led the world in many fields, generally with pride. In the case of the coronavirus it leads the world in a way that it wishes it didn’t. It has by far a larger number of cases and deaths than any country in the world. It has a population roughly 20% larger than Indonesia but currently its daily death rate through Covid-19 is more than 10 times higher. Joe Biden is not going to stop this overnight, but he is already making plans for action as soon as he is inaugurated on 20th January. That will not have a direct impact on Indonesia but if the pandemic can be brought under control in the US it will have a big impact on the global economy. Bali could even see a return of American tourists.
A more outward-looking America could also make a global contribution to helping people around the world to access a proven vaccine. Once Covid-19 is beaten, the world can start turning again and Bali will be a major beneficiary of the pent-up demand for travel and leisure. A hint of this can already been seen in Europe where people are optimistically starting to book holidays.
Trump’s presidency has given a boost to those holding racial prejudices and has given legitimacy to racial hatred. His banning of Muslims from five Muslim countries was not directed specifically at Indonesia but Indonesian students whose ambition was to study in the US can no longer feel welcome. Trump’s disdain for China has also encouraged racial abuse of anyone looking Chinese in the US. Under Joe Biden’s leadership there is great hope that foreigners, and particularly students, will feel more welcome and less threatened in America.
During his term Trump has reversed or watered down over 70 regulations on climate, clean air, water and wildlife protection according to a Harvard Law School study. One of Trump’s earliest actions was to pull out of the 2015 Paris Agreement. One of Biden’s first actions will be to rejoin! This will be good news for the US and the rest of the world which has seen an unprecedented and devastating series of hurricanes, floods, droughts, forest fires and other climate events in the past couple of years. While the scientific community is almost unanimous in declaring that this is a result of human behaviour President Trump dismissed global warming as a ‘hoax’ and has given encouragement to industries that are known polluters.
Under Biden we can expect to see a faster transition to renewable forms of energy. While the problems of climate change will remain one of the planet’s major challenges, having the US on board to lead the fight will be a major contribution to a more eco-friendly planet.
Most expats in Bali will have investments of some kind, whether in property, shares, savings plans or pensions. They will all be very conscious of the impact of the pandemic on their investments. Perversely during the crisis, the US stock market has flourished. While Trump takes the credit for this, the fact is that the boom has been led by tech. companies that have been able to take advantage of the lockdowns. Companies like Amazon, Zoom, Apple, Netflix, Google and Facebook have become life essentials in an immobile world. They are likely to continue to flourish under Biden, as will companies and funds that are well-governed and sustainable. We can expect a major push into renewable energy sources.
There will remain many challenges ahead for investors as countries dig themselves out of recession. Those holding investments and pension plans should review them urgently to ensure they are adapting to a low-interest and low-return environment and are positioned to benefit from the ‘new normal’ post-pandemic world.
All in all, the Biden victory should give hope to a country that is in deep crisis and give encouragement to the rest of the world that we can all work together again. Bali too should benefit!
Colin Bloodworth, Chartered Member of the Chartered Institute for Securities and Investment (UK), has spent over 20 years in Indonesia. He is based in Jakarta but visits Bali regularly in normal times! If you have any questions on this article or related topics or would like to receive a free monthly newsletter on financial matters you can contact him at email@example.com
You can read all past articles of Money Matters at www.BaliAdvertiser.biz
Copyright © 2020 Colin Bloodworth