Professor Nouriel Roubini is known for his critical commentary on all things economy, and in his sit-down with AMEinfo, he shared his apathy to blockchain.
In a one on one with renowned economist and thought leader Professor Nouriel Roubini, at the TOP CEO 2019 in Bahrain, AMEinfo discussed the issues of regional economic slowdown and the viability of Blockchain.
Roubini is a professor of economics at New York University’s Stern School of Business. He is the Chairman of Roubini Macro Associates, a global macroeconomic consultancy firm in New York. He was Co-Founder and Chairman of Roubini Global Economics from 2005-2016 – a firm whose website was named one of the best economics web resources by Business- Week, Forbes, the Wall Street Journal and the Economist.
Roubini is the person to talk about economic doldrums, him being the co-author of an article published by Project-Syndicate.org entitled ‘The Makings of a 2020 Recession and Financial Crisis’ where he says: “Come 2020, the stage will be set for another downturn – and, unlike in 2008, governments will lack the policy tools to manage it.”
Did he mean the region? Maybe or maybe not, but what is for sure is that he candidly laid out his ideas on why the region was struggling and why his ideas on blockchain, just like cryptos is bearish at best.
Is the region a mess economically?
“Of course, people worry about many of the important economic challenges and risks present in the region rich with oil resources.
“So are challenges, challenges are that oil prices are highly volatile, especially last year where they went all the way to $75 per barrel, down to $49, and now back to $65. Fiscal and economic outlooks were constrained and longer term plans emerged with talks throughout the region centering on economic diversification and modernization.
"But these things don't happen overnight.
"Success stories in Mexico, Malaysia, and Indonesia took two generations, 30-40 years because of diversifying away from oil, copper or whatever pillar upon which these economies were built on.
"Also, there's a long list of factors that drive diversification strategies, like macro stability, institutions, government policies, opening up to trade and investments, stable business environments, regulations, competition, policy, quality of the labor force, and so on.
“Yes, some of these things have moved in the right direction, and others are still lagging behind, so it’s is something that takes decades and not overnight.
“So the question is, do the leaders of the region have the commitment to say, ‘It's going to take a long time, but we'll do it.’
“I think leaders in the region have finally realized they have to change, and that they were not going to just rely on energy, but it takes a long time to change, and add to that geopolitical issues in the region, so I would say governments have to focus on domestic challenges rather than foreign policy adventures that are costly.”
Is blockchain really the next revolution?
"No, no, I don't. I don't believe in blockchain. There's a revolution called FinTech. And it's not the blockchain. Fintech is a combination of AI, big data, Internet of Things. Insurance and asset management are not into blockchain, and you know, there are billions of people who are already doing billions of transactions every day with digital payment system like alipay, Applepay, etc. and I don't know why people talk so much about blockchain.
“There isn't a single application using blockchain that has been successful. At an annual meeting recently, CEOs of three major financial institutions, Bank of America, Wells Fargo and MasterCard say they spent billions on blockchain experiments, created dozens of patents, and found that they could not see a single application that made sense.
“People talk about this like it a solution to poverty or cancer, to brag about every problem under the sun, but it doesn't resolve anything. Enterprise blockchain is private, not public. It’s not permission-less, it’s not centralized and it’s not really distributed.
“It’s a glorified database or spreadsheet. We already have distributed databases, you know like Google Docs, which is shareable and changeable. There's no applied use case that works.
“I could be wrong, but anybody can be wrong, and maybe they're (blockchain evangelists) wrong."