Global Capital Formation is influenced by many factors and the balance shifts from time to time depending on a number of factors. Balance of power is shifting and within this context energy is the key factor. The industrial revolution brought about major changes in society and also needs a supply of different types of energy – all countries need an increasing supply to remain competitive. How societies use and need energy will affect their economic wealth and balance of trade.
Russia is now a dominant player as they have big reserves of oil and gas. As emerging economies, India and China need energy and capital to stay competitive in the global markets. As a result of a global recession, funds that would normally be available for investment are being kept within nations and lending practices are getting more conservative. This has most definitely affected capital intensive projects. In the global capital formation race, more countries will have to compete for fewer resources and economic recovery will vary for individual countries.
Some of the key factors that will define how energy and global capital formation impact future development are:
It is very important for every country to invest its resources well and also to know that the world is connected in every way. Investing in one’s own country and other countries will ensure good development.