Davos 2025: Three Foundational Pillars Of World Being Challenged, Says Maria Vassalou

The three foundational pillars of the world—unfiltered free globalisation and peace—are currently being challenged, according to Maria Vassalou, head of the Pictet Research Institute.

"I believe this shift is not temporary but rather signifies a change in the global order and how the world functions," she said.

Vassalou underscored that the primary goals of Trump's administration are "America First," maintaining the supremacy of the dollar, and ensuring US dominance in the technology sector. "As long as these objectives are achieved, tariffs are unlikely to be significantly disruptive, as they serve more as a negotiating tactic."

According to Maria Vassalou, in a world of low to 0% interest rates, which is a consequence of the financial crisis and high levels of financial repression due to global monetary policies, this accommodative environment is now being reversed. Therefore, the expectation that we will continue to face lower interest rates in the future is misguided.

Additionally, Vassalou highlighted that India benefits from being a democracy with a public structure similar to that of Western countries. which is appealing to them.

"This also results in fewer risks of expropriation or other political challenges compared to other emerging markets. However, India needs to enhance the ease of setting up and dissolving businesses, reduce red tape, and improve quality control processes," she added.

Further, China and other BRICS nations have made significant efforts to bypass the US dollar, Vassalou said.

However, according to Maria Vassalou, the only impact these efforts have had so far is to circumvent the US clearing system, enabling countries like Russia to bypass sanctions imposed by the West. They have not made any substantial progress in replacing the dollar.