UAE: Global economic cycles, geopolitical shifts and long-term policy choices shaping future governments were the focus of a high-level session which featured Ray Dalio, Founder of Bridgewater Associates and Dalio Family Office, in conversation with Dan Murphy of CNBC.

Dalio outlined five major forces influencing global markets and government decision-making, based on historical analysis spanning more than 500 years. These forces include the monetary and debt cycle, internal political divisions, shifts in the global geopolitical order, acts of nature such as pandemics and climate events, and major technological transformations.

He said the world is witnessing a breakdown of long-standing monetary, political and geopolitical systems, similar to transitions that historically occur once in a generation. Rising debt levels, growing political polarisation and the weakening of multilateral global frameworks were identified as key drivers of this shift.

Reflecting on the region, Dalio described the UAE and the Gulf as highly investable, citing long-term leadership focus on education, stability and social cohesion.

He particularly praised the UAE’s development model, noting his long-standing engagement with the country and the vision laid down by the late founder His Highness Sheikh Zayed bin Sultan Al Nahyan. He said the UAE has successfully created an environment of civility and vibrancy that enables people to be productive and innovative together, adding, “Just keep doing what you’re doing.”

He encouraged governments to continue fostering environments that support innovation, productivity and sustainable prosperity.

Addressing questions on wealth preservation, Dalio said gold remains the safest store of value in the current environment, particularly amid elevated debt, geopolitical tensions and the increasing use of capital as a strategic tool. He highlighted gold’s role as a key reserve asset and effective portfolio diversifier for governments, central banks and sovereign wealth funds, urging long-term strategic allocation rather than short-term trading.

Dalio warned that the global economy is approaching the threshold of a capital war, where financial assets, capital flows and sanctions could increasingly be used as instruments of geopolitical leverage alongside trade measures. He noted that such periods historically lead to capital controls and changes in reserve asset strategies.

On geopolitics, Dalio said the international system is moving toward a power-based order, shaped by economic, financial and military strength rather than consensus-driven multilateral institutions. He stressed the importance of diversification and neutrality, noting that neutral countries have historically shown greater resilience during periods of global conflict.