1 00:00:00,080 --> 00:00:03,480 Speaker 1: The plan for me is always learning, find new opportunities, 2 00:00:03,520 --> 00:00:07,360 Speaker 1: and never limit yourself. I am always learning, I am 3 00:00:07,400 --> 00:00:12,160 Speaker 1: always trying to find new opportunities. If you can say 4 00:00:12,160 --> 00:00:14,560 Speaker 1: that you can do that, I think there's nothing to 5 00:00:14,600 --> 00:00:25,560 Speaker 1: be scared of. Hello and welcome to Stephanomics, the podcast 6 00:00:25,600 --> 00:00:28,160 Speaker 1: that brings the global economy to you. What you heard 7 00:00:28,200 --> 00:00:31,400 Speaker 1: there was the voice of youthful optimism twenty year old 8 00:00:31,480 --> 00:00:34,520 Speaker 1: punnies from Bangkok. For most of the past fifty years. 9 00:00:34,520 --> 00:00:37,800 Speaker 1: That optimism would have been well founded. Any young person 10 00:00:37,880 --> 00:00:40,240 Speaker 1: growing up in one of the fast growing Asian economies 11 00:00:40,440 --> 00:00:43,879 Speaker 1: could expect to end up comfortably better off than their parents. 12 00:00:44,479 --> 00:00:47,120 Speaker 1: But it doesn't feel that way for those just entering 13 00:00:47,159 --> 00:00:51,760 Speaker 1: the jobs market in The pandemic has hit job prospects 14 00:00:51,760 --> 00:00:55,080 Speaker 1: for young people in Asia hardest of all. They're calling 15 00:00:55,080 --> 00:00:59,680 Speaker 1: it the lockdown generation, and Bloomberg Senior Asia Economy correspondent 16 00:01:00,160 --> 00:01:02,240 Speaker 1: end the Current is going to tell us all about 17 00:01:02,240 --> 00:01:05,520 Speaker 1: them a little later. But this week I also wanted 18 00:01:05,520 --> 00:01:08,440 Speaker 1: to give you a sneak preview of some smart analysis 19 00:01:08,480 --> 00:01:11,839 Speaker 1: we've been pulling together for Bloomberg's New Economy Forum, which 20 00:01:11,880 --> 00:01:15,880 Speaker 1: will be entirely online this year but starts on November six. 21 00:01:16,800 --> 00:01:19,080 Speaker 1: All the Bloomberg economists have been put to work on this. 22 00:01:19,480 --> 00:01:22,560 Speaker 1: Later on we'll hear Eurozone economist may have a Kuzin 23 00:01:22,920 --> 00:01:25,720 Speaker 1: tell us about a project she's done looking at how 24 00:01:25,840 --> 00:01:30,080 Speaker 1: climate change could affect the global economy under different scenarios. 25 00:01:30,120 --> 00:01:33,240 Speaker 1: But first, our chief economist, Tom Olig, a great friend 26 00:01:33,280 --> 00:01:35,680 Speaker 1: of the podcast, is here to give us an overview 27 00:01:35,920 --> 00:01:40,560 Speaker 1: of this special report. Tom, I've got the report in 28 00:01:40,560 --> 00:01:42,880 Speaker 1: my hands, hot off the presses. It's going to be 29 00:01:42,920 --> 00:01:46,800 Speaker 1: available on the Bloomberg New Economy Forum website any minute now, 30 00:01:46,880 --> 00:01:48,960 Speaker 1: which is a rare treat for those of you who 31 00:01:48,960 --> 00:01:52,360 Speaker 1: don't usually get to see Bloomberg's economic research. There's so 32 00:01:52,440 --> 00:01:55,680 Speaker 1: much here, but I wanted to focus Tom on your 33 00:01:55,720 --> 00:01:58,480 Speaker 1: projections for what the world could look like in twenty 34 00:01:59,680 --> 00:02:03,200 Speaker 1: You're a brave man looking that far ahead. But if 35 00:02:03,240 --> 00:02:06,559 Speaker 1: you step back with that kind of long term view, 36 00:02:06,800 --> 00:02:08,920 Speaker 1: I guess you can get to the nub of the 37 00:02:09,040 --> 00:02:13,320 Speaker 1: big forces driving the global economy. What different scenarios did 38 00:02:13,320 --> 00:02:17,120 Speaker 1: you think about? Well, Stephanie, let's keep in mind that 39 00:02:17,160 --> 00:02:19,560 Speaker 1: I just published a book called China, The Bubble That 40 00:02:19,639 --> 00:02:23,880 Speaker 1: Never Pops, So clearly you're talking to someone who's who's 41 00:02:23,919 --> 00:02:27,480 Speaker 1: not afraid of leaving hostages to fortune. So we're looking 42 00:02:27,520 --> 00:02:30,880 Speaker 1: out to the world in and clearly there's a huge 43 00:02:30,880 --> 00:02:33,840 Speaker 1: amount that could change between now and then, and we're 44 00:02:33,840 --> 00:02:39,359 Speaker 1: seeing in how a pandemic can shape the trajectory for 45 00:02:39,520 --> 00:02:42,880 Speaker 1: major economies. But what we've done is we've used a 46 00:02:42,919 --> 00:02:46,639 Speaker 1: growth accounting framework, so we've looked at how demographics is 47 00:02:46,680 --> 00:02:49,880 Speaker 1: going to change, We've looked at the likely pathway for 48 00:02:50,200 --> 00:02:55,359 Speaker 1: capital spending and productivity growth, and by doing that, we've 49 00:02:55,400 --> 00:03:00,680 Speaker 1: put together baseline forecasts for GDP growth over the next 50 00:03:00,720 --> 00:03:04,040 Speaker 1: three decades. And then we've layered on top of those 51 00:03:04,200 --> 00:03:08,359 Speaker 1: scenarios for some of the mega trends globalization, climate change, 52 00:03:08,560 --> 00:03:11,880 Speaker 1: and how they could shape the outlook. So one of 53 00:03:11,919 --> 00:03:13,560 Speaker 1: the one of the pieces you did, I guess it's 54 00:03:13,600 --> 00:03:16,519 Speaker 1: a familiar story in a sense, the shift in economic 55 00:03:16,600 --> 00:03:20,160 Speaker 1: power from west to East that we expect to see 56 00:03:20,440 --> 00:03:23,320 Speaker 1: happen in that time and that, but the numbers are 57 00:03:23,360 --> 00:03:29,120 Speaker 1: quite significant. Yeah, So for the last seventy years, there's 58 00:03:29,160 --> 00:03:33,079 Speaker 1: been a period of really remarkable stability in the sort 59 00:03:33,080 --> 00:03:36,640 Speaker 1: of the economic balance of power. We've had the US 60 00:03:36,640 --> 00:03:41,040 Speaker 1: and Europe firmly in the driving seat, and the intellectual 61 00:03:41,080 --> 00:03:45,480 Speaker 1: consensus has been centered around the benefits of free markets 62 00:03:46,280 --> 00:03:51,840 Speaker 1: and the power of democracies to drive economic dynamism. Now, 63 00:03:52,040 --> 00:03:55,680 Speaker 1: in the last fifteen twenty years, we've seen the beginning 64 00:03:55,680 --> 00:04:00,560 Speaker 1: of a transition. China is rising, India are coming up 65 00:04:00,600 --> 00:04:04,320 Speaker 1: behind them. So what our forecast show is that this 66 00:04:04,400 --> 00:04:07,440 Speaker 1: is really just the beginning of the transition, and in 67 00:04:07,480 --> 00:04:11,880 Speaker 1: the next thirty years we're going to see China, India 68 00:04:12,280 --> 00:04:17,360 Speaker 1: other Asian emerging markets like Indonesia rising up the global rankings. 69 00:04:17,760 --> 00:04:20,360 Speaker 1: By the time we get to twenty fifty, China will 70 00:04:20,400 --> 00:04:23,480 Speaker 1: firmly be in the number one spot, India we think 71 00:04:23,520 --> 00:04:26,159 Speaker 1: will be number three and closing the gap with the 72 00:04:26,240 --> 00:04:29,880 Speaker 1: United States, and Indonesia could well be up in the 73 00:04:29,920 --> 00:04:33,680 Speaker 1: big league as well. Now, as that happens, it's not 74 00:04:33,760 --> 00:04:36,880 Speaker 1: just a geographical shift, right, It's not just a shift 75 00:04:36,920 --> 00:04:40,640 Speaker 1: from west to east, it's also a shift from advanced 76 00:04:40,680 --> 00:04:45,320 Speaker 1: economies to emerging markets. And it's a shift from economies 77 00:04:45,360 --> 00:04:49,040 Speaker 1: which operate on a free market principle to economies like 78 00:04:49,160 --> 00:04:52,000 Speaker 1: China and in a different way, India that have a 79 00:04:52,120 --> 00:04:55,919 Speaker 1: much higher degree of state intervention. And that's actually that 80 00:04:56,000 --> 00:04:58,640 Speaker 1: is a very very striking so so what what what's 81 00:04:58,680 --> 00:05:02,560 Speaker 1: the numbers there in terms of the share of the 82 00:05:02,600 --> 00:05:06,040 Speaker 1: global economy that, if you like, in democratic hands versus 83 00:05:06,160 --> 00:05:11,520 Speaker 1: nondemocratic and how does that change? Um so, um so. 84 00:05:11,520 --> 00:05:16,560 Speaker 1: So what we've done is we've interacted our forecasts with 85 00:05:17,040 --> 00:05:22,000 Speaker 1: the classifications of different societies by Freedom House, and Freedom 86 00:05:22,040 --> 00:05:26,800 Speaker 1: House classify societies into free so that's kind of a 87 00:05:26,839 --> 00:05:31,640 Speaker 1: functioning democracy, partly free, so that's the society which has 88 00:05:31,960 --> 00:05:37,120 Speaker 1: some democratic um aspect, but you wouldn't characterize it as 89 00:05:37,160 --> 00:05:41,160 Speaker 1: a fully functioning economy and not free so that's single 90 00:05:41,240 --> 00:05:45,560 Speaker 1: party states. Um and So when we interact our forecasts 91 00:05:45,720 --> 00:05:50,240 Speaker 1: with those social classifications, what we see is that the 92 00:05:50,360 --> 00:05:54,600 Speaker 1: share of the global economy, which is which is controlled 93 00:05:54,640 --> 00:05:59,680 Speaker 1: by free democracies is going to shrink from around eighties 94 00:05:59,680 --> 00:06:06,000 Speaker 1: six percent in two thousand two around six and the 95 00:06:06,040 --> 00:06:10,080 Speaker 1: share which is controlled by partly free and not free 96 00:06:10,360 --> 00:06:14,240 Speaker 1: societies is going to rise all the way up from 97 00:06:14,279 --> 00:06:18,760 Speaker 1: about four to about so a huge shift in the 98 00:06:18,800 --> 00:06:22,280 Speaker 1: sort of the geographical composition of the global economy, the 99 00:06:22,360 --> 00:06:25,240 Speaker 1: sort of the share of the global economy that's classified 100 00:06:25,279 --> 00:06:29,640 Speaker 1: as free market versus state interventionist, but also that political 101 00:06:29,720 --> 00:06:33,400 Speaker 1: shift as well, a much larger share of global output 102 00:06:33,720 --> 00:06:37,640 Speaker 1: is going to be coming from non democratic states, and 103 00:06:37,680 --> 00:06:40,040 Speaker 1: you've spent a lot of time in China, I mean, 104 00:06:40,080 --> 00:06:42,600 Speaker 1: it is quite I wonder whether you think that the 105 00:06:42,640 --> 00:06:46,880 Speaker 1: way that China has responded to the COVID thread could 106 00:06:46,920 --> 00:06:51,920 Speaker 1: make even these projections turn out to be an underestimate 107 00:06:52,320 --> 00:06:55,919 Speaker 1: of China's what China's standing is going to be in 108 00:06:55,960 --> 00:06:58,440 Speaker 1: a few years time. I mean, many people think they 109 00:06:58,480 --> 00:07:01,400 Speaker 1: have vaulted several years a head of the of the 110 00:07:01,440 --> 00:07:05,560 Speaker 1: West by being able to manage this crisis so effectively 111 00:07:05,560 --> 00:07:09,160 Speaker 1: at a time when particularly the US and Britain was 112 00:07:09,200 --> 00:07:12,640 Speaker 1: really floundering. Right So, so one of the things that 113 00:07:12,680 --> 00:07:17,040 Speaker 1: could throw these projections off are a major crisis, right um, 114 00:07:17,120 --> 00:07:19,480 Speaker 1: and a lot of people look at China and they 115 00:07:19,520 --> 00:07:22,840 Speaker 1: think there's a big financial crisis coming down the road 116 00:07:23,200 --> 00:07:26,640 Speaker 1: because China's taken on so much debt, and if that happens, 117 00:07:26,840 --> 00:07:29,760 Speaker 1: clearly it would put a dent in China's growth trajectory. 118 00:07:30,680 --> 00:07:33,240 Speaker 1: What we've seen in though, as you know, is this 119 00:07:33,440 --> 00:07:39,440 Speaker 1: global pandemic catastrophic impact across major economies, but China has 120 00:07:39,520 --> 00:07:41,560 Speaker 1: really come out of it first and come out of 121 00:07:41,600 --> 00:07:45,080 Speaker 1: it fastest. So our forecast is for two percent growth 122 00:07:45,080 --> 00:07:47,480 Speaker 1: in China this year. We think they'll come back to 123 00:07:47,560 --> 00:07:51,400 Speaker 1: eight percent growth next year. No other major economy is 124 00:07:51,440 --> 00:07:55,040 Speaker 1: going to do so well. So ironically, even though the 125 00:07:55,080 --> 00:07:59,280 Speaker 1: COVID crisis started in China, when we come out of it, 126 00:07:59,280 --> 00:08:03,120 Speaker 1: it could well be that China has accelerated that process 127 00:08:03,160 --> 00:08:06,240 Speaker 1: of narrowing the gap with the United States. Now. One 128 00:08:06,480 --> 00:08:09,640 Speaker 1: view of at least part of what the Trump administration 129 00:08:09,640 --> 00:08:11,480 Speaker 1: has been doing the last few years, and we've reported 130 00:08:11,520 --> 00:08:14,720 Speaker 1: so much on this podcast, is he was trying to 131 00:08:14,760 --> 00:08:20,120 Speaker 1: fight the kind of arithmetic and dynamic that you've just outlined. 132 00:08:20,160 --> 00:08:23,000 Speaker 1: He was trying to make sure that the US didn't 133 00:08:23,000 --> 00:08:25,560 Speaker 1: fall behind in terms of its share of global economy, 134 00:08:25,560 --> 00:08:28,000 Speaker 1: and quite the same way that you've described. I mean, 135 00:08:28,080 --> 00:08:30,720 Speaker 1: is there anything that the so called West, the US 136 00:08:30,920 --> 00:08:36,679 Speaker 1: and Western Europe can do to change the outcome in 137 00:08:36,679 --> 00:08:40,560 Speaker 1: in a sort of serious way. Yeah. So there's there's 138 00:08:40,559 --> 00:08:43,720 Speaker 1: a phrase which you often see in Chinese policy documents, 139 00:08:44,440 --> 00:08:49,360 Speaker 1: ban hoard um. It's roughly translates as do your own 140 00:08:49,480 --> 00:08:52,760 Speaker 1: work well. Right, the last four years have really been 141 00:08:52,760 --> 00:08:56,840 Speaker 1: a period where the US has focused on attacking China. Right, 142 00:08:56,920 --> 00:09:00,160 Speaker 1: let's put tariffs up let's make it harder to old 143 00:09:00,160 --> 00:09:03,920 Speaker 1: technologies to China. Let's try and break up big Chinese 144 00:09:04,160 --> 00:09:08,760 Speaker 1: internet companies. There hasn't been a lot of investment in 145 00:09:08,920 --> 00:09:12,679 Speaker 1: US education, a lot of investment in US infrastructure, a 146 00:09:12,679 --> 00:09:16,360 Speaker 1: lot of investment in US research and development. Now, if 147 00:09:16,400 --> 00:09:19,280 Speaker 1: the US wants to do its own work well and 148 00:09:19,360 --> 00:09:22,719 Speaker 1: accelerate great at home, then I think a sort of 149 00:09:22,720 --> 00:09:26,400 Speaker 1: a smart strategy would be to continue that advocacy for 150 00:09:26,440 --> 00:09:29,960 Speaker 1: sort of a level playing field free markets globally, but 151 00:09:30,160 --> 00:09:34,120 Speaker 1: also make those investments which drive growth potential at home 152 00:09:34,160 --> 00:09:36,760 Speaker 1: as well. It's almost a shame that we haven't got 153 00:09:36,800 --> 00:09:40,640 Speaker 1: President Trump doing his next summit with the Chinese leader 154 00:09:40,679 --> 00:09:42,800 Speaker 1: to be told do your own work well. I think 155 00:09:42,800 --> 00:09:45,199 Speaker 1: that would go down extremely well. We should just touch 156 00:09:45,280 --> 00:09:48,760 Speaker 1: on the other piece of this research, which was looking 157 00:09:48,800 --> 00:09:52,160 Speaker 1: at the impact over a thirty year timeframe of ath 158 00:09:52,360 --> 00:09:56,120 Speaker 1: of less globalization, or indeed a reversal of globalization. There's 159 00:09:56,120 --> 00:09:58,200 Speaker 1: been so much talk about that in the wake of 160 00:09:58,240 --> 00:10:03,800 Speaker 1: the both Donald Trump trade policies but also the COVID pandemic. 161 00:10:04,559 --> 00:10:06,640 Speaker 1: What what did you find there and what were you 162 00:10:06,640 --> 00:10:11,079 Speaker 1: looking at? So um, it's not just US China relations 163 00:10:11,120 --> 00:10:15,360 Speaker 1: which are breaking down right. We have Brexit, the UK 164 00:10:15,679 --> 00:10:19,960 Speaker 1: stepping away from its trade relationship with the European Union. UM, 165 00:10:19,960 --> 00:10:24,560 Speaker 1: we have covid Era concern about control of supply chains. 166 00:10:25,840 --> 00:10:28,560 Speaker 1: Countries which in the first half of this year could 167 00:10:28,600 --> 00:10:32,360 Speaker 1: make their own masks and make their own antibiotics and 168 00:10:32,400 --> 00:10:35,439 Speaker 1: make their own ventilators were in a better position that 169 00:10:35,640 --> 00:10:39,719 Speaker 1: countries than countries which were sourcing those from overseas. So 170 00:10:40,559 --> 00:10:44,160 Speaker 1: there's a kind of there's a global trend towards um 171 00:10:44,320 --> 00:10:49,760 Speaker 1: deglobalization that is potentially a very serious problem for global growth. 172 00:10:50,520 --> 00:10:53,679 Speaker 1: A world where global trade and technology and financial ties 173 00:10:53,720 --> 00:10:58,160 Speaker 1: start to splinter is going to be a smaller world 174 00:10:58,559 --> 00:11:01,840 Speaker 1: than a world where they continue you to strengthen, and 175 00:11:01,880 --> 00:11:07,160 Speaker 1: it also has distributional consequences. Globalization is good for all countries, 176 00:11:07,400 --> 00:11:11,560 Speaker 1: but it's especially good for emerging markets, which are aiming 177 00:11:11,600 --> 00:11:15,680 Speaker 1: to export their way to prosperity and catch up rapidly 178 00:11:15,760 --> 00:11:20,160 Speaker 1: to the global technology frontier. So we explored a couple 179 00:11:20,160 --> 00:11:24,520 Speaker 1: of scenarios, one where global ties continue to strengthen, and 180 00:11:24,640 --> 00:11:28,720 Speaker 1: one where global ties splinter, back to the level in 181 00:11:28,760 --> 00:11:32,600 Speaker 1: two thousand, just before China joined the w t O, 182 00:11:33,040 --> 00:11:38,920 Speaker 1: just as Europe was creating its single currency. The consequences 183 00:11:38,920 --> 00:11:41,600 Speaker 1: of that for the consert The difference between those two 184 00:11:41,600 --> 00:11:46,280 Speaker 1: scenarios for global growth is really enormous. The negative impact 185 00:11:46,440 --> 00:11:50,760 Speaker 1: of deglobalization is much more severe for those emerging markets, 186 00:11:50,920 --> 00:11:53,880 Speaker 1: places like China, places like Vietnam. And I was going 187 00:11:53,880 --> 00:11:56,000 Speaker 1: to ask you that, So, who are the biggest losers? 188 00:11:56,679 --> 00:11:58,920 Speaker 1: Are those countries? I guess who would have otherwise have 189 00:11:59,080 --> 00:12:03,160 Speaker 1: done the best on the integration scenario. Yeah, it's the 190 00:12:03,280 --> 00:12:06,400 Speaker 1: it's your it's your Asian it's the Asian emerging markets. 191 00:12:06,400 --> 00:12:10,920 Speaker 1: It's China, it's Vietnam. A bit further up the development spectrum, 192 00:12:10,920 --> 00:12:14,040 Speaker 1: it's Korea. It's the countries that have done the best 193 00:12:14,280 --> 00:12:20,280 Speaker 1: from gaining global export market share and absorbing foreign technologies. 194 00:12:20,679 --> 00:12:23,720 Speaker 1: They're the biggest winners from globalization. They'd be the biggest 195 00:12:23,760 --> 00:12:28,400 Speaker 1: losers if globalization now spins into reverse. Tom Warlick, thank 196 00:12:28,440 --> 00:12:36,000 Speaker 1: you very much. Great to be in, Stephanie. Well, we're 197 00:12:36,000 --> 00:12:39,320 Speaker 1: not assuming that globalization will go into reverse. But the 198 00:12:39,360 --> 00:12:42,680 Speaker 1: COVID crisis has given young people in Asia a taste 199 00:12:42,679 --> 00:12:45,600 Speaker 1: of a world in which all the economic opportunities have 200 00:12:45,720 --> 00:12:50,280 Speaker 1: suddenly dried up. They're calling it the lockdown generation. Bloomberg's 201 00:12:50,320 --> 00:12:56,720 Speaker 1: and the current has more here in Hong Kong. While 202 00:12:56,760 --> 00:13:00,640 Speaker 1: the pandemic is under control, the economy remains in recession. 203 00:13:01,200 --> 00:13:04,840 Speaker 1: Unemployment is that a fifteen year high, and youth unemployment 204 00:13:04,880 --> 00:13:09,000 Speaker 1: has surged during the crisis. Of course, the story of 205 00:13:09,080 --> 00:13:12,960 Speaker 1: youth unemployment is playing out across the Asia region, a 206 00:13:13,080 --> 00:13:15,959 Speaker 1: part of the world that is home to a majority 207 00:13:16,000 --> 00:13:19,680 Speaker 1: of those aged fifteen to twenty four. It's why the 208 00:13:19,760 --> 00:13:24,360 Speaker 1: Asian Development Bank and International Labor Organization are warning of 209 00:13:24,400 --> 00:13:28,360 Speaker 1: a lockdown generation. We reached out to young people and 210 00:13:28,559 --> 00:13:32,120 Speaker 1: experts across the region to gauge how deep this job's 211 00:13:32,160 --> 00:13:37,360 Speaker 1: crisis is. Vincent Laud, aged twenty, is among those in 212 00:13:37,600 --> 00:13:40,760 Speaker 1: Hong Kong who's unemployed and looking for work, in his case, 213 00:13:41,040 --> 00:13:44,240 Speaker 1: possibly as a waiter. It's very hard to find you all. 214 00:13:44,440 --> 00:13:48,559 Speaker 1: Now when Padelica comes in, a lot of a lot 215 00:13:48,600 --> 00:13:52,800 Speaker 1: of comedies start to firing the employee. I kind of 216 00:13:52,800 --> 00:13:55,360 Speaker 1: afraid of unlocking any job you guys, I don't think 217 00:13:55,360 --> 00:13:58,760 Speaker 1: they got hired too much people. Yeah, I'm not expecting 218 00:13:58,840 --> 00:14:04,120 Speaker 1: to a job player soon. I spoke with Felix Weibenkoff 219 00:14:04,240 --> 00:14:07,760 Speaker 1: of the International Labor Organization, who is based in Bangkok. 220 00:14:08,280 --> 00:14:11,120 Speaker 1: So the COVID nineteen pandemic has led to a massive 221 00:14:11,160 --> 00:14:15,080 Speaker 1: disruption to the economies and labor markets in in Asia Pacific, 222 00:14:15,160 --> 00:14:19,080 Speaker 1: and we found that they have disproportionate impacts on unused employment, 223 00:14:19,400 --> 00:14:23,960 Speaker 1: now threatening to create a lockdown generation. The regions fast 224 00:14:23,960 --> 00:14:27,440 Speaker 1: growing economies for decades have offered millions of young people 225 00:14:27,760 --> 00:14:30,880 Speaker 1: the chance to do better than their parents, a path 226 00:14:31,000 --> 00:14:35,080 Speaker 1: to upward mobility now at risk as youth unemployment source. 227 00:14:35,800 --> 00:14:38,760 Speaker 1: Young people are losing jobs at a faster rate than 228 00:14:38,840 --> 00:14:42,040 Speaker 1: older generations because almost half are clustered in the four 229 00:14:42,080 --> 00:14:46,640 Speaker 1: economic sectors hurt most by the COVID nineteen pandemic wholesale 230 00:14:46,640 --> 00:14:51,480 Speaker 1: and retail, manufacturing, business services, and accommodation and food. Young 231 00:14:51,520 --> 00:14:54,720 Speaker 1: women and the poorest are hardest hit, and there are 232 00:14:54,760 --> 00:14:58,480 Speaker 1: several underlying factors why used in Asia Pacific are particularly 233 00:14:58,560 --> 00:15:01,800 Speaker 1: vulnerable as and the Pacific region is home to the 234 00:15:01,840 --> 00:15:05,600 Speaker 1: majority of the world's young people aged fifteen to twenty four, 235 00:15:06,000 --> 00:15:09,080 Speaker 1: and as such their contribution is is key to the 236 00:15:09,240 --> 00:15:18,320 Speaker 1: region's productivity and also inclusive development. Panic super Plan is 237 00:15:18,360 --> 00:15:21,000 Speaker 1: a twenty year old from Bangkok who wanted to turn 238 00:15:21,080 --> 00:15:25,440 Speaker 1: his love of aviation into a career by studying aerospace engineering. 239 00:15:26,320 --> 00:15:29,520 Speaker 1: Those plans are now far from certain after COVID halted 240 00:15:29,640 --> 00:15:32,960 Speaker 1: much of global air travel. That the pandemic just like 241 00:15:33,400 --> 00:15:37,000 Speaker 1: change everything that I have thought about my career because 242 00:15:37,280 --> 00:15:40,480 Speaker 1: aviation was supposed to be one of those industry that 243 00:15:40,640 --> 00:15:45,320 Speaker 1: was going substantially before COVID, and I thought that Thailand 244 00:15:45,400 --> 00:15:47,680 Speaker 1: is kind of like the central hub of Asia, so 245 00:15:47,840 --> 00:15:49,760 Speaker 1: I figured it might be good if I pursued this 246 00:15:49,960 --> 00:15:53,720 Speaker 1: career path. While Panas is hopeful that the aviation sector 247 00:15:53,840 --> 00:15:56,400 Speaker 1: eventually gets back in the air, he's also looking at 248 00:15:56,440 --> 00:16:00,160 Speaker 1: his options if aviation was not possible. I have so 249 00:16:00,640 --> 00:16:04,600 Speaker 1: considered other fields of engineering, like the energy field, which 250 00:16:04,640 --> 00:16:08,080 Speaker 1: I already sent some applications to. So this is my 251 00:16:08,160 --> 00:16:12,160 Speaker 1: alternative plan right now. The impact goes beyond headline rates 252 00:16:12,160 --> 00:16:16,200 Speaker 1: of unemployment. Professor way John gene Young, founding director of 253 00:16:16,240 --> 00:16:19,920 Speaker 1: the Center for Family and Population Research at the National 254 00:16:20,000 --> 00:16:23,400 Speaker 1: University of Singapore, warned that this crisis will strain relations 255 00:16:23,400 --> 00:16:27,000 Speaker 1: with older generations. It puts young people's mental health at 256 00:16:27,120 --> 00:16:29,680 Speaker 1: risk and is shaping up to be worse than previous 257 00:16:29,800 --> 00:16:35,240 Speaker 1: jobs crisis. And it's not just use unemployment. There's the underemployment, 258 00:16:35,760 --> 00:16:39,920 Speaker 1: people who cannot find jobs, set up for something less 259 00:16:40,280 --> 00:16:45,800 Speaker 1: well paid and work fewer hours. There's also people who 260 00:16:45,920 --> 00:16:50,680 Speaker 1: get discouraged of looking for jobs that becomes I don't. 261 00:16:51,120 --> 00:16:55,680 Speaker 1: So there are various ways that this pandemic is making 262 00:16:55,840 --> 00:17:02,440 Speaker 1: the impact of economic recession much worse than young people. Uh, 263 00:17:02,480 --> 00:17:04,960 Speaker 1: you know, in a way that's much worse than any 264 00:17:04,960 --> 00:17:09,800 Speaker 1: other UH age groups. She highlights the impact on younger women, 265 00:17:10,000 --> 00:17:13,640 Speaker 1: especially who are forcing to unpaid labor at home as 266 00:17:13,680 --> 00:17:16,520 Speaker 1: they fall out of the workforce. You know, a woman, 267 00:17:16,680 --> 00:17:21,080 Speaker 1: this is particularly hard. Uh. Many of them would just 268 00:17:22,000 --> 00:17:27,640 Speaker 1: become um someone in the statistics that are not in employment, 269 00:17:28,280 --> 00:17:32,639 Speaker 1: education or training because of the labor market, but also 270 00:17:32,760 --> 00:17:44,000 Speaker 1: because of unpaid work demand at home. Even in China, 271 00:17:44,040 --> 00:17:47,479 Speaker 1: where the economic recovery is most advanced, the government has 272 00:17:47,520 --> 00:17:50,760 Speaker 1: warned that the jobless rate among young workers remains high. 273 00:17:51,600 --> 00:17:54,760 Speaker 1: In Japan, companies are cutting back on hiring and the 274 00:17:54,840 --> 00:17:57,720 Speaker 1: new graduates are losing their chance for long term employment. 275 00:17:58,880 --> 00:18:02,320 Speaker 1: Julia Re simply completed her internship at a big tech 276 00:18:02,359 --> 00:18:05,399 Speaker 1: company in Beijing, and there's now in Japan or she 277 00:18:05,480 --> 00:18:09,600 Speaker 1: plans to finish her post graduate studies. She's hoping for 278 00:18:09,640 --> 00:18:12,520 Speaker 1: a job in media or digital content at some of 279 00:18:12,640 --> 00:18:16,359 Speaker 1: Chinese technology joints, but she's already noticed that there are 280 00:18:16,440 --> 00:18:20,000 Speaker 1: fewer roles on offer. When she first graduated in two 281 00:18:20,000 --> 00:18:25,040 Speaker 1: thousand nineteen, jobs were plentiful compared with right now. I 282 00:18:25,080 --> 00:18:32,119 Speaker 1: think the competition is much fiercer than before because there 283 00:18:32,160 --> 00:18:36,080 Speaker 1: are so many graduates who should have fand a job 284 00:18:36,080 --> 00:18:40,320 Speaker 1: in twenty but didn't. Before the start of my job hunting, 285 00:18:40,720 --> 00:18:46,680 Speaker 1: I planned to apply for some potations in some internet companies. 286 00:18:47,080 --> 00:18:50,680 Speaker 1: UH this year, I found that this kind of job 287 00:18:51,520 --> 00:18:55,640 Speaker 1: not available anymore. The COVID nineteen shock is creating a 288 00:18:55,680 --> 00:18:59,080 Speaker 1: class of new poor across East Asia and the Pacific 289 00:18:59,720 --> 00:19:03,040 Speaker 1: Core into the World Bank, thirty eight million more people 290 00:19:03,119 --> 00:19:08,040 Speaker 1: will be living in poverty. In to counter long term scaring, 291 00:19:08,440 --> 00:19:11,280 Speaker 1: why didn't have at the isle O says, governments need 292 00:19:11,320 --> 00:19:15,240 Speaker 1: to pour money into education and skill training. The pathway 293 00:19:15,280 --> 00:19:17,359 Speaker 1: is that a lot of young people might have taken 294 00:19:17,800 --> 00:19:20,480 Speaker 1: when in Asia Pacific when they entered the labor market 295 00:19:21,080 --> 00:19:23,080 Speaker 1: that is now being disruptive was that used to be 296 00:19:23,119 --> 00:19:26,800 Speaker 1: insectors that are now most impacted, such as the wholesale 297 00:19:26,800 --> 00:19:32,240 Speaker 1: and retail trade and manufacturing. Governments need to adopt and 298 00:19:32,240 --> 00:19:35,680 Speaker 1: and implement immediate, large scale and and targeted measures to 299 00:19:35,720 --> 00:19:40,480 Speaker 1: stimulate economy and use employment. Essentially, that has to do 300 00:19:40,560 --> 00:19:43,760 Speaker 1: with the fact that it is now critical to prioritize 301 00:19:43,760 --> 00:19:46,720 Speaker 1: youth employment if if you want the region to come 302 00:19:46,760 --> 00:19:52,360 Speaker 1: out with more inclusive and sustainable growth. And the concern 303 00:19:52,440 --> 00:19:55,360 Speaker 1: we have this stage is that this will have long 304 00:19:55,440 --> 00:19:58,280 Speaker 1: lasting impacts and the current crisis on the labor market 305 00:19:58,320 --> 00:20:01,120 Speaker 1: outcomes of youth in the each And we know from 306 00:20:01,320 --> 00:20:04,840 Speaker 1: um the previous financial crisis in Asia and the Pacific 307 00:20:05,240 --> 00:20:09,080 Speaker 1: that they use unemployment rate never recovered to pre global 308 00:20:09,440 --> 00:20:14,000 Speaker 1: financial crisis level of of two thousand and and seven. 309 00:20:14,560 --> 00:20:18,080 Speaker 1: What is different now is the crisis due to COVID 310 00:20:18,160 --> 00:20:21,879 Speaker 1: nineteen is much more widespread on both the labor demand 311 00:20:21,920 --> 00:20:25,359 Speaker 1: and supply side. When I intervide young people for this podcast, 312 00:20:25,720 --> 00:20:28,800 Speaker 1: I was struked by their optimism that this crisis will 313 00:20:28,840 --> 00:20:33,240 Speaker 1: pass eventually. Money like planets per plan say that they 314 00:20:33,240 --> 00:20:36,159 Speaker 1: want to be ready to embrace whatever opportunities comes along. 315 00:20:36,880 --> 00:20:39,920 Speaker 1: It's a hopeful note in an uncertain time. The plan 316 00:20:40,040 --> 00:20:44,200 Speaker 1: for me is always learning final opportunities and never limit yourself. 317 00:20:44,840 --> 00:20:48,920 Speaker 1: Maybe the plan I thought about the energy like renewable 318 00:20:49,000 --> 00:20:53,159 Speaker 1: energy might not work for the next month, next year's whatever. 319 00:20:53,560 --> 00:20:57,320 Speaker 1: But I am always learning. I am always trying to 320 00:20:57,359 --> 00:21:01,440 Speaker 1: find new opportunities. If you can say that you can 321 00:21:01,440 --> 00:21:03,960 Speaker 1: do that, I think there's nothing to be scared off 322 00:21:05,720 --> 00:21:21,199 Speaker 1: for Bloomberg News. I'm and the current mm I mentioned 323 00:21:21,240 --> 00:21:23,960 Speaker 1: that our Eurozone economist may have a Kuza, who has 324 00:21:24,000 --> 00:21:27,520 Speaker 1: been on the podcast a few times, had contributed a 325 00:21:27,600 --> 00:21:31,960 Speaker 1: climate piece to this special New Economy Forum report. She 326 00:21:32,119 --> 00:21:36,040 Speaker 1: worked with the chief Emire economist Jamie Rush on this project. 327 00:21:36,119 --> 00:21:38,760 Speaker 1: But maybe tell me briefly what you did and some 328 00:21:38,880 --> 00:21:43,080 Speaker 1: of the broad brush conclusions. Yes. Thanks, So we've looked 329 00:21:43,119 --> 00:21:46,240 Speaker 1: at the cust of climate change, not just the physical 330 00:21:46,320 --> 00:21:49,160 Speaker 1: cost of climate change, but also the coust of transitioning 331 00:21:49,280 --> 00:21:52,400 Speaker 1: to a low carbon economy to a very those physical 332 00:21:52,480 --> 00:21:55,840 Speaker 1: cross from climate change, and so we've used so scenarios 333 00:21:55,840 --> 00:21:59,360 Speaker 1: developed the base the n JFS and network of Central 334 00:21:59,359 --> 00:22:02,800 Speaker 1: banks for being the financial sector, and we've focused on 335 00:22:02,960 --> 00:22:06,280 Speaker 1: three main scenarios. One is to do nothing scenario. It's 336 00:22:06,320 --> 00:22:10,320 Speaker 1: a hot planet scenario. It's a case where UM policies 337 00:22:10,440 --> 00:22:13,640 Speaker 1: simply continuous they are now no more and that would 338 00:22:13,680 --> 00:22:17,679 Speaker 1: mean in temperatureizing to about probably two degrees above pre 339 00:22:17,800 --> 00:22:22,040 Speaker 1: industrial times by twenty fifty and four degrees based with 340 00:22:22,119 --> 00:22:25,320 Speaker 1: than one and tread. And then there are two transition 341 00:22:25,400 --> 00:22:28,200 Speaker 1: scenarios along the lines of the Paris Agreements, so to 342 00:22:28,280 --> 00:22:32,240 Speaker 1: capt temperature at two degrees celsius um and that with 343 00:22:32,480 --> 00:22:35,680 Speaker 1: one olderly scenario that starts now and it's gradual and 344 00:22:35,840 --> 00:22:39,439 Speaker 1: it's times for the technology to mature, and when disorderly 345 00:22:39,480 --> 00:22:44,080 Speaker 1: scenario which is delayed until twenty thirty. And then we 346 00:22:44,760 --> 00:22:49,600 Speaker 1: looked at the different trajectories for different countries, which allowed 347 00:22:49,720 --> 00:22:54,120 Speaker 1: us to um estimate the costs for various countries rather 348 00:22:54,160 --> 00:22:57,520 Speaker 1: than just global. There's lots here and it's hard to 349 00:22:57,560 --> 00:23:00,560 Speaker 1: go into the into the details of the lots of 350 00:23:00,880 --> 00:23:03,560 Speaker 1: people knit picking at it. I did notice one big 351 00:23:03,600 --> 00:23:06,400 Speaker 1: thing which is obviously also quite worrying when you think 352 00:23:06,440 --> 00:23:09,600 Speaker 1: about the political economy of this is some of the 353 00:23:09,600 --> 00:23:12,080 Speaker 1: biggest economy is the ones that we look to now 354 00:23:12,160 --> 00:23:14,159 Speaker 1: and we know we're going to be really important for 355 00:23:14,200 --> 00:23:18,439 Speaker 1: this effort are ones that will not benefit from the 356 00:23:18,560 --> 00:23:21,520 Speaker 1: mitigation efforts for quite a long time. So you've got 357 00:23:21,560 --> 00:23:23,879 Speaker 1: them having to spend quite a lot of money or 358 00:23:23,920 --> 00:23:28,320 Speaker 1: at least sacrifice a certain amount of growth. For some 359 00:23:28,440 --> 00:23:31,560 Speaker 1: period before they get to see the benefits of that 360 00:23:31,720 --> 00:23:34,760 Speaker 1: of that cooler planet. Yes, that's right. I mean the 361 00:23:34,800 --> 00:23:36,760 Speaker 1: problem is that the cust of claim a change of 362 00:23:36,800 --> 00:23:41,640 Speaker 1: physical crist the conquest from hotter temperatures are are quite 363 00:23:41,720 --> 00:23:44,680 Speaker 1: slow moving and it's difficult to descend thing of them 364 00:23:44,680 --> 00:23:47,879 Speaker 1: to really notice them, and they become more and more important. 365 00:23:48,000 --> 00:23:51,440 Speaker 1: But according to these scenarios, they did already quest test 366 00:23:51,480 --> 00:23:54,399 Speaker 1: about one percent of GDPs of today, so even the 367 00:23:54,480 --> 00:23:57,480 Speaker 1: world was not so hot already, we would be maybe 368 00:23:57,520 --> 00:24:00,560 Speaker 1: a one percent how your GDP, and then by twenty 369 00:24:00,600 --> 00:24:05,040 Speaker 1: fifties estimate around three percent extract supercent extractors, so cost 370 00:24:05,040 --> 00:24:07,760 Speaker 1: of three percent in total and then ten percent by 371 00:24:07,800 --> 00:24:12,080 Speaker 1: twenty one dread. But these are central causes, are chronickers. 372 00:24:12,119 --> 00:24:14,280 Speaker 1: There are of course a lot of uncertainty. It could 373 00:24:14,280 --> 00:24:17,399 Speaker 1: be um in the In these estimates they go up 374 00:24:17,400 --> 00:24:19,800 Speaker 1: to maybe twenty five percent cost by to son and 375 00:24:19,880 --> 00:24:23,080 Speaker 1: one dread. So there's this big uncertainty on the cost 376 00:24:23,600 --> 00:24:26,840 Speaker 1: of claimate change and the fact that they are gradually 377 00:24:26,880 --> 00:24:29,280 Speaker 1: increasing and maybe they will building being point where they 378 00:24:29,359 --> 00:24:34,119 Speaker 1: start increasing even faster the cost of transition or or 379 00:24:34,200 --> 00:24:37,640 Speaker 1: more um front cloded. So a lot of the transition 380 00:24:37,680 --> 00:24:40,240 Speaker 1: costs would happen at the start of the transition. Even 381 00:24:40,320 --> 00:24:43,399 Speaker 1: in the orderly transition, they would be around two percent 382 00:24:43,480 --> 00:24:46,679 Speaker 1: by twenty fifty estimated, and then they would go up 383 00:24:46,800 --> 00:24:49,600 Speaker 1: to maybe three four percent by than one dread. So 384 00:24:49,680 --> 00:24:52,320 Speaker 1: they are very much frontlodied. And what happens is that 385 00:24:52,840 --> 00:24:55,960 Speaker 1: the focus being on the next thirty years, it looks 386 00:24:56,240 --> 00:25:00,400 Speaker 1: cheaper globally to do nothing than to start the position. 387 00:25:00,720 --> 00:25:03,640 Speaker 1: But of course an one hundred and so it means 388 00:25:03,720 --> 00:25:09,040 Speaker 1: that probably it quite given where it becomes more expensive, 389 00:25:09,240 --> 00:25:12,440 Speaker 1: more cheaper to do something than do nothing is around 390 00:25:12,480 --> 00:25:14,720 Speaker 1: to than D sixty nine, which is already quite late 391 00:25:15,240 --> 00:25:18,200 Speaker 1: in terms of global GDP two day. But then if 392 00:25:18,240 --> 00:25:20,399 Speaker 1: you if you look at the U S or the U, 393 00:25:20,920 --> 00:25:24,280 Speaker 1: it's more like to to than a ninety to extand 394 00:25:24,280 --> 00:25:28,879 Speaker 1: and one hundred um. So it's short for short stated policymakers, 395 00:25:28,960 --> 00:25:30,800 Speaker 1: and you don't have to be I mean even quite 396 00:25:30,840 --> 00:25:34,159 Speaker 1: long sighted. Once we're talking about seventy years ahead, and 397 00:25:34,320 --> 00:25:36,840 Speaker 1: that's that's a big challenge. If there was a central planner, 398 00:25:37,000 --> 00:25:40,080 Speaker 1: we would probably be uh. I think we would have 399 00:25:40,160 --> 00:25:44,320 Speaker 1: started quite a long time ago acty. But but in 400 00:25:44,440 --> 00:25:48,440 Speaker 1: those current circumstances, the coordination is a key challenge. But 401 00:25:48,640 --> 00:25:51,240 Speaker 1: to be clear, it's not saying that it would only 402 00:25:51,359 --> 00:25:54,119 Speaker 1: makes sense to do something in two seventy. It's just 403 00:25:54,240 --> 00:25:57,000 Speaker 1: that it won't be It won't be evident you will 404 00:25:57,000 --> 00:25:59,760 Speaker 1: be able to say right now that the costs are 405 00:26:00,240 --> 00:26:04,520 Speaker 1: less than the benefits until the final thing I noticed 406 00:26:04,680 --> 00:26:08,639 Speaker 1: in this research labor which I think would worry some 407 00:26:08,840 --> 00:26:11,680 Speaker 1: incoming members of the Biden administrations who have put the 408 00:26:11,800 --> 00:26:14,320 Speaker 1: climate high on their they've named it as one of 409 00:26:14,359 --> 00:26:18,480 Speaker 1: their four priorities, is that you you show that if 410 00:26:18,880 --> 00:26:22,800 Speaker 1: the more aggressive the US is in embracing the climate agenda, 411 00:26:23,560 --> 00:26:26,919 Speaker 1: the quicker it will be before China overtakes the US. 412 00:26:27,200 --> 00:26:30,480 Speaker 1: So it sounds like Donald Trump was right. So in 413 00:26:30,560 --> 00:26:33,240 Speaker 1: a way, that's high because the more discriptive costs of 414 00:26:33,320 --> 00:26:36,360 Speaker 1: climate change, or the discriptive class costs of a disorderly 415 00:26:36,440 --> 00:26:38,800 Speaker 1: transition will be fent more in some parts of the 416 00:26:38,880 --> 00:26:42,600 Speaker 1: world and less generally in advanced economies. Is there because 417 00:26:42,600 --> 00:26:47,000 Speaker 1: they are less reliant fuels, or they have better capacities 418 00:26:47,280 --> 00:26:52,320 Speaker 1: of adjusting um tailor as quite a lot of very 419 00:26:52,720 --> 00:26:56,480 Speaker 1: a lot of the productivities in very urban areas where 420 00:26:56,960 --> 00:27:00,240 Speaker 1: the cost of climate change from floods from very rain 421 00:27:00,440 --> 00:27:03,200 Speaker 1: in particular could be quite high, so that makes them 422 00:27:03,280 --> 00:27:06,040 Speaker 1: quite sensitive. As the estimates we have at the moment 423 00:27:06,280 --> 00:27:09,760 Speaker 1: is four percent course by twenty fifty for for for 424 00:27:09,920 --> 00:27:11,960 Speaker 1: chain now where it's less than I think it's probably 425 00:27:12,000 --> 00:27:14,919 Speaker 1: less than one percent for the US and most advant economies. 426 00:27:15,560 --> 00:27:20,919 Speaker 1: So that's right, that the genuinely emerging economies would benefit 427 00:27:21,119 --> 00:27:26,240 Speaker 1: more from from from from America's efforts from yeah, from 428 00:27:26,920 --> 00:27:31,240 Speaker 1: everybody's effort to to to move um to an orderly transition. 429 00:27:31,520 --> 00:27:35,920 Speaker 1: That's right. Well, much to think about, and let's hope 430 00:27:35,960 --> 00:27:39,320 Speaker 1: that the incoming Biden administration don't focus too much on 431 00:27:39,440 --> 00:27:42,480 Speaker 1: those long term scenarios. You get the impression that they're 432 00:27:42,480 --> 00:27:46,719 Speaker 1: trying to look they're looking past those kind of narrow assessments, 433 00:27:46,760 --> 00:27:49,480 Speaker 1: at least for now. Maybe because thank you very much, 434 00:27:49,640 --> 00:27:58,800 Speaker 1: thank you, thanks for listening to Stethonomics. We'll be back 435 00:27:58,920 --> 00:28:02,000 Speaker 1: next week with the bloom Burg New Economy Forum, where 436 00:28:02,040 --> 00:28:04,959 Speaker 1: I'll be discussing, among other things, the future of central 437 00:28:05,040 --> 00:28:08,840 Speaker 1: banking with a blockbuster panel of Larry Summer's, Janet Yellen 438 00:28:09,160 --> 00:28:13,320 Speaker 1: ragam Rajan and Lord Mervin King. In the meantime, remember 439 00:28:13,359 --> 00:28:15,800 Speaker 1: you can always find us on the Bloomberg Terminal, website, 440 00:28:15,880 --> 00:28:19,000 Speaker 1: app or wherever you get your podcasts. For more news 441 00:28:19,080 --> 00:28:23,240 Speaker 1: and analysis from Bloomberg Economics, follow as Economics on Twitter. 442 00:28:23,720 --> 00:28:26,800 Speaker 1: This episode was produced by Magnus Hendrickson, with special thanks 443 00:28:26,880 --> 00:28:31,080 Speaker 1: to Ender, current Mayor Kaza and tom Orlick. Lucy Meakin 444 00:28:31,280 --> 00:28:33,720 Speaker 1: is the executive producer of Stephanomics, and the head of 445 00:28:33,720 --> 00:28:36,240 Speaker 1: Bloomberg podcast is Francesco Levy.