WEBVTT - Bloomberg Businessweek Weekend - November 2nd, 2019 0:00:03.520 --> 0:00:07.480 This is Bloomberg Business Week from Bloomberg Radio. I'm Jason 0:00:07.560 --> 0:00:09.920 Kelly and I'm Carol Masser. Welcome to the Bloomberg Business 0:00:09.960 --> 0:00:12.360 Week Podcast. Over the next couple of hours, we're gonna 0:00:12.400 --> 0:00:14.320 bring you news of the week, insights from the magazine 0:00:14.320 --> 0:00:17.000 and more. And Jason, this is a very special issue. 0:00:17.079 --> 0:00:20.320 It's the New Economy Issue, and it's really looking at 0:00:20.680 --> 0:00:25.360 the drivers and the disruptors of the global economy. So 0:00:25.400 --> 0:00:28.000 it really just sets you into all of the trends 0:00:28.000 --> 0:00:29.800 and stories you need to know about. It's a primer 0:00:29.920 --> 0:00:33.640 for a big event coming up later on this month. 0:00:33.720 --> 0:00:36.600 It's the second annual New Economy Forum. It's going to 0:00:36.640 --> 0:00:40.320 be held in Beijing, a gathering of world leaders of 0:00:40.400 --> 0:00:45.680 business leaders really in the business of problem solving. So 0:00:45.720 --> 0:00:47.800 we have all of that to cover this week. Also, 0:00:47.880 --> 0:00:50.080 we have a couple of stories we've got to point out, 0:00:50.120 --> 0:00:52.879 including one on Christine Legarde. She takes the reins this 0:00:52.920 --> 0:00:55.080 week at the European Central Bank. We'll hear what that 0:00:55.120 --> 0:00:57.560 means for the Central Bank. She's going to be a 0:00:57.600 --> 0:01:01.000 different type of head. She brings different skills to that job. 0:01:01.120 --> 0:01:05.240 Exit Druggi Enter Leo Guard couldn't have two different people 0:01:05.360 --> 0:01:07.680 cast in this role in a lot of ways. Eager 0:01:07.680 --> 0:01:09.400 to see what she makes of this, and you bet 0:01:09.400 --> 0:01:12.960 address right, that's very good point. First up, though, we 0:01:13.000 --> 0:01:16.240 speak with the editor of the special issue, Christina Lynn Bled. 0:01:16.520 --> 0:01:19.560 She oversaw all of it really stitched together, what's happening 0:01:19.880 --> 0:01:23.360 in this new economy and how she put it all together. 0:01:23.720 --> 0:01:26.880 I think about this this issue all year long. It's 0:01:27.000 --> 0:01:29.679 it's a great repository of stories that we might not 0:01:29.760 --> 0:01:32.039 be able to do that the rest of the year 0:01:32.120 --> 0:01:34.680 because we have, you know, certain sections, and they don't 0:01:34.800 --> 0:01:37.200 some of these issues don't fit very well within those 0:01:37.240 --> 0:01:41.319 sections well. And speaking of repositories plastics, we're not talking 0:01:41.319 --> 0:01:44.120 about credit cards here. We're talking about actual plastic being 0:01:44.200 --> 0:01:46.959 used to pay for things. Wait what. The Plastic Bank 0:01:47.680 --> 0:01:52.320 is a project that started with this entrepreneur in Vancouver 0:01:52.520 --> 0:01:55.480 and the first one opened in Haiti, and we visited 0:01:55.520 --> 0:01:59.440 one in Bali and Indonesia that opened recently, and basically 0:01:59.480 --> 0:02:03.560 the idea is to make plastic worth something and that 0:02:03.760 --> 0:02:08.200 give people an incentive to not throw it out. So um. Basically, 0:02:08.960 --> 0:02:12.359 we talked to people there who you know, supplement their 0:02:12.400 --> 0:02:16.360 income by collecting plastic and redeeming it at the plastic bank. 0:02:16.480 --> 0:02:19.400 The plastic Bank had IBM built them a sort of 0:02:19.480 --> 0:02:24.080 like e wallet app that like people can use to 0:02:24.200 --> 0:02:28.120 track their income and their savings. They can also use those, 0:02:28.320 --> 0:02:30.960 uh those credits that they have and redeem them at 0:02:31.000 --> 0:02:35.160 certain stores. So for example, somebody can earn like seven 0:02:35.200 --> 0:02:38.040 dollars a month. That does not seem to sound like 0:02:38.080 --> 0:02:40.480 a lot in the United States, but Indonesia is a 0:02:40.480 --> 0:02:43.280 country where GDP per capital is only three thousand something 0:02:43.360 --> 0:02:45.680 dollars a year. How isn't it fascinating? Just kind of 0:02:45.680 --> 0:02:49.560 it sounds like such a simple solution to what's kind 0:02:49.600 --> 0:02:51.600 of a big problem, giving people kind of a financial 0:02:51.639 --> 0:02:54.680 identity as well as solving a pollution problem. That's right, 0:02:54.720 --> 0:02:56.760 because I mean the idea is also that they're almost 0:02:56.840 --> 0:03:01.280 like these countries have a huge number of unbanked people, 0:03:01.440 --> 0:03:03.840 and so this is basically training people in the idea 0:03:03.840 --> 0:03:06.480 of like what are savings? You know, like this, we 0:03:06.520 --> 0:03:07.959 could talk to one guy who used to say, I 0:03:08.040 --> 0:03:10.280 used to go out and spend all the money like 0:03:10.360 --> 0:03:12.440 I got because he used to go to our recycling 0:03:12.480 --> 0:03:16.520 center and redeem the plastic and just get paid, you know, 0:03:16.639 --> 0:03:18.960 right there. But now he sort of has an incentive 0:03:19.000 --> 0:03:21.600 to save it up. Another big story that is in 0:03:21.600 --> 0:03:23.800 the magazine and looking at it from a global perspective, 0:03:23.840 --> 0:03:26.839 is immigration. And what I love about this story there's 0:03:26.840 --> 0:03:30.079 been such a pushback against immigration by so many different 0:03:30.080 --> 0:03:32.520 countries around the world, and yet a lot of countries 0:03:32.600 --> 0:03:34.400 need it because they need workers. Well, this is a 0:03:34.440 --> 0:03:36.520 project that I desperately wanted to do, and this is 0:03:36.560 --> 0:03:38.640 an example of something that would have been sort of 0:03:38.800 --> 0:03:42.240 where do we address this? But I thought we have 0:03:42.320 --> 0:03:44.600 one of those sections of the issue's governance, and I thought, 0:03:44.840 --> 0:03:48.880 what is something that that needs really good policy? And 0:03:48.880 --> 0:03:51.400 it's sort of this movement of people which has become 0:03:51.440 --> 0:03:54.760 such a hot political issue, but it really it's it's 0:03:54.880 --> 0:03:58.800 imperative for certain economies to keep you know, to keep 0:03:58.840 --> 0:04:03.160 immigration alive as a as a you know, it's a necessity, right, 0:04:03.240 --> 0:04:05.760 So it's like, how do you make it work for you? 0:04:06.160 --> 0:04:08.880 So we looked at three different examples, and I think 0:04:09.040 --> 0:04:12.440 Canada is one of the most interesting because it has 0:04:12.480 --> 0:04:16.960 this system that takes in economic migrants, so not political 0:04:17.000 --> 0:04:19.359 asylum seekers or anything else. But so if you're applying 0:04:19.360 --> 0:04:23.480 as an economic migrant Canada, you're going to get scored 0:04:23.640 --> 0:04:28.920 on several criteria. One is your skills, your education, your 0:04:29.080 --> 0:04:33.320 past work, not performance. I'm sorry, you're you're like your resume, 0:04:33.360 --> 0:04:36.800 what kind of jobs you've had. Language, so the national 0:04:36.880 --> 0:04:40.200 languages of Canadas, of French and English, and that score 0:04:40.320 --> 0:04:43.360 is going to determine basically whether you're being you're going 0:04:43.400 --> 0:04:46.280 to be offered permanent residents. And other other countries are 0:04:46.279 --> 0:04:49.800 looking at this program, right, So New Zealand and Australia 0:04:49.839 --> 0:04:53.360 have I've already adopted. Their programs are modeled on on 0:04:53.560 --> 0:04:57.839 Canada's and the US. There's two legislators to Republican legislators 0:04:57.880 --> 0:05:01.960 who have proposed as part of a big reform and immigration. 0:05:02.120 --> 0:05:05.239 And what's cool about that story and people should definitely 0:05:05.279 --> 0:05:07.240 check it out is you sort of give it some 0:05:07.279 --> 0:05:10.280 sweet but then you have some personal examples as well. 0:05:10.360 --> 0:05:13.240 Let's talk about climate, because we talked about it here 0:05:13.320 --> 0:05:15.800 a lot like Bloomberg. There's a whole effort in the 0:05:15.800 --> 0:05:18.840 news room. You look at it through one river, tell 0:05:18.880 --> 0:05:21.640 us about right, So we went to a river that 0:05:21.720 --> 0:05:24.440 runs through several countries in Southern Africa, and we chose 0:05:24.480 --> 0:05:28.080 Southern Africa because it's one of the most vulnerable places 0:05:28.640 --> 0:05:33.000 in terms of um Basically people and governments do not 0:05:33.240 --> 0:05:37.080 have the money to spend in mitigation. So we looked 0:05:37.080 --> 0:05:39.920 at in this river, the Zambezi, which starts in Zambia 0:05:40.000 --> 0:05:43.560 and winds all the way down to Mozambique. The interesting 0:05:43.560 --> 0:05:46.360 thing is in the north the problem has been drought 0:05:46.920 --> 0:05:50.200 and in the south there have been two floods and cyclones. 0:05:51.279 --> 0:05:54.360 So it's basically the story of wacky weather and how 0:05:54.360 --> 0:05:57.120 it plays out for these communities along the river. These 0:05:57.120 --> 0:05:59.359 are important issues, and these are global issues, and you 0:05:59.360 --> 0:06:01.560 guys tackle it so well in the magazine, Christina, thank 0:06:01.600 --> 0:06:05.120 you so much, really appreciated Economics editor Christina Linn blad O. 0:06:05.160 --> 0:06:07.960 We're seeing the economic and really this issue and that's 0:06:08.000 --> 0:06:11.479 Christina Lynn blad You know, she's a frequent guest of ours, 0:06:11.520 --> 0:06:16.000 frequent collaborator in many ways. And this was a tough assignment, 0:06:16.240 --> 0:06:19.440 I think, because how do you really get your arms 0:06:19.440 --> 0:06:21.279 around this new economy right? And she just and she 0:06:21.279 --> 0:06:23.000 looked at so many of the important issues that will 0:06:23.000 --> 0:06:26.719 be facing the global economy in love checking in with her. 0:06:27.560 --> 0:06:30.080 In late November, Bloomberg will host the second annual New 0:06:30.120 --> 0:06:34.000 Economy Forum in Beijing. It was established in by Mike Bloomberg, 0:06:34.040 --> 0:06:36.440 of course, the founder of Bloomberg LP, home to Bloomberg 0:06:36.440 --> 0:06:39.200 Business Week, Bloomberg TV and Radio. And here to tell 0:06:39.240 --> 0:06:41.640 us more is Andy Brown. He is the editorial director 0:06:41.720 --> 0:06:45.640 of Bloomberg New Economy, a frequent guests a weekly guest 0:06:46.080 --> 0:06:50.080 on our daily radio show, Bloomberg Business Week, so we 0:06:50.200 --> 0:06:52.600 get a chance to chat with him all the time. 0:06:52.640 --> 0:06:56.559 But it felt necessary and important to have him set 0:06:56.600 --> 0:06:59.840 the stage for this big event that's coming up. So Andy, 0:07:00.080 --> 0:07:04.520 help us understand why now, why they're and what people 0:07:04.560 --> 0:07:07.839 can expect to say. You know, the big narrative behind 0:07:08.080 --> 0:07:11.760 the New Economy Forum is the reality of a global 0:07:11.920 --> 0:07:19.080 economy in the throes of profound, wrenching and highly disruptive change. 0:07:19.600 --> 0:07:24.000 And by and large, this change is being botched by 0:07:24.080 --> 0:07:30.440 global institutions, national governments, global leaders. And we believe that 0:07:30.520 --> 0:07:34.440 it is crucially important to put businesses in a room 0:07:34.520 --> 0:07:39.360 together with governments to start talking about these issues um 0:07:39.400 --> 0:07:42.280 that are threatening to pull upon the global economy, public 0:07:42.280 --> 0:07:47.400 private partnerships discussions exactly. So the starting point is to 0:07:47.440 --> 0:07:50.760 get the right groups of people together and then to 0:07:51.320 --> 0:07:55.920 curate conversations in a way which will produce results. We 0:07:56.000 --> 0:07:58.520 want productive conversations. How for two it is that you're 0:07:58.520 --> 0:08:01.920 in Beijing. Considering the backdrop, Like Jason, I've been talking 0:08:01.920 --> 0:08:04.800 about this with everything that's been going on, but specifically 0:08:04.840 --> 0:08:07.080 with us in China, but just everybody focused on China 0:08:07.160 --> 0:08:10.200 right now, it's highly symbolic that we're in Asia. We 0:08:10.280 --> 0:08:13.000 launched the event in in Singapore last year. This is 0:08:13.040 --> 0:08:15.200 the second year we're going to be in in Beijing. 0:08:15.560 --> 0:08:18.920 We talk about transitions. Of course, the biggest transition in 0:08:18.960 --> 0:08:21.680 the world today is the shift in wealth and power 0:08:21.840 --> 0:08:25.120 from the globalized global north of the planet, from the 0:08:25.160 --> 0:08:28.840 west of the planet to the east. And so we 0:08:28.920 --> 0:08:33.320 felt it was really important to host this conversation in 0:08:33.360 --> 0:08:37.400 a part of the economy, the global economy, which is 0:08:37.920 --> 0:08:43.479 you know, really going to be the future Asia, Middle East, Africa. 0:08:44.160 --> 0:08:47.400 This is where the global growth is coming from. And 0:08:47.480 --> 0:08:52.440 getting that relationship right between the old economy focused on 0:08:52.880 --> 0:08:57.479 you know, uh, the industrialized North and the emerging economies 0:08:57.520 --> 0:09:00.280 of the global South is critical. We talked about the 0:09:00.280 --> 0:09:02.800 global economy, and yet we have spent a lot of 0:09:02.840 --> 0:09:06.800 time with you talking about decoupling and and that certainly 0:09:06.880 --> 0:09:09.920 is part of the backdrop here. Amid not just the 0:09:09.960 --> 0:09:14.440 ongoing trade discussions, but the day to day decisions that 0:09:14.559 --> 0:09:18.360 companies are making about their supply chains, about where their 0:09:18.360 --> 0:09:21.760 customers are, how they're going to even manufacture their products. 0:09:22.120 --> 0:09:25.640 Help feather that into some of the discussions you plan 0:09:25.720 --> 0:09:28.960 to have. We're looking again, we're looking at transitions, and 0:09:29.000 --> 0:09:33.440 we we we we were stumbling towards global catastrophe in 0:09:34.040 --> 0:09:37.720 a number of areas. I mean climate obviously, but not 0:09:37.920 --> 0:09:41.680 just climate. Um. The global trading system is folding upon. 0:09:42.320 --> 0:09:45.200 Global central banks have run out of ammunition to fight 0:09:45.240 --> 0:09:50.080 the next financial crisis. You mentioned US China. Uh, these 0:09:50.120 --> 0:09:56.199 two countries have failed to invent a new form or 0:09:56.240 --> 0:10:00.720 a new foundation, um for a relationship that once seemed 0:10:00.800 --> 0:10:05.000 so perfectly symmetrical. You know, and with the China that's 0:10:05.040 --> 0:10:06.880 all grown up now and it's all and it's all 0:10:06.920 --> 0:10:11.160 grown up and and and and and this symmetrical relationship. 0:10:11.280 --> 0:10:16.280 You know, America invented, China innovated um. You know, America 0:10:16.800 --> 0:10:20.640 consumed China produced. I mean, it all fit together so well, 0:10:20.800 --> 0:10:24.960 it was complementary, and it is now fundamentally competitive. Both 0:10:24.960 --> 0:10:28.760 countries are going after the same thing, which is dominance 0:10:28.880 --> 0:10:34.120 in the industries of the future, artificial intelligence, quantum computing, robotics. 0:10:34.720 --> 0:10:38.040 The problem is that these areas are all of them 0:10:38.160 --> 0:10:43.120 dual use civilian military, and so the economic competition bleeds 0:10:43.120 --> 0:10:47.360 into security and military competition. They need to figure out 0:10:47.600 --> 0:10:51.040 a new way of managing this competition. This is one 0:10:51.080 --> 0:10:53.559 of the conversations, a critical conversation that we're going to 0:10:53.640 --> 0:10:55.880 be having a new economy. Well, and what's interesting is 0:10:55.960 --> 0:10:58.840 and and maybe this is being too clever by half, 0:10:58.840 --> 0:11:01.760 but it feels like there's difference between being competitive and 0:11:01.800 --> 0:11:05.000 adversarial in a lot of ways. And you do wonder 0:11:05.360 --> 0:11:08.160 from the headlines and the rhetoric, even just what we've 0:11:08.160 --> 0:11:11.640 heard recently from Vice President Mike Pence as to whether 0:11:12.320 --> 0:11:17.680 the tone has shifted in a meaningful and maybe not permanent, 0:11:17.760 --> 0:11:21.920 but certainly secular versus cyclical. Well, you mentioned Mike Pence. 0:11:21.960 --> 0:11:25.920 I mean, he he gave this storming speech, uh this 0:11:25.960 --> 0:11:30.840 time last year, UM where he essentially at labeled China 0:11:31.120 --> 0:11:35.040 an adversary of the United States, and he took China 0:11:35.120 --> 0:11:37.440 to task over everything from human rights to the way 0:11:37.440 --> 0:11:42.320 it rips off um. You know, American I p forces 0:11:42.360 --> 0:11:47.080 technology transfer and so the Chinese read this not inaccurately 0:11:47.520 --> 0:11:51.160 as the first shots in a Cold war. Um. So 0:11:51.200 --> 0:11:57.000 this this relationship, yes, is moving definitely towards an adversarial one. 0:11:57.880 --> 0:12:02.120 And and and and really it would via completely out 0:12:02.120 --> 0:12:04.600 of control. We're right, We're right on the cusp now 0:12:05.920 --> 0:12:08.000 the two sides. And I mean this is this is 0:12:08.000 --> 0:12:10.640 the sort of the proximate background to the New Economy 0:12:10.679 --> 0:12:14.040 Forum where you had this this trade wall which looked 0:12:14.040 --> 0:12:17.080 as though it was going to rage completely out of control, 0:12:18.360 --> 0:12:20.839 damaging both the US economy, the Chinese economy, and the 0:12:20.880 --> 0:12:23.440 whole global economy. I mean, you know, the the global 0:12:23.480 --> 0:12:26.319 economy really is right on the cusp of recession. On 0:12:26.480 --> 0:12:30.400 the IMF keep lowering their their forecasts for for global growth. 0:12:30.800 --> 0:12:34.200 We have a truce that that it seems as though 0:12:34.200 --> 0:12:37.240 we're going to have a truce, a mini trade deal, 0:12:38.040 --> 0:12:40.200 the purpose of which is not to fix all of 0:12:40.200 --> 0:12:43.680 the problems, which can't do, but is to prevent things 0:12:43.800 --> 0:12:46.760 from getting any worse. What's the goal? What do you 0:12:46.800 --> 0:12:50.040 hope that by the end of the New Economy Forum 0:12:50.120 --> 0:12:53.199 that countries companies, what the next steps that they might 0:12:53.240 --> 0:12:55.960 take the substance of our discussion. You see, we we 0:12:56.600 --> 0:12:59.360 um we we look at the global economy in in 0:12:59.679 --> 0:13:07.240 pill is right, so trade, finance, and investment, technology organization inclusion, 0:13:07.480 --> 0:13:09.559 and we look at each of these as a series 0:13:09.600 --> 0:13:13.120 of transitions. So if you take technology, obviously we're moving 0:13:13.160 --> 0:13:15.520 from a four G world to a five G world, 0:13:15.520 --> 0:13:17.960 which will power all the industries of the future. Now 0:13:18.160 --> 0:13:22.760 you know that that is accompanied by huge geopolitical tensions 0:13:22.800 --> 0:13:25.880 between the US and China, focused on the Chinese gear 0:13:25.960 --> 0:13:31.199 company Huawei. UM. So, the the substance of our conversation 0:13:31.280 --> 0:13:35.880 that include including climate, um you know, is is what 0:13:35.960 --> 0:13:40.160 are the institutions, what are the policies, what are the norms, standards, 0:13:40.600 --> 0:13:45.960 rules that that we need to manage this these transitions 0:13:46.520 --> 0:13:50.720 in a more rational and a less adversarial way. That's 0:13:50.760 --> 0:13:53.760 Andy Brown, editorial director of Bloomberg New Economy and Jason 0:13:53.760 --> 0:13:55.720 We're lucky we get to check in with him every 0:13:55.800 --> 0:13:59.080 week on our daily radio show. And you know his 0:13:59.240 --> 0:14:02.440 vantage point having lived overseas in Asia, it's really been 0:14:02.960 --> 0:14:05.560 um so notable and so important, especially when we've been 0:14:05.559 --> 0:14:07.840 talking a lot about US China trade. But this is 0:14:07.880 --> 0:14:10.000 his issue. Well, that's exactly right, And what I love 0:14:10.000 --> 0:14:12.600 about him is when we sort of get stuck ourselves 0:14:12.600 --> 0:14:15.640 trying to understand what are the nuances of Hong Kong protests, 0:14:15.640 --> 0:14:18.400 what are the nuances of this trade war? He really 0:14:18.440 --> 0:14:21.600 delivers for us. This week, Christine Legard takes over as 0:14:21.600 --> 0:14:24.960 the President of the European Central Bank, it's first female president. 0:14:25.000 --> 0:14:27.040 She inherits a few things and also brings with her 0:14:27.080 --> 0:14:30.080 a different skill set than many of her predecessors. Jason, 0:14:30.200 --> 0:14:32.760 this is a really important story because I think it's 0:14:32.800 --> 0:14:34.760 going to set the tone in many ways for what 0:14:34.840 --> 0:14:38.080 the European economy looks like. But also this is one 0:14:38.080 --> 0:14:41.840 of the best known leaders financial leaders in the world. 0:14:41.960 --> 0:14:46.080 Jana Rando joins us from Frankfurt. She's got the story 0:14:46.200 --> 0:14:50.840 on Madame Christine Leguard, So tell us what Madame Legard 0:14:51.120 --> 0:14:54.440 is looking at as she takes this new big job. 0:14:54.760 --> 0:14:58.640 She has a lot of challenges um to tackle. She 0:14:58.760 --> 0:15:01.320 takes over the CB at time when the economy is 0:15:01.360 --> 0:15:05.360 not doing really well. We're in a slowdown. Germany, the 0:15:05.440 --> 0:15:08.800 largest economy in the region, probably is already in recession. 0:15:09.120 --> 0:15:12.840 Inflation is very low um, monetary policy at the ECB 0:15:13.000 --> 0:15:16.240 is very expansionary, and there is quite a big rift 0:15:16.280 --> 0:15:20.880 in the governing council as to UM what could be 0:15:20.960 --> 0:15:25.600 done as to the policies that are needed, uh to 0:15:25.760 --> 0:15:28.640 overcome the situation. There was a big debate over the 0:15:28.720 --> 0:15:31.600 last stimulus push, and she comes in at a time 0:15:32.400 --> 0:15:34.200 when all that needs to be fixed well, and there's 0:15:34.240 --> 0:15:37.440 frustration right among the ECB policymakers about what the e 0:15:37.600 --> 0:15:39.960 c P e c B excuse me, is doing and 0:15:40.120 --> 0:15:43.240 versus what policymakers in the region are doing or should 0:15:43.240 --> 0:15:45.800 I say not doing to help out the economies. Yeah, 0:15:45.880 --> 0:15:48.360 policy makers at the ECB have really stepped up their 0:15:48.440 --> 0:15:52.920 call governments to do their part to use fiscal space, 0:15:53.040 --> 0:15:57.040 to to implement fiscal stimulus where they have room to 0:15:57.120 --> 0:16:00.640 do so, to implement structural reforms to boost growth potential 0:16:00.720 --> 0:16:03.960 in the region. And so far our governments have taken 0:16:04.320 --> 0:16:07.760 very small steps towards that. They have signaled their willingness 0:16:07.880 --> 0:16:10.480 also in Germany, but not nearly enough as some of 0:16:10.560 --> 0:16:13.080 those policymakers would like to see. I think one of 0:16:13.080 --> 0:16:15.080 the things that I'm interested in and I think Jason, 0:16:15.360 --> 0:16:18.080 we've you know, very often here at Bloomberg talked with 0:16:18.320 --> 0:16:21.240 UM Christine Lagarde. She's going to be a different type 0:16:21.280 --> 0:16:23.920 of leader, and her priorities are going to be different, 0:16:23.960 --> 0:16:26.200 and she's also not someone right who's an economist that 0:16:26.280 --> 0:16:27.960 comes to this job. Ja No, And I think we 0:16:28.040 --> 0:16:30.800 talked about her appearance in sixty Minutes here the United 0:16:30.840 --> 0:16:34.000 States a couple weekends ago, and just sort of the 0:16:34.120 --> 0:16:36.040 tone that she's going to set. And if you were 0:16:36.120 --> 0:16:39.960 to cast two people, you couldn't get more different in 0:16:40.040 --> 0:16:43.760 many ways than Mario Draggy and Christine Lagarde. How is 0:16:43.840 --> 0:16:46.720 that stylistic difference going to play through, Jana? I think 0:16:46.800 --> 0:16:50.920 she comes at a time when her skills are desperately needed. 0:16:50.960 --> 0:16:53.720 She's a very good communicator. She knows how to reach 0:16:53.760 --> 0:16:55.720 out to the people, how to talk to the people, 0:16:56.480 --> 0:16:59.600 which is something that Mario Joggy, despite all his economic 0:16:59.640 --> 0:17:03.520 brilliant hasn't really done a lot over the past couple 0:17:03.600 --> 0:17:07.119 of years. So um to come in now and to 0:17:07.440 --> 0:17:10.040 to go out to the public and explain why that 0:17:10.480 --> 0:17:14.840 monetary policy, that expansionary monetary policy that reduces interest on 0:17:14.960 --> 0:17:18.280 savings is needed, that is very important. She's also very 0:17:18.359 --> 0:17:23.359 interested in social changes, in climate change, all those issues 0:17:23.400 --> 0:17:25.800 that are at the heart of the debate at the moment. 0:17:26.119 --> 0:17:29.520 At the moment, so we can expect to hear from 0:17:29.560 --> 0:17:33.119 her on those issues as well, um Mario dragging. On 0:17:33.160 --> 0:17:39.320 the other hand, stellary economist with impeccable training, UM, that 0:17:39.520 --> 0:17:41.640 is something that she doesn't have, but she can rely 0:17:41.840 --> 0:17:43.680 on on the e CB staff and she has a 0:17:43.720 --> 0:17:46.080 lot of experts there as well well. And it's so 0:17:46.240 --> 0:17:49.080 interesting that you talk about her experience and her experience 0:17:49.160 --> 0:17:52.560 versus drugs, and I think two things come to mind. 0:17:52.880 --> 0:17:54.960 One is she's been in the belly of the beast, 0:17:55.000 --> 0:17:57.720 as it were, in Washington, but also at the i 0:17:57.880 --> 0:18:01.480 m F very concerned with developed in economies as well 0:18:01.600 --> 0:18:05.560 as developed economies. Of course, what is her latest job 0:18:05.640 --> 0:18:08.080 her previous job, I should say, going to help her 0:18:08.200 --> 0:18:11.240 bring in terms of her scope of the world. She's 0:18:11.560 --> 0:18:14.200 used to dealing with people from a lot of different 0:18:14.240 --> 0:18:21.480 backgrounds as you mentioned, emerging markets, developed nations, UM, political leaders, economists, 0:18:21.720 --> 0:18:25.640 financial leaders, UM, and and all that experience she brings 0:18:25.680 --> 0:18:28.920 to the c B where you have just policy makers, 0:18:29.240 --> 0:18:31.720 but also from very different backgrounds. If you think about 0:18:32.240 --> 0:18:35.720 UH policy makers from Germany and Swiedmann, who is a 0:18:35.880 --> 0:18:42.159 very traditional conservative official, where you have people from from 0:18:42.200 --> 0:18:47.240 the Southern States, from Greek Italy which prefer generally loser 0:18:47.280 --> 0:18:52.360 monetary policy, have different views on on fiscal policy as well, 0:18:53.000 --> 0:18:55.040 so it's a very diverse crowd at the c B, 0:18:55.440 --> 0:18:57.760 which is why we see some of the problems some 0:18:57.880 --> 0:19:01.000 of the arguments play out in the public. And I 0:19:01.119 --> 0:19:03.200 think she will she will bring her skills to the 0:19:03.280 --> 0:19:05.800 table and we'll be able to forge a compromise there. 0:19:05.920 --> 0:19:09.760 And that's Yana Randall joining us from Frankfurt. I loved 0:19:09.840 --> 0:19:13.680 this story because Christine Lagarde. In many ways, there's not 0:19:14.000 --> 0:19:17.320 many people who are better documented as a world leader 0:19:17.800 --> 0:19:20.680 than Christine Lagarde, because she has been such a prominent 0:19:20.920 --> 0:19:24.520 woman on the financial landscape. Everybody's written about her, talked 0:19:24.520 --> 0:19:26.359 about her. But I really felt like there were some 0:19:26.760 --> 0:19:29.560 new insights here. Yeah. Absolutely, and that's what's great. It's 0:19:29.600 --> 0:19:32.000 not only what she's done professionally, but some insight into 0:19:32.080 --> 0:19:34.240 who she is as a person. And I love that 0:19:34.359 --> 0:19:37.080 she's not trained as an economist, she doesn't have central 0:19:37.119 --> 0:19:39.359 bank experience. She hates Matt, so this is going to 0:19:39.440 --> 0:19:42.600 be a different European Central Bank. Bloomberg will host the 0:19:42.640 --> 0:19:44.680 New Economy Form in a few weeks in Beijing. To 0:19:44.760 --> 0:19:47.399 coincide with that, our Bloomberg Economics team came up with 0:19:47.440 --> 0:19:50.920 the New Economy Drivers and Disruptors report Jason. It takes 0:19:50.960 --> 0:19:53.840 a look at all the new forces that are narrowing 0:19:53.880 --> 0:19:55.840 the path to development, and it's really going to determine 0:19:55.840 --> 0:19:58.080 the winners and losers going forward. I love digging into 0:19:58.160 --> 0:20:00.440 this because there are some nice graphics really help you 0:20:00.600 --> 0:20:03.040 understand the size and scopes, some nice narrative as well. 0:20:03.359 --> 0:20:05.960 Tom Orlick is the chief economist for Bloomberg Economics. He 0:20:06.080 --> 0:20:10.040 joins us from Washington. He helped put all of this together. 0:20:10.600 --> 0:20:15.040 Tom help us understand the framework because that sort of 0:20:15.119 --> 0:20:17.720 sets the stage for all of the conversations going forward. 0:20:17.880 --> 0:20:20.440 The way we think about this is is something like this. 0:20:21.040 --> 0:20:27.080 UM Imagine an economy which is doing everything right. They're innovative, 0:20:27.520 --> 0:20:32.639 they've got a skilled workforce, they have an efficient government. UM. Now, 0:20:32.760 --> 0:20:37.040 imagine there's a huge meteor hurkling towards that country at 0:20:37.040 --> 0:20:39.520 a thousand miles an hour, and when it hits, it's 0:20:39.520 --> 0:20:42.640 going to wipe the country off the map. UM. Well, 0:20:43.040 --> 0:20:48.480 a traditional economic index, a traditional competitiveness index would tell 0:20:48.560 --> 0:20:51.399 you that country is doing just great. They're going to 0:20:51.440 --> 0:20:53.880 be great now. They're great in ten years time, they're 0:20:53.880 --> 0:20:57.840 great in twenty years time. What our Drivers and Disruptors 0:20:57.960 --> 0:21:00.639 report tries to do is to tell you about the 0:21:00.680 --> 0:21:04.119 meteor tell you about the big risks out there in 0:21:04.200 --> 0:21:08.399 the global economy, and which countries are well positioned in 0:21:08.520 --> 0:21:12.720 relation to those risks, and which countries which economies face 0:21:12.840 --> 0:21:21.360 some challenges and the big meteors. We're looking at our protectionism, populism, automation, 0:21:21.720 --> 0:21:26.040 the rise of the robots, digitization, and of course the 0:21:26.119 --> 0:21:28.720 big challenge climate change. What I love time too is 0:21:28.760 --> 0:21:31.159 how comprehensive it is. Do you just mentioned some of 0:21:31.200 --> 0:21:33.840 the big disruptors that you're looking at, but you also 0:21:33.920 --> 0:21:39.080 looked at a hundred fourteen economies essentially excuse me, so 0:21:39.160 --> 0:21:41.920 almost all of the global GDP, So you really looked 0:21:41.960 --> 0:21:45.040 at the world developed and developing. Yeah, that's right. One 0:21:45.080 --> 0:21:50.200 of the striking takeaways is the difference between how well 0:21:50.320 --> 0:21:56.240 positioned advanced economies are and some of the challenges which 0:21:56.400 --> 0:22:01.120 lower and middle income countries lower middle income economy face. Um. 0:22:01.960 --> 0:22:05.200 The big narrative on the global economy in the last 0:22:05.240 --> 0:22:09.800 fifty years has been a story of catching up, first Japan, 0:22:10.359 --> 0:22:15.440 then Korea, then China, catching up to income levels which 0:22:15.480 --> 0:22:20.600 we see in Europe and the US mainly by exporting UM. 0:22:21.119 --> 0:22:24.040 And what our analysis tells us is that with some 0:22:24.160 --> 0:22:29.040 of the disruptive forces sweeping the global economy, things like protectionism, 0:22:29.680 --> 0:22:33.720 things like automation, with robots able to do more and 0:22:33.880 --> 0:22:36.720 more of the low skill, low cost jobs which have 0:22:36.840 --> 0:22:40.000 been an advantage for lower, low cost economies in the past, 0:22:40.960 --> 0:22:44.520 that path to development which low income countries have followed 0:22:44.960 --> 0:22:47.880 is not broken, but it's just going to be much 0:22:47.920 --> 0:22:49.800 harder to follow well. And this is what I love. 0:22:49.880 --> 0:22:52.159 This whole idea of catching up is harder to do 0:22:52.320 --> 0:22:56.000 in this environment today. Yeah. So, I mean, let's think 0:22:56.040 --> 0:23:00.480 about the big forces that have propelled cat up in 0:23:00.560 --> 0:23:05.240 the past. UM. So there's low incomes or low cost 0:23:05.400 --> 0:23:10.600 wages UM. And there's the big open global economy UM. 0:23:11.040 --> 0:23:14.560 And there's policymakers who are willing to make the difficult, 0:23:14.680 --> 0:23:19.960 sometimes painful reforms to align economies for growth UM. And 0:23:20.480 --> 0:23:24.360 across each of those, the disruptive forces that we're tracking 0:23:24.680 --> 0:23:28.360 are going to make life more difficult. You've got robots 0:23:28.680 --> 0:23:31.360