1 00:00:00,440 --> 00:00:04,720 Speaker 1: We come here to begin a new era, an era 2 00:00:04,960 --> 00:00:11,319 Speaker 1: of real promise. In this meeting, for these days, we 3 00:00:11,360 --> 00:00:16,080 Speaker 1: have put our people first, and we have thought about tomorrow. 4 00:00:17,480 --> 00:00:20,760 Speaker 1: We are bound together by geography, by history, by culture, 5 00:00:21,800 --> 00:00:27,120 Speaker 1: but most important now by shared values. We have tried 6 00:00:27,160 --> 00:00:31,000 Speaker 1: to give life to these values at this summit by 7 00:00:31,120 --> 00:00:34,360 Speaker 1: agreeing to create a free trade area throughout our hemisphere, 8 00:00:35,479 --> 00:00:38,400 Speaker 1: to bring together our nations, to improve the quality of 9 00:00:38,440 --> 00:00:42,479 Speaker 1: life for our peoples, and to strengthen and make permanent 10 00:00:42,640 --> 00:00:47,120 Speaker 1: the march of democracy. This is more than words. This 11 00:00:47,240 --> 00:00:59,959 Speaker 1: is a commitment to deeds. Hello, and welcome to Stephaniel. 12 00:01:00,000 --> 00:01:02,080 Speaker 1: It's the podcast that brings the global economy to you. 13 00:01:02,280 --> 00:01:05,720 Speaker 1: And that was President Bill Clinton at the closing ceremony 14 00:01:05,720 --> 00:01:08,640 Speaker 1: of the First Summit of the America's which he convened 15 00:01:08,720 --> 00:01:13,800 Speaker 1: in Miami. As you heard there, it was supposed to 16 00:01:13,880 --> 00:01:17,080 Speaker 1: mark the beginning of a new era of cooperation across 17 00:01:17,160 --> 00:01:20,560 Speaker 1: the America's. In fact, all it started was a tradition 18 00:01:20,600 --> 00:01:23,800 Speaker 1: of holding these summits every few years, which generally didn't 19 00:01:23,840 --> 00:01:27,760 Speaker 1: achieve much. That free trade area of the America's that 20 00:01:27,880 --> 00:01:32,639 Speaker 1: went nowhere, and the US hasn't hosted another one until now. 21 00:01:33,120 --> 00:01:36,080 Speaker 1: With President Biden holding his own summ into the America's 22 00:01:36,120 --> 00:01:39,480 Speaker 1: in just a few days time in Los Angeles. The 23 00:01:39,600 --> 00:01:42,919 Speaker 1: guest list, though, is still in doubt to be honest. 24 00:01:43,080 --> 00:01:46,440 Speaker 1: So are those shared values President Clinton talked about back 25 00:01:46,480 --> 00:01:49,320 Speaker 1: in ninety four. I'm going to talk about all that 26 00:01:49,440 --> 00:01:52,640 Speaker 1: later with Juan Bablo Spinetto, who runs all of Bloomberg's 27 00:01:52,680 --> 00:01:56,320 Speaker 1: economic and government coverage in Latin America. After that, we 28 00:01:56,360 --> 00:01:58,720 Speaker 1: also have a chat with one of the authors of 29 00:01:58,720 --> 00:02:01,720 Speaker 1: a major new report about where we get our human 30 00:02:01,760 --> 00:02:05,320 Speaker 1: capital from. It's not where you might think, it turns out. 31 00:02:06,000 --> 00:02:09,359 Speaker 1: But first, here's our Mexico City based reports, admire Ather 32 00:02:09,480 --> 00:02:12,560 Speaker 1: buch To explain why plans for this summit are in 33 00:02:12,680 --> 00:02:32,040 Speaker 1: such a mess. Episode is in momento. The it's in momento. 34 00:02:32,280 --> 00:02:43,720 Speaker 1: The initial in lais the America. You are said only 35 00:02:43,840 --> 00:02:50,480 Speaker 1: him Blomundo. That was Andress Manuel Lopez Brador, also known 36 00:02:50,520 --> 00:02:54,919 Speaker 1: as Amlo, the popular and populous President of Mexico, expressing 37 00:02:54,919 --> 00:02:59,000 Speaker 1: his support for a new era of cooperation throughout the America's. 38 00:03:00,480 --> 00:03:03,919 Speaker 1: In fact, improving relations across the region is a key 39 00:03:03,919 --> 00:03:08,160 Speaker 1: objective for President Joe Biden too. He needs the support 40 00:03:08,200 --> 00:03:11,520 Speaker 1: of Mexico and its Latin American neighbors to prevent the 41 00:03:11,600 --> 00:03:15,120 Speaker 1: persistent of rival of migrants at the US's southern border 42 00:03:15,200 --> 00:03:19,800 Speaker 1: from becoming a political problem. However, a meeting of the 43 00:03:19,840 --> 00:03:23,760 Speaker 1: region's leaders next week in Los Angeles is looking less 44 00:03:23,800 --> 00:03:27,280 Speaker 1: like an opportunity to men defences and more like a 45 00:03:27,360 --> 00:03:32,640 Speaker 1: political fiasco. The US is hosting the Summit of the 46 00:03:32,680 --> 00:03:35,840 Speaker 1: America's for the first time since the summits founding in 47 00:03:37,680 --> 00:03:40,000 Speaker 1: and on the eve of the event, not all of 48 00:03:40,000 --> 00:03:44,960 Speaker 1: the would be participants have accepted their invitations. At the 49 00:03:45,000 --> 00:03:48,080 Speaker 1: top of the list of holdouts is am Loo, who 50 00:03:48,080 --> 00:03:51,200 Speaker 1: has threatened to boycott the event unless the US also 51 00:03:51,240 --> 00:03:56,800 Speaker 1: invites Venezuela, Nicaragua, and Cuba. For now, inviting the heads 52 00:03:56,800 --> 00:03:59,360 Speaker 1: of those three nations is a non starter for the 53 00:03:59,400 --> 00:04:04,520 Speaker 1: Biden and illustration. The standoff is exposing the fault lines 54 00:04:04,760 --> 00:04:09,240 Speaker 1: across the America's, including a desire by leaders in the 55 00:04:09,280 --> 00:04:13,320 Speaker 1: region for the US to stop imposing its political vision. 56 00:04:14,080 --> 00:04:20,640 Speaker 1: Here's Andres Rosenthal, a Mexican career diplomat. The history goes 57 00:04:20,680 --> 00:04:28,599 Speaker 1: back to four when the US decided to convene the 58 00:04:28,680 --> 00:04:35,000 Speaker 1: first Summit of the America's basically with the clear intention 59 00:04:35,920 --> 00:04:42,400 Speaker 1: of trying to gauge interest in the region for an integration, 60 00:04:43,440 --> 00:04:50,000 Speaker 1: a economic integration of the America's somewhat similar to the 61 00:04:50,000 --> 00:04:55,160 Speaker 1: European Union. UH. It was not successful. There were too 62 00:04:55,160 --> 00:05:01,839 Speaker 1: many differing views regarding the possibility of integration, as I'm 63 00:05:01,880 --> 00:05:05,200 Speaker 1: sure they still there still are today. It's the first 64 00:05:05,240 --> 00:05:08,280 Speaker 1: time that the United States hosts the Summit of the 65 00:05:08,320 --> 00:05:14,320 Speaker 1: America since it was clear to my mind at least 66 00:05:14,400 --> 00:05:19,720 Speaker 1: that this was an attempt by President Biden to reaffirm 67 00:05:20,880 --> 00:05:25,320 Speaker 1: US interest in the region, uh, notwithstanding all of the 68 00:05:25,360 --> 00:05:30,000 Speaker 1: other distractions going on, and to be able to bring 69 00:05:30,600 --> 00:05:35,120 Speaker 1: the leadership of the region to Los Angeles in order 70 00:05:35,160 --> 00:05:43,960 Speaker 1: to discuss issues such as migration, economic competitiveness, climate change. 71 00:05:44,920 --> 00:05:47,279 Speaker 1: But we haven't even gotten to the part where leaders 72 00:05:47,320 --> 00:05:51,839 Speaker 1: can discuss crucial issues. First, Latin America's leaders need to 73 00:05:51,880 --> 00:05:56,720 Speaker 1: show up. Almost says if Biden does not treat all 74 00:05:56,760 --> 00:05:59,960 Speaker 1: countries equally, he will send his foreign affairs men as 75 00:06:00,120 --> 00:06:03,400 Speaker 1: or to the summit, but the Mexican president himself will 76 00:06:03,440 --> 00:06:07,560 Speaker 1: stay home. Meanwhile, other countries have said they refused to go. 77 00:06:08,440 --> 00:06:10,760 Speaker 1: Qubas president said he would not go even if he 78 00:06:10,839 --> 00:06:13,760 Speaker 1: did get an invite. Guatemala has made a fuss over 79 00:06:13,839 --> 00:06:17,679 Speaker 1: US criticism of its justice system, and Honduras as president 80 00:06:17,760 --> 00:06:20,360 Speaker 1: said she would not go if other leaders were left out. 81 00:06:21,920 --> 00:06:25,480 Speaker 1: The question for Biden is whether a lackluster turnout is 82 00:06:25,640 --> 00:06:28,560 Speaker 1: enough or if the boycott by some nations is one 83 00:06:28,640 --> 00:06:34,000 Speaker 1: snub too many. Guala Lupea Cabrera, a political scientist and 84 00:06:34,160 --> 00:06:38,560 Speaker 1: migration scholar at George Mason University, says the hubbub is 85 00:06:38,600 --> 00:06:40,960 Speaker 1: a sign of the loss of US influence in the 86 00:06:41,040 --> 00:06:44,640 Speaker 1: region and it comes at a tricky time for the 87 00:06:44,680 --> 00:06:48,920 Speaker 1: Biden administration. The u s midterm elections are in November, 88 00:06:49,400 --> 00:06:52,800 Speaker 1: and they will determine whether Biden's Democratic Party retains its 89 00:06:52,800 --> 00:06:57,120 Speaker 1: majority in Congress. The US is concerned in Latin America's 90 00:06:57,120 --> 00:06:59,880 Speaker 1: whether Mexico and its neighbors will help block migration and 91 00:07:00,040 --> 00:07:03,520 Speaker 1: boost trade. But almost he's standing up to Biden as 92 00:07:03,520 --> 00:07:06,880 Speaker 1: a winning political strategy that could help his own party 93 00:07:06,880 --> 00:07:11,800 Speaker 1: in the upcoming Mexican regional elections and later on. The 94 00:07:12,360 --> 00:07:17,000 Speaker 1: current administration is thinking about a midterm elections and also 95 00:07:17,520 --> 00:07:22,920 Speaker 1: UH stability in terms of diplomacy and a hemispheric stability. 96 00:07:23,240 --> 00:07:27,120 Speaker 1: It's important for for the Democrats in a very complicated 97 00:07:27,480 --> 00:07:31,760 Speaker 1: electoral process that will probably not result in big in 98 00:07:31,760 --> 00:07:35,320 Speaker 1: a big victory for them. On the contrary, so at 99 00:07:35,320 --> 00:07:39,520 Speaker 1: this point also migration, it's it's at the center probably 100 00:07:39,560 --> 00:07:43,720 Speaker 1: of the discussion, considering that a number of people from 101 00:07:43,800 --> 00:07:47,240 Speaker 1: different parts of the world start a journey in different 102 00:07:47,240 --> 00:07:50,720 Speaker 1: parts of South America, and we have the problems in 103 00:07:50,800 --> 00:07:55,680 Speaker 1: Central America that have been magnified because of COVID nineteen pandemic. 104 00:07:56,000 --> 00:07:58,560 Speaker 1: The pandemic has been a time of big change in 105 00:07:58,640 --> 00:08:01,440 Speaker 1: Latin America and many of the leaders who have been 106 00:08:01,480 --> 00:08:03,880 Speaker 1: invited to the summit I have never met one another 107 00:08:04,600 --> 00:08:07,440 Speaker 1: in these two years. Chile elected at three five year 108 00:08:07,480 --> 00:08:10,960 Speaker 1: old leftist Colombians voted in a first round election for 109 00:08:11,000 --> 00:08:14,800 Speaker 1: a Garia fighter turned mayor, and Brazil lost its love 110 00:08:15,200 --> 00:08:20,440 Speaker 1: for the conservative and brash Yeah Tonto Honduras, his former president, 111 00:08:20,480 --> 00:08:24,320 Speaker 1: got extradited to the US on drug trafficking charges, a 112 00:08:24,440 --> 00:08:29,200 Speaker 1: huge fall from Grace, and Mexicans cemented their support for Amlo, 113 00:08:29,400 --> 00:08:32,880 Speaker 1: who has frequently criticized the US for its intervention in 114 00:08:32,960 --> 00:08:37,080 Speaker 1: Mexico security and energy affairs, while calling for more US 115 00:08:37,160 --> 00:08:42,920 Speaker 1: investment at a time when economic recovery has been too slow. Rosenthal, 116 00:08:43,000 --> 00:08:46,200 Speaker 1: the diplomat says the embarrassing debate over whether or not 117 00:08:46,240 --> 00:08:50,000 Speaker 1: to attend the summit could have been avoided. The US government, 118 00:08:50,040 --> 00:08:53,959 Speaker 1: the White House has mismanaged this issue because they should 119 00:08:54,000 --> 00:08:57,160 Speaker 1: have foreseen this from the very beginning, and they should 120 00:08:57,160 --> 00:09:01,000 Speaker 1: have made whatever efforts needed to be made, either not 121 00:09:01,120 --> 00:09:03,240 Speaker 1: to hold the summit if they weren't going to invite 122 00:09:03,280 --> 00:09:07,400 Speaker 1: some of the countries of the region, or to find 123 00:09:07,480 --> 00:09:12,200 Speaker 1: some solution before they it became a political heart patago. 124 00:09:13,720 --> 00:09:18,520 Speaker 1: The Biden administration's objection to hosting Venezuela, Nicaragua, and Cuba 125 00:09:18,720 --> 00:09:23,840 Speaker 1: centers on its characterization of those countries as undemocratic. To 126 00:09:23,960 --> 00:09:27,679 Speaker 1: be sure, though the US has negotiated with the countries 127 00:09:27,720 --> 00:09:32,000 Speaker 1: on its no fly list in the past. Vanessa Rubio Marquez, 128 00:09:32,080 --> 00:09:35,640 Speaker 1: who once worked in Mexico's Foreign Affairs ministry, remembers what 129 00:09:35,720 --> 00:09:39,400 Speaker 1: it looked like when the United States was just another participant. 130 00:09:39,640 --> 00:09:42,560 Speaker 1: I was in that very historic moment in which a 131 00:09:42,640 --> 00:09:47,840 Speaker 1: President Castro shook hands with back then President Obama. I 132 00:09:47,920 --> 00:09:51,200 Speaker 1: was in twenty in Panama at another summit of the 133 00:09:51,200 --> 00:09:55,400 Speaker 1: America's So I guess what what a president man had 134 00:09:55,400 --> 00:09:58,880 Speaker 1: in mind was the possibility of having once again all 135 00:09:58,960 --> 00:10:02,280 Speaker 1: of the countries of the Amisphere invited to the stummits. 136 00:10:02,520 --> 00:10:06,520 Speaker 1: But of course, in the context of this very divided 137 00:10:07,200 --> 00:10:11,560 Speaker 1: Latin America, what has been happening is that countries have 138 00:10:11,720 --> 00:10:24,120 Speaker 1: cited one way or the other. So we can get 139 00:10:24,160 --> 00:10:28,119 Speaker 1: a bit more context now. From Juan Pablo spinetto Bloomberg 140 00:10:28,120 --> 00:10:33,079 Speaker 1: Managing editor for Economics and Government, Maya's boss JP, thanks 141 00:10:33,080 --> 00:10:37,000 Speaker 1: for coming on, Stephanomics. We've had some of the history 142 00:10:37,160 --> 00:10:41,200 Speaker 1: in that piece. But the plasmo the guest list for 143 00:10:41,240 --> 00:10:45,280 Speaker 1: these summits has always been a problem, hasn't it always? 144 00:10:45,320 --> 00:10:48,640 Speaker 1: And thanks for the invitation, Stephanie. Um. You know, the 145 00:10:48,760 --> 00:10:52,640 Speaker 1: issue of Cuba has been for decades, very sensitive, obviously, 146 00:10:53,120 --> 00:10:56,520 Speaker 1: and you have guessed that the White House thought about 147 00:10:56,559 --> 00:11:01,000 Speaker 1: it before, but it didn't and uh show up and 148 00:11:01,120 --> 00:11:04,880 Speaker 1: exploded when I'm law decided to play politics and say, okay, 149 00:11:04,960 --> 00:11:09,079 Speaker 1: if you don't invite these guys Cuba, Venezuela and Nicaraga, 150 00:11:09,160 --> 00:11:11,240 Speaker 1: I'm basically not going to go to this meeting, which 151 00:11:11,280 --> 00:11:14,520 Speaker 1: put the White House in a very tough position. When 152 00:11:14,520 --> 00:11:16,120 Speaker 1: I was looking back at some of the sort of 153 00:11:16,160 --> 00:11:18,640 Speaker 1: colorful history of some of these meetings that even before 154 00:11:18,679 --> 00:11:21,080 Speaker 1: the Summit of the America's There was a There was 155 00:11:21,120 --> 00:11:27,000 Speaker 1: a North South summit in Cancoon in Mexico in nineteen one, 156 00:11:27,080 --> 00:11:30,680 Speaker 1: which which famously also caused all the same issues around 157 00:11:31,280 --> 00:11:34,640 Speaker 1: whether or not Castro could come. So remind me what 158 00:11:34,760 --> 00:11:38,240 Speaker 1: happened there exactly. It happened the same as you know now. 159 00:11:38,679 --> 00:11:42,640 Speaker 1: That was forty years ago. Ronald Reagan was going to Cancun. 160 00:11:42,760 --> 00:11:46,600 Speaker 1: That put Mexico in a tight spot because they needed 161 00:11:46,640 --> 00:11:49,760 Speaker 1: to decide what to do with Cuba. Mexico has always 162 00:11:49,800 --> 00:11:52,640 Speaker 1: been very friendly to to Cuba during the p r 163 00:11:52,720 --> 00:11:57,120 Speaker 1: I years, and so the solution they came up was, Okay, 164 00:11:57,160 --> 00:11:59,800 Speaker 1: we're not gonna invite Fidel Castro, but we're gonna in 165 00:12:00,040 --> 00:12:03,640 Speaker 1: white team. A few days before to a meeting in Costmel, 166 00:12:04,280 --> 00:12:07,840 Speaker 1: So the president at the time, Lopes Potio, called Fidel 167 00:12:07,960 --> 00:12:12,439 Speaker 1: to make the invitation and he traveled by ship by 168 00:12:12,480 --> 00:12:16,200 Speaker 1: a navy yacht from the island to Costomel, which is 169 00:12:16,240 --> 00:12:19,760 Speaker 1: also an island in the Caribbean. Cost of Mexico held 170 00:12:19,760 --> 00:12:24,280 Speaker 1: a meeting. Cosmo is actually rather nice than Cancoon. Fantastic, 171 00:12:24,360 --> 00:12:26,960 Speaker 1: fantastic place. And I actually I think they met a 172 00:12:26,960 --> 00:12:31,120 Speaker 1: few times there in Costumel and um and they had 173 00:12:31,120 --> 00:12:34,480 Speaker 1: a meeting there. So Mexico has always been doing that 174 00:12:34,640 --> 00:12:37,400 Speaker 1: balance right, knowing that they can get on a fight 175 00:12:37,520 --> 00:12:39,720 Speaker 1: with the US, but at the same time, you know, 176 00:12:39,840 --> 00:12:43,040 Speaker 1: making their point, their stands and showing that they are 177 00:12:43,080 --> 00:12:47,080 Speaker 1: allies with the Cuban regime. And coming back to today, 178 00:12:47,080 --> 00:12:49,240 Speaker 1: when you think of sort of more broadly among Latin 179 00:12:49,280 --> 00:12:53,840 Speaker 1: American leaders, do they think this summit by President Biden 180 00:12:53,960 --> 00:12:56,880 Speaker 1: is entirely politically motivated and to do with the u 181 00:12:56,960 --> 00:12:58,920 Speaker 1: s midterms or do you think they give him some 182 00:12:59,000 --> 00:13:02,520 Speaker 1: benefit of the doubt that he wants to support integration 183 00:13:02,600 --> 00:13:05,760 Speaker 1: across the region. I think it's a bit confusing the 184 00:13:06,040 --> 00:13:09,960 Speaker 1: message that the US is sending, because obviously it's nice 185 00:13:10,000 --> 00:13:13,200 Speaker 1: to be invited, but we haven't seen a strong agenda 186 00:13:13,360 --> 00:13:17,280 Speaker 1: so far. There were we reported, you know, the interests 187 00:13:17,320 --> 00:13:21,000 Speaker 1: of the White House to focus on trade, but you 188 00:13:21,080 --> 00:13:25,040 Speaker 1: need deliverables, right. One of the reasons why the the 189 00:13:25,240 --> 00:13:28,720 Speaker 1: Brazilian presidents didn't want to go to la had nothing 190 00:13:28,720 --> 00:13:32,120 Speaker 1: to do with Cuba, obviously, but because of his internal reasons, 191 00:13:32,360 --> 00:13:35,640 Speaker 1: and he is fighting a very tough re election campaign 192 00:13:36,320 --> 00:13:38,800 Speaker 1: and his point was what it is for me to 193 00:13:38,880 --> 00:13:41,600 Speaker 1: go to l A, which is twelve hours away from 194 00:13:41,600 --> 00:13:44,960 Speaker 1: Brazilia to meet with Biden who never pick up the 195 00:13:44,960 --> 00:13:48,720 Speaker 1: phone and talk to me until now. And we're not 196 00:13:48,720 --> 00:13:53,200 Speaker 1: gonna get anything, but you know, a photoshop. Um. So 197 00:13:53,760 --> 00:13:57,360 Speaker 1: the Origion expects, uh, you know, more concrete steps and 198 00:13:57,480 --> 00:14:01,680 Speaker 1: not just to be you know, lecture about migration. Basically, 199 00:14:02,559 --> 00:14:03,719 Speaker 1: you and I were in I mean I was in 200 00:14:03,800 --> 00:14:06,199 Speaker 1: Mexico with you a couple of weeks ago and we 201 00:14:06,320 --> 00:14:08,840 Speaker 1: talked about this. You know, if when you don't spend 202 00:14:08,840 --> 00:14:13,079 Speaker 1: time there, you don't realize quite how strange in some 203 00:14:13,120 --> 00:14:15,959 Speaker 1: ways the President Amlo is. You know, he's not a 204 00:14:16,040 --> 00:14:18,679 Speaker 1: sort of tradition he's a populist, but he's not traditionally 205 00:14:18,800 --> 00:14:21,520 Speaker 1: left wing. He had a very tight fiscal policy, didn't 206 00:14:21,520 --> 00:14:25,080 Speaker 1: spend a lot during COVID. He's very dedicated to these 207 00:14:25,120 --> 00:14:28,120 Speaker 1: kind of big projects, quite old fashioned projects, like building 208 00:14:28,160 --> 00:14:32,840 Speaker 1: a big new petrol refinery. Do you think the Americans 209 00:14:32,880 --> 00:14:37,280 Speaker 1: even sort of know what to make of Amlo or 210 00:14:37,920 --> 00:14:40,480 Speaker 1: do they understand what makes his government tick or does 211 00:14:40,520 --> 00:14:43,480 Speaker 1: anyone understand what makes his government take I think you know, 212 00:14:43,760 --> 00:14:46,960 Speaker 1: they do in a way, um, in the sense of 213 00:14:47,920 --> 00:14:52,080 Speaker 1: they have been very respectful, to be honest of of 214 00:14:52,480 --> 00:14:57,160 Speaker 1: Mexico's autonomy and that's something that even Amlow recognized and 215 00:14:57,280 --> 00:15:02,440 Speaker 1: he's very um grateful for. Uh. He always talked about this, 216 00:15:02,520 --> 00:15:05,440 Speaker 1: and this is very important to any Mexican president right 217 00:15:05,520 --> 00:15:09,360 Speaker 1: the the the appearance of negotiating as a as as 218 00:15:09,360 --> 00:15:14,160 Speaker 1: spears and not a not as being imposed by the 219 00:15:14,280 --> 00:15:19,760 Speaker 1: US right now, it's a very difficult negotiation because in 220 00:15:19,840 --> 00:15:23,240 Speaker 1: a way for the US, the only thing that matters 221 00:15:23,400 --> 00:15:28,040 Speaker 1: right now is migration, and especially not having a migration 222 00:15:28,120 --> 00:15:32,920 Speaker 1: crisis during the midterm. So uh that you know, on 223 00:15:32,920 --> 00:15:39,080 Speaker 1: one side, um prevents the development of other projects, but 224 00:15:39,120 --> 00:15:42,040 Speaker 1: at the same time gives some a lot more leeway 225 00:15:42,200 --> 00:15:48,360 Speaker 1: to play his own cards, right knowing that by containing migration, uh, 226 00:15:48,400 --> 00:15:51,560 Speaker 1: the Americans will be happy. I mean, if we step back, 227 00:15:51,640 --> 00:15:54,160 Speaker 1: the other thing that we probably talked about even more 228 00:15:54,160 --> 00:15:56,080 Speaker 1: when we were in Mexico, it was not anything to 229 00:15:56,080 --> 00:15:58,360 Speaker 1: do with the summit. Anything that's going to happen in 230 00:15:58,360 --> 00:16:02,400 Speaker 1: in Los Angeles is but what's happening in Washington and 231 00:16:02,520 --> 00:16:06,840 Speaker 1: precisely what's happening inside the Federal Reserve. I mean this Historically, 232 00:16:07,600 --> 00:16:11,880 Speaker 1: a period of rising US interest rates has been bad 233 00:16:11,960 --> 00:16:15,200 Speaker 1: news for many countries. In Latin America, and certainly we 234 00:16:15,240 --> 00:16:20,040 Speaker 1: saw in the eighties and in the mid nineties when 235 00:16:20,120 --> 00:16:24,200 Speaker 1: the US was increasing interest rates making money more expensive, 236 00:16:24,600 --> 00:16:26,760 Speaker 1: it was a lot of countries in Latin America that 237 00:16:26,880 --> 00:16:29,680 Speaker 1: ended up paying a heavy price for that. So is 238 00:16:29,720 --> 00:16:35,120 Speaker 1: that How worried are people in Mexico and around the 239 00:16:35,200 --> 00:16:39,840 Speaker 1: region about that possibility? Now? Of course? Uh, you know 240 00:16:40,080 --> 00:16:43,240 Speaker 1: here something very interesting happening, which is the Latin Riican 241 00:16:43,320 --> 00:16:47,320 Speaker 1: central banks were the first ones to move. Brasil started 242 00:16:47,360 --> 00:16:51,760 Speaker 1: to increase the interest rates um in March last year, 243 00:16:52,560 --> 00:16:56,120 Speaker 1: so and the tightening cycle has been very aggressive so far. 244 00:16:56,680 --> 00:16:59,600 Speaker 1: So by the time they these years started to move, 245 00:17:00,080 --> 00:17:03,200 Speaker 1: Latin America already created a cushion that you know, you 246 00:17:03,240 --> 00:17:08,480 Speaker 1: can see it basically in stronger exchange rates. Uh, that 247 00:17:09,320 --> 00:17:13,080 Speaker 1: you know, at the same time prevented the capital outflows 248 00:17:13,119 --> 00:17:17,480 Speaker 1: that tend to generate those crises UM as we saw 249 00:17:17,480 --> 00:17:21,000 Speaker 1: in the past. Now, to me, the answer here, the 250 00:17:21,040 --> 00:17:24,320 Speaker 1: main point is how far the fat is ready to go. 251 00:17:24,640 --> 00:17:27,479 Speaker 1: I think if we if the titaning cycle in the 252 00:17:27,600 --> 00:17:30,800 Speaker 1: US is something reasonable and we start to see inflation 253 00:17:30,880 --> 00:17:33,520 Speaker 1: coming down, even even if it's not getting to two 254 00:17:33,560 --> 00:17:38,040 Speaker 1: percent anytime soon, Latin America will be uh in as 255 00:17:38,040 --> 00:17:43,040 Speaker 1: safe as safer place than you have imagined, um, considering 256 00:17:43,280 --> 00:17:48,000 Speaker 1: the scope of this cycle now, and that's interesting to 257 00:17:48,119 --> 00:17:50,479 Speaker 1: be may not of course people's radar that actually that 258 00:17:50,520 --> 00:17:54,240 Speaker 1: the many of the major central banks in Latin America, 259 00:17:54,320 --> 00:17:58,160 Speaker 1: certainly in Mexico, had raised interest rates long before the FATS, 260 00:17:58,240 --> 00:18:01,200 Speaker 1: And we're ahead of the game when we spend time 261 00:18:01,240 --> 00:18:04,879 Speaker 1: criticizing the FED for having got behind the curb. So finally, JP, 262 00:18:05,080 --> 00:18:06,760 Speaker 1: I mean, you've you know, you've been around the block 263 00:18:06,800 --> 00:18:08,800 Speaker 1: a few times, if I may say that, you've seen 264 00:18:08,880 --> 00:18:11,440 Speaker 1: some of these summits come and go. Do you think 265 00:18:11,440 --> 00:18:15,640 Speaker 1: it's salable, salvageable? Do you think that the Mexican president 266 00:18:15,680 --> 00:18:17,439 Speaker 1: in the end will go to l A? What do 267 00:18:17,440 --> 00:18:19,679 Speaker 1: you think he may not go? I mean, it's funny 268 00:18:19,720 --> 00:18:21,840 Speaker 1: he said, you know, he may design next week on 269 00:18:21,880 --> 00:18:24,320 Speaker 1: the spot, and he's not very far from l A, 270 00:18:25,560 --> 00:18:29,200 Speaker 1: so he it's a flexible ticket. He even joke up stuff. 271 00:18:29,880 --> 00:18:32,400 Speaker 1: He even joke about flying to Tijuana and taking a car. 272 00:18:33,240 --> 00:18:35,880 Speaker 1: But you know, I think it's salvageable in the sense 273 00:18:35,880 --> 00:18:37,879 Speaker 1: of it's going to happen. The president who will be 274 00:18:37,920 --> 00:18:40,520 Speaker 1: there if I'm not doesn't go, it will be mostly 275 00:18:40,960 --> 00:18:44,840 Speaker 1: his mistake or he's you know, he will be losing out. 276 00:18:44,920 --> 00:18:47,840 Speaker 1: I think in the end if everybody else go, I 277 00:18:47,840 --> 00:18:50,359 Speaker 1: don't think we're gonna see a lot of the little 278 00:18:50,400 --> 00:18:53,560 Speaker 1: bubbles um that's the main thing. But we're gonna have 279 00:18:53,600 --> 00:18:56,439 Speaker 1: a meeting, We're going to have a photo and you know, 280 00:18:56,520 --> 00:19:00,639 Speaker 1: somebody laterals and that's always interesting and well. It certainly 281 00:19:00,680 --> 00:19:03,240 Speaker 1: goes along with the long tradition of photo ops that 282 00:19:03,359 --> 00:19:05,960 Speaker 1: these of these summits, but not a lot of deliverable 283 00:19:05,960 --> 00:19:08,000 Speaker 1: as well for those people who are waiting in tenter 284 00:19:08,040 --> 00:19:10,320 Speaker 1: hooks to see how this summit of the America's goes down. 285 00:19:10,359 --> 00:19:13,480 Speaker 1: We will potentially be talking to Maya from l A 286 00:19:14,280 --> 00:19:17,360 Speaker 1: next week. But Juan Pablo Spinda, thank you very much. 287 00:19:17,480 --> 00:19:28,000 Speaker 1: Thank you. I'm not a person I caught up with 288 00:19:28,040 --> 00:19:30,680 Speaker 1: in devils. The other day was Spen Smid, the director 289 00:19:30,720 --> 00:19:34,160 Speaker 1: and chair of the McKinsey Global Institute. And the institute 290 00:19:34,200 --> 00:19:37,600 Speaker 1: puts out reports which usually draw on enormous amounts of 291 00:19:37,680 --> 00:19:41,280 Speaker 1: data and experience to say something interesting about the world. 292 00:19:41,640 --> 00:19:44,600 Speaker 1: And they've just published a big one about human capital 293 00:19:44,760 --> 00:19:48,280 Speaker 1: and the value of experience. It's based on the careers 294 00:19:48,359 --> 00:19:53,040 Speaker 1: of four million workers in several countries. Human capital is 295 00:19:53,080 --> 00:19:55,800 Speaker 1: one of those phrases that politicians talk about a lot. 296 00:19:56,200 --> 00:19:59,160 Speaker 1: I started by asking Spen what was so special about 297 00:19:59,200 --> 00:20:05,639 Speaker 1: this report. They looked at how much of that skill 298 00:20:06,320 --> 00:20:11,600 Speaker 1: is also built inside the job called through the accumulation 299 00:20:11,640 --> 00:20:14,919 Speaker 1: of experience. And what we find is that about half 300 00:20:15,080 --> 00:20:17,960 Speaker 1: of the human capital, which is two thirds of the 301 00:20:18,080 --> 00:20:23,119 Speaker 1: humans wealth creation is actually coming from experience, which is 302 00:20:23,160 --> 00:20:26,240 Speaker 1: basically what you get after you're born and your endowment 303 00:20:26,280 --> 00:20:28,439 Speaker 1: of birth. But so it's lifetime earnings as well. So 304 00:20:28,480 --> 00:20:31,480 Speaker 1: we significate as an approximation. So basically you look at 305 00:20:31,640 --> 00:20:33,520 Speaker 1: how much does subbody to make in its total life 306 00:20:33,520 --> 00:20:36,320 Speaker 1: and if you take you come in and that would 307 00:20:36,320 --> 00:20:40,520 Speaker 1: be your starting salary. Let's they continued, with no additional experience, 308 00:20:40,560 --> 00:20:43,359 Speaker 1: no additional job gains or something like that, you would 309 00:20:43,359 --> 00:20:45,560 Speaker 1: be at half of what you would make as what 310 00:20:45,640 --> 00:20:48,359 Speaker 1: you gain through experience. And that we're not the earnings 311 00:20:48,480 --> 00:20:50,320 Speaker 1: is a proxy for that capital. It's it's not the 312 00:20:50,320 --> 00:20:52,240 Speaker 1: fundamental metric. This is the one that we found it 313 00:20:52,480 --> 00:20:54,919 Speaker 1: best to measure it. And just to go back a 314 00:20:54,920 --> 00:20:56,560 Speaker 1: little bit, so what what were you what were you 315 00:20:56,680 --> 00:20:59,880 Speaker 1: using to draw these conclusions? What data did you use. 316 00:21:00,080 --> 00:21:03,400 Speaker 1: We lose twenty years of profiles big data, four million 317 00:21:03,440 --> 00:21:08,600 Speaker 1: people's profiles from different countries US India, and we basically 318 00:21:09,160 --> 00:21:13,240 Speaker 1: knew what people had at formal education, what they got 319 00:21:13,280 --> 00:21:15,840 Speaker 1: as their starting salaries, and how they then progress for 320 00:21:15,840 --> 00:21:18,680 Speaker 1: twenty years through their jobs where they then ended up. 321 00:21:19,080 --> 00:21:22,080 Speaker 1: And we followed their job moves inside the companies that 322 00:21:22,119 --> 00:21:25,520 Speaker 1: they worked at and also rotating to other companies and 323 00:21:25,560 --> 00:21:28,359 Speaker 1: potentially coming back if you want. And so we learned 324 00:21:28,400 --> 00:21:31,359 Speaker 1: not only that experience was to have, but there were 325 00:21:31,359 --> 00:21:34,760 Speaker 1: a few other surprising results. One thing that surprised me 326 00:21:35,040 --> 00:21:39,840 Speaker 1: probably the most, is that the increase in human capital 327 00:21:39,920 --> 00:21:42,200 Speaker 1: due to experience is the most for the people who 328 00:21:42,200 --> 00:21:48,240 Speaker 1: have the least incoming. So the progression through experience is 329 00:21:48,240 --> 00:21:54,800 Speaker 1: the highest for counter workers stone Mason's crafts people. So 330 00:21:54,840 --> 00:21:57,120 Speaker 1: if you don't have a lot of formal education, you've 331 00:21:57,119 --> 00:22:00,480 Speaker 1: got you can have a much You actually keep relations 332 00:22:00,480 --> 00:22:03,199 Speaker 1: of skills and and so somehow they make more steps, 333 00:22:03,240 --> 00:22:05,400 Speaker 1: whereas if you come in as a dentist, you stay 334 00:22:05,400 --> 00:22:08,600 Speaker 1: a dentist. And then with the second surprise for us, 335 00:22:08,640 --> 00:22:11,440 Speaker 1: where there is a group of people about a third 336 00:22:11,480 --> 00:22:13,400 Speaker 1: in the US a quarter in India, if you take 337 00:22:13,440 --> 00:22:18,040 Speaker 1: that spectrum that just moves more so they accumulate their 338 00:22:18,080 --> 00:22:22,080 Speaker 1: experience faster by going from job to job inside the company, 339 00:22:22,200 --> 00:22:26,160 Speaker 1: sometimes rotating through other companies, and as a result, they 340 00:22:26,160 --> 00:22:29,760 Speaker 1: have a much faster experience game, which I think is 341 00:22:29,800 --> 00:22:33,359 Speaker 1: also draws an implication for what companies need to do 342 00:22:33,480 --> 00:22:37,399 Speaker 1: in terms of how they develop their people. Yeah, I 343 00:22:37,440 --> 00:22:40,919 Speaker 1: mean it's interesting. So McKenzie. They're obviously your clients are 344 00:22:41,000 --> 00:22:43,760 Speaker 1: usually businesses, and a lot of your reports tend to 345 00:22:43,800 --> 00:22:46,359 Speaker 1: focus on lessons for businesses and to some extent and 346 00:22:46,440 --> 00:22:49,040 Speaker 1: governments because you also work for governments. But this was 347 00:22:49,080 --> 00:22:51,480 Speaker 1: one that I read thinking, actually, it has a lot 348 00:22:51,480 --> 00:22:54,400 Speaker 1: of takeaways for individuals. You know, what are the sort 349 00:22:54,440 --> 00:22:56,440 Speaker 1: of broader lessons. It sounds like you should move around 350 00:22:56,520 --> 00:22:59,879 Speaker 1: a lot. I actually think these learnings are vestiprocal for 351 00:23:00,080 --> 00:23:04,600 Speaker 1: individual and the companies because the company doesn't that doesn't 352 00:23:04,600 --> 00:23:07,920 Speaker 1: allow their people to make steps and as a result, 353 00:23:07,960 --> 00:23:10,000 Speaker 1: basically going to deep end again and then learn again, 354 00:23:11,119 --> 00:23:14,960 Speaker 1: it doesn't help to further the human capital of their people, 355 00:23:14,960 --> 00:23:18,160 Speaker 1: and as a result, they're not helping furthering their company. 356 00:23:18,240 --> 00:23:20,720 Speaker 1: But if you are an individual and you say I'm 357 00:23:20,880 --> 00:23:22,440 Speaker 1: kind of comfortable at what I'm doing, and you don't 358 00:23:22,480 --> 00:23:24,960 Speaker 1: try yourself in the deep end, or at least try 359 00:23:25,040 --> 00:23:27,919 Speaker 1: to persuade your company that you work for to be 360 00:23:27,960 --> 00:23:30,600 Speaker 1: thrown to be deep end again and pick up an 361 00:23:30,600 --> 00:23:35,359 Speaker 1: next set of learnings. Um, then you're basically also not 362 00:23:35,400 --> 00:23:37,919 Speaker 1: making that development. So it's both responsibility the companies to 363 00:23:37,920 --> 00:23:40,000 Speaker 1: say we should be thinking about that, because you know, 364 00:23:40,119 --> 00:23:41,879 Speaker 1: it's easy for a company to say, let's keep the 365 00:23:41,920 --> 00:23:43,640 Speaker 1: person in the role they have because they do it well. 366 00:23:44,800 --> 00:23:47,119 Speaker 1: But if you want to step up your own human capital, 367 00:23:47,160 --> 00:23:48,520 Speaker 1: if you know it would be on the balance sheet 368 00:23:48,520 --> 00:23:50,680 Speaker 1: of a company, then the best way to manage the 369 00:23:50,720 --> 00:23:53,119 Speaker 1: balance sheet is to keep moving the people to the 370 00:23:53,119 --> 00:23:55,560 Speaker 1: next step where they again accumulate the next step of capital. 371 00:23:55,560 --> 00:23:57,560 Speaker 1: Who is talking about what you can do as an 372 00:23:57,560 --> 00:24:00,800 Speaker 1: individual or certainly as an employer to invest in yourself 373 00:24:00,840 --> 00:24:03,240 Speaker 1: in a given company. But I guess one of the 374 00:24:03,320 --> 00:24:08,200 Speaker 1: slightly hard even harder conclusions from this report is that 375 00:24:08,480 --> 00:24:11,520 Speaker 1: you should be letting people go and work for other 376 00:24:11,560 --> 00:24:14,520 Speaker 1: companies and other places. I mean, I'm someone who has 377 00:24:14,520 --> 00:24:16,399 Speaker 1: moved around a lot, but I'm conscious now that I 378 00:24:16,480 --> 00:24:20,040 Speaker 1: have people, you know, as part of a big team 379 00:24:20,080 --> 00:24:22,920 Speaker 1: at Bloomberg. You know, I don't part of me wants 380 00:24:22,960 --> 00:24:25,080 Speaker 1: to tell them go and get new jobs, but as 381 00:24:25,080 --> 00:24:28,240 Speaker 1: a business, we've not always been very comfortable with that. Yes, 382 00:24:28,320 --> 00:24:31,200 Speaker 1: so I'm not sure you should sort of proactively send 383 00:24:31,880 --> 00:24:34,320 Speaker 1: you the way. But if the best thing for a 384 00:24:34,400 --> 00:24:38,040 Speaker 1: person is to go, that doesn't mean they can't come back. 385 00:24:39,240 --> 00:24:41,840 Speaker 1: And in a way you should expect if you can 386 00:24:41,840 --> 00:24:44,879 Speaker 1: celebrate an experience game that is relevant to the return, 387 00:24:45,359 --> 00:24:48,399 Speaker 1: why would you not have that return? And I do 388 00:24:48,480 --> 00:24:50,760 Speaker 1: think there is a group of people that just feel 389 00:24:50,800 --> 00:24:53,879 Speaker 1: more comfortable to go into an experienced curve inside a 390 00:24:53,880 --> 00:24:56,480 Speaker 1: single company, and people that like that rotation and maybe 391 00:24:56,560 --> 00:24:59,800 Speaker 1: even develop skills faster. But why would you then say 392 00:24:59,800 --> 00:25:02,800 Speaker 1: you don't come back? Although one of the awkward conclusions 393 00:25:02,840 --> 00:25:05,080 Speaker 1: I think I'm reading right that if you want to actually, 394 00:25:05,119 --> 00:25:07,520 Speaker 1: if you want to maximize your income, and not everybody 395 00:25:07,560 --> 00:25:11,399 Speaker 1: wants to do that, then you are better off moving around. 396 00:25:11,520 --> 00:25:14,160 Speaker 1: Balder moves inside the company and balder moves across are 397 00:25:14,400 --> 00:25:18,720 Speaker 1: for the individual probably the best maximizing, at least for 398 00:25:18,760 --> 00:25:21,600 Speaker 1: that ball that we looked at. It's not so, it's 399 00:25:21,600 --> 00:25:23,760 Speaker 1: not it's a small group that actually doing that. We 400 00:25:23,800 --> 00:25:26,560 Speaker 1: think a lot these days about social mobility, And this 401 00:25:26,680 --> 00:25:29,679 Speaker 1: in a way is about micro social mobility. How do 402 00:25:29,720 --> 00:25:32,399 Speaker 1: people move up through jobs? And you say, you know 403 00:25:32,440 --> 00:25:35,600 Speaker 1: it's actually you're going to really struggle if you start 404 00:25:35,600 --> 00:25:38,240 Speaker 1: off as a cashier. There's a lip, probably a limit. 405 00:25:38,320 --> 00:25:40,199 Speaker 1: Will be very few people who will be able to 406 00:25:40,320 --> 00:25:43,920 Speaker 1: rise right to the top of an industry. But if 407 00:25:44,119 --> 00:25:47,520 Speaker 1: but you can do better by by moving and by 408 00:25:48,840 --> 00:25:53,080 Speaker 1: taking risks. I mean obviously a lot of people less advantage, people, 409 00:25:53,119 --> 00:25:59,240 Speaker 1: people with less education, will feel financially constrained from moving jobs, 410 00:25:59,600 --> 00:26:03,280 Speaker 1: from from taking risks, taking a job that they don't 411 00:26:03,280 --> 00:26:06,960 Speaker 1: necessarily have the skills for. So just from that social 412 00:26:06,960 --> 00:26:11,440 Speaker 1: mobility perspective, were there are there any conclusions here about 413 00:26:11,440 --> 00:26:13,639 Speaker 1: how should we address training, how should we make it 414 00:26:13,680 --> 00:26:16,080 Speaker 1: easier for people to move around? Well, the first point 415 00:26:16,119 --> 00:26:18,200 Speaker 1: I would make is when we say the experience gained 416 00:26:18,240 --> 00:26:22,000 Speaker 1: for the cashier is bigger than for the dentist, what 417 00:26:22,200 --> 00:26:23,920 Speaker 1: is that actually? So just if you look at it, 418 00:26:24,160 --> 00:26:28,919 Speaker 1: the cashier becomes departmental leader in the store, and if 419 00:26:28,920 --> 00:26:31,320 Speaker 1: they're really good, they might even be store leader. That's 420 00:26:31,359 --> 00:26:33,679 Speaker 1: how far they might not become the CEO of the company. 421 00:26:33,720 --> 00:26:36,879 Speaker 1: But that is two very big steps that the cashier 422 00:26:36,960 --> 00:26:40,000 Speaker 1: can make if you're starting point as a cashier, and 423 00:26:40,040 --> 00:26:42,199 Speaker 1: I think we should think about how do we celebrate that. 424 00:26:42,240 --> 00:26:44,600 Speaker 1: You can't only celebrate the person who came in from 425 00:26:44,720 --> 00:26:46,919 Speaker 1: university and became the CEO. Why don't we also have 426 00:26:47,320 --> 00:26:52,320 Speaker 1: narrative that this is significant progress and people make as 427 00:26:52,440 --> 00:26:56,520 Speaker 1: as you say, they gain more than their incoming earnings, 428 00:26:57,400 --> 00:26:59,600 Speaker 1: and that's not because they stay cashier. And you can 429 00:26:59,600 --> 00:27:02,480 Speaker 1: take that from the counter to chef, from sus chef, 430 00:27:02,800 --> 00:27:04,520 Speaker 1: as you come in as a sus chef and you 431 00:27:04,600 --> 00:27:09,280 Speaker 1: become chef. It's these paths that have quite some brange 432 00:27:09,760 --> 00:27:13,199 Speaker 1: that we should celebrate. And it's not all high school, university, 433 00:27:13,600 --> 00:27:15,520 Speaker 1: n b A. And so you know, that's of course 434 00:27:15,560 --> 00:27:18,679 Speaker 1: where the elites will spend their time thinking. But I 435 00:27:18,680 --> 00:27:21,880 Speaker 1: think for a large group of people, these steps are 436 00:27:22,000 --> 00:27:25,840 Speaker 1: very important and we should find ways to celebrate them, 437 00:27:26,200 --> 00:27:29,440 Speaker 1: create narratives around them, and we should celebrate them equally. 438 00:27:29,520 --> 00:27:31,840 Speaker 1: Then you know some of you who came and CEO story, 439 00:27:32,000 --> 00:27:33,879 Speaker 1: and then I think that will provide a little bit 440 00:27:33,880 --> 00:27:36,080 Speaker 1: more context to people, because otherwise people say, I've become 441 00:27:36,080 --> 00:27:38,960 Speaker 1: a sou chef and that's what I am, But the 442 00:27:39,000 --> 00:27:43,280 Speaker 1: su chef many actually move up. Many move up, and 443 00:27:43,280 --> 00:27:56,400 Speaker 1: that's what this data suggest spend. Thank you very much. Well, 444 00:27:56,440 --> 00:27:58,520 Speaker 1: that's it for this episode of Stephanomics. Will be back 445 00:27:58,560 --> 00:28:00,720 Speaker 1: next week, but in the meantime to please rate the 446 00:28:00,720 --> 00:28:03,480 Speaker 1: show if you like it, and check out the Bloomberg 447 00:28:03,680 --> 00:28:07,520 Speaker 1: Terminal and News website for more economic news and views 448 00:28:07,560 --> 00:28:10,600 Speaker 1: on the global economy. You can also follow at economics 449 00:28:10,640 --> 00:28:13,960 Speaker 1: on Twitter. This episode was produced by Magnus Hendrickson, with 450 00:28:14,040 --> 00:28:17,639 Speaker 1: special thanks to Maya Ava Book, Juan Pablo Spinetto, and 451 00:28:17,760 --> 00:28:22,240 Speaker 1: Sven Smith. Mike Sasso is executive producer of Stephanomics and 452 00:28:22,280 --> 00:28:24,920 Speaker 1: the head of Bloomberg Podcasts is Francesco Levi.