WEBVTT - Why This Coming American Summit May Blow Up for Biden 0:00:00.440 --> 0:00:04.720 We come here to begin a new era, an era 0:00:04.960 --> 0:00:11.319 of real promise. In this meeting, for these days, we 0:00:11.360 --> 0:00:16.080 have put our people first, and we have thought about tomorrow. 0:00:17.480 --> 0:00:20.760 We are bound together by geography, by history, by culture, 0:00:21.800 --> 0:00:27.120 but most important now by shared values. We have tried 0:00:27.160 --> 0:00:31.000 to give life to these values at this summit by 0:00:31.120 --> 0:00:34.360 agreeing to create a free trade area throughout our hemisphere, 0:00:35.479 --> 0:00:38.400 to bring together our nations, to improve the quality of 0:00:38.440 --> 0:00:42.479 life for our peoples, and to strengthen and make permanent 0:00:42.640 --> 0:00:47.120 the march of democracy. This is more than words. This 0:00:47.240 --> 0:00:59.959 is a commitment to deeds. Hello, and welcome to Stephaniel. 0:01:00.000 --> 0:01:02.080 It's the podcast that brings the global economy to you. 0:01:02.280 --> 0:01:05.720 And that was President Bill Clinton at the closing ceremony 0:01:05.720 --> 0:01:08.640 of the First Summit of the America's which he convened 0:01:08.720 --> 0:01:13.800 in Miami. As you heard there, it was supposed to 0:01:13.880 --> 0:01:17.080 mark the beginning of a new era of cooperation across 0:01:17.160 --> 0:01:20.560 the America's. In fact, all it started was a tradition 0:01:20.600 --> 0:01:23.800 of holding these summits every few years, which generally didn't 0:01:23.840 --> 0:01:27.760 achieve much. That free trade area of the America's that 0:01:27.880 --> 0:01:32.639 went nowhere, and the US hasn't hosted another one until now. 0:01:33.120 --> 0:01:36.080 With President Biden holding his own summ into the America's 0:01:36.120 --> 0:01:39.480 in just a few days time in Los Angeles. The 0:01:39.600 --> 0:01:42.919 guest list, though, is still in doubt to be honest. 0:01:43.080 --> 0:01:46.440 So are those shared values President Clinton talked about back 0:01:46.480 --> 0:01:49.320 in ninety four. I'm going to talk about all that 0:01:49.440 --> 0:01:52.640 later with Juan Bablo Spinetto, who runs all of Bloomberg's 0:01:52.680 --> 0:01:56.320 economic and government coverage in Latin America. After that, we 0:01:56.360 --> 0:01:58.720 also have a chat with one of the authors of 0:01:58.720 --> 0:02:01.720 a major new report about where we get our human 0:02:01.760 --> 0:02:05.320 capital from. It's not where you might think, it turns out. 0:02:06.000 --> 0:02:09.359 But first, here's our Mexico City based reports, admire Ather 0:02:09.480 --> 0:02:12.560 buch To explain why plans for this summit are in 0:02:12.680 --> 0:02:32.040 such a mess. Episode is in momento. The it's in momento. 0:02:32.280 --> 0:02:43.720 The initial in lais the America. You are said only 0:02:43.840 --> 0:02:50.480 him Blomundo. That was Andress Manuel Lopez Brador, also known 0:02:50.520 --> 0:02:54.919 as Amlo, the popular and populous President of Mexico, expressing 0:02:54.919 --> 0:02:59.000 his support for a new era of cooperation throughout the America's. 0:03:00.480 --> 0:03:03.919 In fact, improving relations across the region is a key 0:03:03.919 --> 0:03:08.160 objective for President Joe Biden too. He needs the support 0:03:08.200 --> 0:03:11.520 of Mexico and its Latin American neighbors to prevent the 0:03:11.600 --> 0:03:15.120 persistent of rival of migrants at the US's southern border 0:03:15.200 --> 0:03:19.800 from becoming a political problem. However, a meeting of the 0:03:19.840 --> 0:03:23.760 region's leaders next week in Los Angeles is looking less 0:03:23.800 --> 0:03:27.280 like an opportunity to men defences and more like a 0:03:27.360 --> 0:03:32.640 political fiasco. The US is hosting the Summit of the 0:03:32.680 --> 0:03:35.840 America's for the first time since the summits founding in 0:03:37.680 --> 0:03:40.000 and on the eve of the event, not all of 0:03:40.000 --> 0:03:44.960 the would be participants have accepted their invitations. At the 0:03:45.000 --> 0:03:48.080 top of the list of holdouts is am Loo, who 0:03:48.080 --> 0:03:51.200 has threatened to boycott the event unless the US also 0:03:51.240 --> 0:03:56.800 invites Venezuela, Nicaragua, and Cuba. For now, inviting the heads 0:03:56.800 --> 0:03:59.360 of those three nations is a non starter for the 0:03:59.400 --> 0:04:04.520 Biden and illustration. The standoff is exposing the fault lines 0:04:04.760 --> 0:04:09.240 across the America's, including a desire by leaders in the 0:04:09.280 --> 0:04:13.320 region for the US to stop imposing its political vision. 0:04:14.080 --> 0:04:20.640 Here's Andres Rosenthal, a Mexican career diplomat. The history goes 0:04:20.680 --> 0:04:28.599 back to four when the US decided to convene the 0:04:28.680 --> 0:04:35.000 first Summit of the America's basically with the clear intention 0:04:35.920 --> 0:04:42.400 of trying to gauge interest in the region for an integration, 0:04:43.440 --> 0:04:50.000 a economic integration of the America's somewhat similar to the 0:04:50.000 --> 0:04:55.160 European Union. UH. It was not successful. There were too 0:04:55.160 --> 0:05:01.839 many differing views regarding the possibility of integration, as I'm 0:05:01.880 --> 0:05:05.200 sure they still there still are today. It's the first 0:05:05.240 --> 0:05:08.280 time that the United States hosts the Summit of the 0:05:08.320 --> 0:05:14.320 America since it was clear to my mind at least 0:05:14.400 --> 0:05:19.720 that this was an attempt by President Biden to reaffirm 0:05:20.880 --> 0:05:25.320 US interest in the region, uh, notwithstanding all of the 0:05:25.360 --> 0:05:30.000 other distractions going on, and to be able to bring 0:05:30.600 --> 0:05:35.120 the leadership of the region to Los Angeles in order 0:05:35.160 --> 0:05:43.960 to discuss issues such as migration, economic competitiveness, climate change. 0:05:44.920 --> 0:05:47.279 But we haven't even gotten to the part where leaders 0:05:47.320 --> 0:05:51.839 can discuss crucial issues. First, Latin America's leaders need to 0:05:51.880 --> 0:05:56.720 show up. Almost says if Biden does not treat all 0:05:56.760 --> 0:05:59.960 countries equally, he will send his foreign affairs men as 0:06:00.120 --> 0:06:03.400 or to the summit, but the Mexican president himself will 0:06:03.440 --> 0:06:07.560 stay home. Meanwhile, other countries have said they refused to go. 0:06:08.440 --> 0:06:10.760 Qubas president said he would not go even if he 0:06:10.839 --> 0:06:13.760 did get an invite. Guatemala has made a fuss over 0:06:13.839 --> 0:06:17.679 US criticism of its justice system, and Honduras as president 0:06:17.760 --> 0:06:20.360 said she would not go if other leaders were left out. 0:06:21.920 --> 0:06:25.480 The question for Biden is whether a lackluster turnout is 0:06:25.640 --> 0:06:28.560 enough or if the boycott by some nations is one 0:06:28.640 --> 0:06:34.000 snub too many. Guala Lupea Cabrera, a political scientist and 0:06:34.160 --> 0:06:38.560 migration scholar at George Mason University, says the hubbub is 0:06:38.600 --> 0:06:40.960 a sign of the loss of US influence in the 0:06:41.040 --> 0:06:44.640 region and it comes at a tricky time for the 0:06:44.680 --> 0:06:48.920 Biden administration. The u s midterm elections are in November, 0:06:49.400 --> 0:06:52.800 and they will determine whether Biden's Democratic Party retains its 0:06:52.800 --> 0:06:57.120 majority in Congress. The US is concerned in Latin America's 0:06:57.120 --> 0:06:59.880 whether Mexico and its neighbors will help block migration and 0:07:00.040 --> 0:07:03.520 boost trade. But almost he's standing up to Biden as 0:07:03.520 --> 0:07:06.880 a winning political strategy that could help his own party 0:07:06.880 --> 0:07:11.800 in the upcoming Mexican regional elections and later on. The 0:07:12.360 --> 0:07:17.000 current administration is thinking about a midterm elections and also 0:07:17.520 --> 0:07:22.920 UH stability in terms of diplomacy and a hemispheric stability. 0:07:23.240 --> 0:07:27.120 It's important for for the Democrats in a very complicated 0:07:27.480 --> 0:07:31.760 electoral process that will probably not result in big in 0:07:31.760 --> 0:07:35.320 a big victory for them. On the contrary, so at 0:07:35.320 --> 0:07:39.520 this point also migration, it's it's at the center probably 0:07:39.560 --> 0:07:43.720 of the discussion, considering that a number of people from 0:07:43.800 --> 0:07:47.240 different parts of the world start a journey in different 0:07:47.240 --> 0:07:50.720 parts of South America, and we have the problems in 0:07:50.800 --> 0:07:55.680 Central America that have been magnified because of COVID nineteen pandemic. 0:07:56.000 --> 0:07:58.560 The pandemic has been a time of big change in 0:07:58.640 --> 0:08:01.440 Latin America and many of the leaders who have been 0:08:01.480 --> 0:08:03.880 invited to the summit I have never met one another 0:08:04.600 --> 0:08:07.440 in these two years. Chile elected at three five year 0:08:07.480 --> 0:08:10.960 old leftist Colombians voted in a first round election for 0:08:11.000 --> 0:08:14.800 a Garia fighter turned mayor, and Brazil lost its love 0:08:15.200 --> 0:08:20.440 for the conservative and brash Yeah Tonto Honduras, his former president, 0:08:20.480 --> 0:08:24.320 got extradited to the US on drug trafficking charges, a 0:08:24.440 --> 0:08:29.200 huge fall from Grace, and Mexicans cemented their support for Amlo, 0:08:29.400 --> 0:08:32.880 who has frequently criticized the US for its intervention in 0:08:32.960 --> 0:08:37.080 Mexico security and energy affairs, while calling for more US 0:08:37.160 --> 0:08:42.920 investment at a time when economic recovery has been too slow. Rosenthal, 0:08:43.000 --> 0:08:46.200 the diplomat says the embarrassing debate over whether or not 0:08:46.240 --> 0:08:50.000 to attend the summit could have been avoided. The US government, 0:08:50.040 --> 0:08:53.959 the White House has mismanaged this issue because they should 0:08:54.000 --> 0:08:57.160 have foreseen this from the very beginning, and they should 0:08:57.160 --> 0:09:01.000 have made whatever efforts needed to be made, either not 0:09:01.120 --> 0:09:03.240 to hold the summit if they weren't going to invite 0:09:03.280 --> 0:09:07.400 some of the countries of the region, or to find 0:09:07.480 --> 0:09:12.200 some solution before they it became a political heart patago. 0:09:13.720 --> 0:09:18.520 The Biden administration's objection to hosting Venezuela, Nicaragua, and Cuba 0:09:18.720 --> 0:09:23.840 centers on its characterization of those countries as undemocratic. To 0:09:23.960 --> 0:09:27.679 be sure, though the US has negotiated with the countries 0:09:27.720 --> 0:09:32.000 on its no fly list in the past. Vanessa Rubio Marquez, 0:09:32.080 --> 0:09:35.640 who once worked in Mexico's Foreign Affairs ministry, remembers what 0:09:35.720 --> 0:09:39.400 it looked like when the United States was just another participant. 0:09:39.640 --> 0:09:42.560 I was in that very historic moment in which a 0:09:42.640 --> 0:09:47.840 President Castro shook hands with back then President Obama. I 0:09:47.920 --> 0:09:51.200 was in twenty in Panama at another summit of the 0:09:51.200 --> 0:09:55.400 America's So I guess what what a president man had 0:09:55.400 --> 0:09:58.880 in mind was the possibility of having once again all 0:09:58.960 --> 0:10:02.280 of the countries of the Amisphere invited to the stummits. 0:10:02.520 --> 0:10:06.520 But of course, in the context of this very divided 0:10:07.200 --> 0:10:11.560 Latin America, what has been happening is that countries have 0:10:11.720 --> 0:10:24.120 cited one way or the other. So we can get 0:10:24.160 --> 0:10:28.119 a bit more context now. From Juan Pablo spinetto Bloomberg 0:10:28.120 --> 0:10:33.079 Managing editor for Economics and Government, Maya's boss JP, thanks 0:10:33.080 --> 0:10:37.000 for coming on, Stephanomics. We've had some of the history 0:10:37.160 --> 0:10:41.200 in that piece. But the plasmo the guest list for 0:10:41.240 --> 0:10:45.280 these summits has always been a problem, hasn't it always? 0:10:45.320 --> 0:10:48.640 And thanks for the invitation, Stephanie. Um. You know, the 0:10:48.760 --> 0:10:52.640 issue of Cuba has been for decades, very sensitive, obviously, 0:10:53.120 --> 0:10:56.520 and you have guessed that the White House thought about 0:10:56.559 --> 0:11:01.000 it before, but it didn't and uh show up and 0:11:01.120 --> 0:11:04.880 exploded when I'm law decided to play politics and say, okay, 0:11:04.960 --> 0:11:09.079 if you don't invite these guys Cuba, Venezuela and Nicaraga, 0:11:09.160 --> 0:11:11.240 I'm basically not going to go to this meeting, which 0:11:11.280 --> 0:11:14.520 put the White House in a very tough position. When 0:11:14.520 --> 0:11:16.120 I was looking back at some of the sort of 0:11:16.160 --> 0:11:18.640 colorful history of some of these meetings that even before 0:11:18.679 --> 0:11:21.080 the Summit of the America's There was a There was 0:11:21.120 --> 0:11:27.000 a North South summit in Cancoon in Mexico in nineteen one, 0:11:27.080 --> 0:11:30.680 which which famously also caused all the same issues around 0:11:31.280 --> 0:11:34.640 whether or not Castro could come. So remind me what 0:11:34.760 --> 0:11:38.240 happened there exactly. It happened the same as you know now. 0:11:38.679 --> 0:11:42.640 That was forty years ago. Ronald Reagan was going to Cancun. 0:11:42.760 --> 0:11:46.600 That put Mexico in a tight spot because they needed 0:11:46.640 --> 0:11:49.760 to decide what to do with Cuba. Mexico has always 0:11:49.800 --> 0:11:52.640 been very friendly to to Cuba during the p r 0:11:52.720 --> 0:11:57.120 I years, and so the solution they came up was, Okay, 0:11:57.160 --> 0:11:59.800 we're not gonna invite Fidel Castro, but we're gonna in 0:12:00.040 --> 0:12:03.640 white team. A few days before to a meeting in Costmel, 0:12:04.280 --> 0:12:07.840 So the president at the time, Lopes Potio, called Fidel 0:12:07.960 --> 0:12:12.439 to make the invitation and he traveled by ship by 0:12:12.480 --> 0:12:16.200 a navy yacht from the island to Costomel, which is 0:12:16.240 --> 0:12:19.760 also an island in the Caribbean. Cost of Mexico held 0:12:19.760 --> 0:12:24.280 a meeting. Cosmo is actually rather nice than Cancoon. Fantastic, 0:12:24.360 --> 0:12:26.960 fantastic place. And I actually I think they met a 0:12:26.960 --> 0:12:31.120 few times there in Costumel and um and they had 0:12:31.120 --> 0:12:34.480 a meeting there. So Mexico has always been doing that 0:12:34.640 --> 0:12:37.400 balance right, knowing that they can get on a fight 0:12:37.520 --> 0:12:39.720 with the US, but at the same time, you know, 0:12:39.840 --> 0:12:43.040 making their point, their stands and showing that they are 0:12:43.080 --> 0:12:47.080 allies with the Cuban regime. And coming back to today, 0:12:47.080 --> 0:12:49.240 when you think of sort of more broadly among Latin 0:12:49.280 --> 0:12:53.840 American leaders, do they think this summit by President Biden 0:12:53.960 --> 0:12:56.880 is entirely politically motivated and to do with the u 0:12:56.960 --> 0:12:58.920 s midterms or do you think they give him some 0:12:59.000 --> 0:13:02.520 benefit of the doubt that he wants to support integration 0:13:02.600 --> 0:13:05.760 across the region. I think it's a bit confusing the 0:13:06.040 --> 0:13:09.960 message that the US is sending, because obviously it's nice 0:13:10.000 --> 0:13:13.200 to be invited, but we haven't seen a strong agenda 0:13:13.360 --> 0:13:17.280 so far. There were we reported, you know, the interests 0:13:17.320 --> 0:13:21.000 of the White House to focus on trade, but you 0:13:21.080 --> 0:13:25.040 need deliverables, right. One of the reasons why the the 0:13:25.240 --> 0:13:28.720 Brazilian presidents didn't want to go to la had nothing 0:13:28.720 --> 0:13:32.120 to do with Cuba, obviously, but because of his internal reasons, 0:13:32.360 --> 0:13:35.640 and he is fighting a very tough re election campaign 0:13:36.320 --> 0:13:38.800 and his point was what it is for me to 0:13:38.880 --> 0:13:41.600 go to l A, which is twelve hours away from 0:13:41.600 --> 0:13:44.960 Brazilia to meet with Biden who never pick up the 0:13:44.960 --> 0:13:48.720 phone and talk to me until now. And we're not 0:13:48.720 --> 0:13:53.200 gonna get anything, but you know, a photoshop. Um. So 0:13:53.760 --> 0:13:57.360 the Origion expects, uh, you know, more concrete steps and 0:13:57.480 --> 0:14:01.680 not just to be you know, lecture about migration. Basically, 0:14:02.559 --> 0:14:03.719 you and I were in I mean I was in 0:14:03.800 --> 0:14:06.199 Mexico with you a couple of weeks ago and we 0:14:06.320 --> 0:14:08.840 talked about this. You know, if when you don't spend 0:14:08.840 --> 0:14:13.079 time there, you don't realize quite how strange in some 0:14:13.120 --> 0:14:15.959 ways the President Amlo is. You know, he's not a 0:14:16.040 --> 0:14:18.679 sort of tradition he's a populist, but he's not traditionally 0:14:18.800 --> 0:14:21.520 left wing. He had a very tight fiscal policy, didn't 0:14:21.520 --> 0:14:25.080 spend a lot during COVID. He's very dedicated to these 0:14:25.120 --> 0:14:28.120 kind of big projects, quite old fashioned projects, like building 0:14:28.160 --> 0:14:32.840 a big new petrol refinery. Do you think the Americans 0:14:32.880 --> 0:14:37.280 even sort of know what to make of Amlo or 0:14:37.920 --> 0:14:40.480 do they understand what makes his government tick or does 0:14:40.520 --> 0:14:43.480 anyone understand what makes his government take I think you know, 0:14:43.760 --> 0:14:46.960 they do in a way, um, in the sense of 0:14:47.920 --> 0:14:52.080 they have been very respectful, to be honest of of 0:14:52.480 --> 0:14:57.160 Mexico's autonomy and that's something that even Amlow recognized and 0:14:57.280 --> 0:15:02.440 he's very um grateful for. Uh. He always talked about this, 0:15:02.520 --> 0:15:05.440 and this is very important to any Mexican president right 0:15:05.520 --> 0:15:09.360 the the the appearance of negotiating as a as as 0:15:09.360 --> 0:15:14.160 spears and not a not as being imposed by the 0:15:14.280 --> 0:15:19.760 US right now, it's a very difficult negotiation because in 0:15:19.840 --> 0:15:23.240 a way for the US, the only thing that matters 0:15:23.400 --> 0:15:28.040 right now is migration, and especially not having a migration 0:15:28.120 --> 0:15:32.920 crisis during the midterm. So uh that you know, on 0:15:32.920 --> 0:15:39.080 one side, um prevents the development of other projects, but 0:15:39.120 --> 0:15:42.040 at the same time gives some a lot more leeway 0:15:42.200 --> 0:15:48.360 to play his own cards, right knowing that by containing migration, uh, 0:15:48.400 --> 0:15:51.560 the Americans will be happy. I mean, if we step back, 0:15:51.640 --> 0:15:54.160 the other thing that we probably talked about even more 0:15:54.160 --> 0:15:56.080 when we were in Mexico, it was not anything to 0:15:56.080 --> 0:15:58.360 do with the summit. Anything that's going to happen in 0:15:58.360 --> 0:16:02.400 in Los Angeles is but what's happening in Washington and 0:16:02.520 --> 0:16:06.840 precisely what's happening inside the Federal Reserve. I mean this Historically, 0:16:07.600 --> 0:16:11.880 a period of rising US interest rates has been bad 0:16:11.960 --> 0:16:15.200 news for many countries. In Latin America, and certainly we 0:16:15.240 --> 0:16:20.040 saw in the eighties and in the mid nineties when 0:16:20.120 --> 0:16:24.200 the US was increasing interest rates making money more expensive, 0:16:24.600 --> 0:16:26.760 it was a lot of countries in Latin America that 0:16:26.880 --> 0:16:29.680 ended up paying a heavy price for that. So is 0:16:29.720 --> 0:16:35.120 that How worried are people in Mexico and around the 0:16:35.200 --> 0:16:39.840 region about that possibility? Now? Of course? Uh, you know 0:16:40.080 --> 0:16:43.240 here something very interesting happening, which is the Latin Riican 0:16:43.320 --> 0:16:47.320 central banks were the first ones to move. Brasil started 0:16:47.360 --> 0:16:51.760 to increase the interest rates um in March last year, 0:16:52.560 --> 0:16:56.120 so and the tightening cycle has been very aggressive so far. 0:16:56.680 --> 0:16:59.600 So by the time they these years started to move, 0:17:00.080 --> 0:17:03.200 Latin America already created a cushion that you know, you 0:17:03.240 --> 0:17:08.480 can see it basically in stronger exchange rates. Uh, that 0:17:09.320 --> 0:17:13.080 you know, at the same time prevented the capital outflows 0:17:13.119 --> 0:17:17.480 that tend to generate those crises UM as we saw 0:17:17.480 --> 0:17:21.000 in the past. Now, to me, the answer here, the 0:17:21.040 --> 0:17:24.320 main point is how far the fat is ready to go. 0:17:24.640 --> 0:17:27.479 I think if we if the titaning cycle in the 0:17:27.600 --> 0:17:30.800 US is something reasonable and we start to see inflation 0:17:30.880 --> 0:17:33.520 coming down, even even if it's not getting to two 0:17:33.560 --> 0:17:38.040 percent anytime soon, Latin America will be uh in as 0:17:38.040 --> 0:17:43.040 safe as safer place than you have imagined, um, considering 0:17:43.280 --> 0:17:48.000 the scope of this cycle now, and that's interesting to 0:17:48.119 --> 0:17:50.479 be may not of course people's radar that actually that 0:17:50.520 --> 0:17:54.240 the many of the major central banks in Latin America, 0:17:54.320 --> 0:17:58.160 certainly in Mexico, had raised interest rates long before the FATS, 0:17:58.240 --> 0:18:01.200 And we're ahead of the game when we spend time 0:18:01.240 --> 0:18:04.879 criticizing the FED for having got behind the curb. So finally, JP, 0:18:05.080 --> 0:18:06.760 I mean, you've you know, you've been around the block 0:18:06.800 --> 0:18:08.800 a few times, if I may say that, you've seen 0:18:08.880 --> 0:18:11.440 some of these summits come and go. Do you think 0:18:11.440 --> 0:18:15.640 it's salable, salvageable? Do you think that the Mexican president 0:18:15.680 --> 0:18:17.439 in the end will go to l A? What do 0:18:17.440 --> 0:18:19.679 you think he may not go? I mean, it's funny 0:18:19.720 --> 0:18:21.840 he said, you know, he may design next week on 0:18:21.880 --> 0:18:24.320 the spot, and he's not very far from l A, 0:18:25.560 --> 0:18:29.200 so he it's a flexible ticket. He even joke up stuff. 0:18:29.880 --> 0:18:32.400 He even joke about flying to Tijuana and taking a car. 0:18:33.240 --> 0:18:35.880 But you know, I think it's salvageable in the sense 0:18:35.880 --> 0:18:37.879 of it's going to happen. The president who will be 0:18:37.920 --> 0:18:40.520 there if I'm not doesn't go, it will be mostly 0:18:40.960 --> 0:18:44.840 his mistake or he's you know, he will be losing out. 0:18:44.920 --> 0:18:47.840 I think in the end if everybody else go, I 0:18:47.840 --> 0:18:50.359 don't think we're gonna see a lot of the little 0:18:50.400 --> 0:18:53.560 bubbles um that's the main thing. But we're gonna have 0:18:53.600 --> 0:18:56.439 a meeting, We're going to have a photo and you know, 0:18:56.520 --> 0:19:00.639 somebody laterals and that's always interesting and well. It certainly 0:19:00.680 --> 0:19:03.240 goes along with the long tradition of photo ops that 0:19:03.359 --> 0:19:05.960 these of these summits, but not a lot of deliverable 0:19:05.960 --> 0:19:08.000 as well for those people who are waiting in tenter 0:19:08.040 --> 0:19:10.320 hooks to see how this summit of the America's goes down. 0:19:10.359 --> 0:19:13.480 We will potentially be talking to Maya from l A 0:19:14.280 --> 0:19:17.360 next week. But Juan Pablo Spinda, thank you very much. 0:19:17.480 --> 0:19:28.000 Thank you. I'm not a person I caught up with 0:19:28.040 --> 0:19:30.680 in devils. The other day was Spen Smid, the director 0:19:30.720 --> 0:19:34.160 and chair of the McKinsey Global Institute. And the institute 0:19:34.200 --> 0:19:37.600 puts out reports which usually draw on enormous amounts of 0:19:37.680 --> 0:19:41.280 data and experience to say something interesting about the world. 0:19:41.640 --> 0:19:44.600 And they've just published a big one about human capital 0:19:44.760 --> 0:19:48.280 and the value of experience. It's based on the careers 0:19:48.359 --> 0:19:53.040 of four million workers in several countries. Human capital is 0:19:53.080 --> 0:19:55.800 one of those phrases that politicians talk about a lot. 0:19:56.200 --> 0:19:59.160 I started by asking Spen what was so special about 0:19:59.200 --> 0:20:05.639 this report. They looked at how much of that skill 0:20:06.320 --> 0:20:11.600 is also built inside the job called through the accumulation 0:20:11.640 --> 0:20:14.919 of experience. And what we find is that about half 0:20:15.080 --> 0:20:17.960 of the human capital, which is two thirds of the 0:20:18.080 --> 0:20:23.119 humans wealth creation is actually coming from experience, which is 0:20:23.160 --> 0:20:26.240 basically what you get after you're born and your endowment 0:20:26.280 --> 0:20:28.439 of birth. But so it's lifetime earnings as well. So 0:20:28.480 --> 0:20:31.480 we significate as an approximation. So basically you look at 0:20:31.640 --> 0:20:33.520 how much does subbody to make in its total life 0:20:33.520 --> 0:20:36.320 and if you take you come in and that would 0:20:36.320 --> 0:20:40.520 be your starting salary. Let's they continued, with no additional experience, 0:20:40.560 --> 0:20:43.359 no additional job gains or something like that, you would 0:20:43.359 --> 0:20:45.560 be at half of what you would make as what 0:20:45.640 --> 0:20:48.359 you gain through experience. And that we're not the earnings 0:20:48.480 --> 0:20:50.320 is a proxy for that capital. It's it's not the 0:20:50.320 --> 0:20:52.240 fundamental metric. This is the one that we found it 0:20:52.480 --> 0:20:54.919 best to measure it. And just to go back a 0:20:54.920 --> 0:20:56.560 little bit, so what what were you what were you 0:20:56.680 --> 0:20:59.880 using to draw these conclusions? What data did you use. 0:21:00.080 --> 0:21:03.400 We lose twenty years of profiles big data, four million 0:21:03.440 --> 0:21:08.600 people's profiles from different countries US India, and we basically 0:21:09.160 --> 0:21:13.240 knew what people had at formal education, what they got 0:21:13.280 --> 0:21:15.840 as their starting salaries, and how they then progress for 0:21:15.840 --> 0:21:18.680 twenty years through their jobs where they then ended up. 0:21:19.080 --> 0:21:22.080 And we followed their job moves inside the companies that 0:21:22.119 --> 0:21:25.520 they worked at and also rotating to other companies and 0:21:25.560 --> 0:21:28.359 potentially coming back if you want. And so we learned 0:21:28.400 --> 0:21:31.359 not only that experience was to have, but there were 0:21:31.359 --> 0:21:34.760 a few other surprising results. One thing that surprised me 0:21:35.040 --> 0:21:39.840 probably the most, is that the increase in human capital 0:21:39.920 --> 0:21:42.200 due to experience is the most for the people who 0:21:42.200 --> 0:21:48.240 have the least incoming. So the progression through experience is 0:21:48.240 --> 0:21:54.800 the highest for counter workers stone Mason's crafts people. So 0:21:54.840 --> 0:21:57.120 if you don't have a lot of formal education, you've 0:21:57.119 --> 0:22:00.480 got you can have a much You actually keep relations 0:22:00.480 --> 0:22:03.199 of skills and and so somehow they make more steps, 0:22:03.240 --> 0:22:05.400 whereas if you come in as a dentist, you stay 0:22:05.400 --> 0:22:08.600 a dentist. And then with the second surprise for us, 0:22:08.640 --> 0:22:11.440 where there is a group of people about a third 0:22:11.480 --> 0:22:13.400 in the US a quarter in India, if you take 0:22:13.440 --> 0:22:18.040 that spectrum that just moves more so they accumulate their 0:22:18.080 --> 0:22:22.080 experience faster by going from job to job inside the company, 0:22:22.200 --> 0:22:26.160 sometimes rotating through other companies, and as a result, they 0:22:26.160 --> 0:22:29.760 have a much faster experience game, which I think is 0:22:29.800 --> 0:22:33.359 also draws an implication for what companies need to do 0:22:33.480 --> 0:22:37.399 in terms of how they develop their people. Yeah, I 0:22:37.440 --> 0:22:40.919 mean it's interesting. So McKenzie. They're obviously your clients are 0:22:41.000 --> 0:22:43.760 usually businesses, and a lot of your reports tend to 0:22:43.800 --> 0:22:46.359 focus on lessons for businesses and to some extent and 0:22:46.440 --> 0:22:49.040 governments because you also work for governments. But this was 0:22:49.080 --> 0:22:51.480 one that I read thinking, actually, it has a lot 0:22:51.480 --> 0:22:54.400 of takeaways for individuals. You know, what are the sort 0:22:54.440 --> 0:22:56.440 of broader lessons. It sounds like you should move around 0:22:56.520 --> 0:22:59.879 a lot. I actually think these learnings are vestiprocal for 0:23:00.080 --> 0:23:04.600 individual and the companies because the company doesn't that doesn't 0:23:04.600 --> 0:23:07.920 allow their people to make steps and as a result, 0:23:07.960 --> 0:23:10.000 basically going to deep end again and then learn again, 0:23:11.119 --> 0:23:14.960 it doesn't help to further the human capital of their people, 0:23:14.960 --> 0:23:18.160 and as a result, they're not helping furthering their company. 0:23:18.240 --> 0:23:20.720 But if you are an individual and you say I'm 0:23:20.880 --> 0:23:22.440 kind of comfortable at what I'm doing, and you don't 0:23:22.480 --> 0:23:24.960 try yourself in the deep end, or at least try 0:23:25.040 --> 0:23:27.919 to persuade your company that you work for to be 0:23:27.960 --> 0:23:30.600 thrown to be deep end again and pick up an 0:23:30.600 --> 0:23:35.359 next set of learnings. Um, then you're basically also not 0:23:35.400 --> 0:23:37.919 making that development. So it's both responsibility the companies to 0:23:37.920 --> 0:23:40.000 say we should be thinking about that, because you know, 0:23:40.119 --> 0:23:41.879 it's easy for a company to say, let's keep the 0:23:41.920 --> 0:23:43.640 person in the role they have because they do it well. 0:23:44.800 --> 0:23:47.119 But if you want to step up your own human capital, 0:23:47.160 --> 0:23:48.520 if you know it would be on the balance sheet 0:23:48.520 --> 0:23:50.680 of a company, then the best way to manage the 0:23:50.720 --> 0:23:53.119 balance sheet is to keep moving the people to the 0:23:53.119 --> 0:23:55.560 next step where they again accumulate the next step of capital. 0:23:55.560 --> 0:23:57.560 Who is talking about what you can do as an 0:23:57.560 --> 0:24:00.800 individual or certainly as an employer to invest in yourself 0:24:00.840 --> 0:24:03.240 in a given company. But I guess one of the 0:24:03.320 --> 0:24:08.200 slightly hard even harder conclusions from this report is that 0:24:08.480 --> 0:24:11.520 you should be letting people go and work for other 0:24:11.560 --> 0:24:14.520 companies and other places. I mean, I'm someone who has 0:24:14.520 --> 0:24:16.399 moved around a lot, but I'm conscious now that I 0:24:16.480 --> 0:24:20.040 have people, you know, as part of a big team 0:24:20.080 --> 0:24:22.920 at Bloomberg. You know, I don't part of me wants 0:24:22.960 --> 0:24:25.080 to tell them go and get new jobs, but as 0:24:25.080 --> 0:24:28.240 a business, we've not always been very comfortable with that. Yes, 0:24:28.320 --> 0:24:31.200 so I'm not sure you should sort of proactively send 0:24:31.880 --> 0:24:34.320 you the way. But if the best thing for a 0:24:34.400 --> 0:24:38.040 person is to go, that doesn't mean they can't come back. 0:24:39.240 --> 0:24:41.840 And in a way you should expect if you can 0:24:41.840 --> 0:24:44.879 celebrate an experience game that is relevant to the return, 0:24:45.359 --> 0:24:48.399 why would you not have that return? And I do 0:24:48.480 --> 0:24:50.760 think there is a group of people that just feel 0:24:50.800 --> 0:24:53.879 more comfortable to go into an experienced curve inside a 0:24:53.880 --> 0:24:56.480 single company, and people that like that rotation and maybe 0:24:56.560 --> 0:24:59.800 even develop skills faster. But why would you then say 0:24:59.800 --> 0:25:02.800 you don't come back? Although one of the awkward conclusions 0:25:02.840 --> 0:25:05.080 I think I'm reading right that if you want to actually, 0:25:05.119 --> 0:25:07.520 if you want to maximize your income, and not everybody 0:25:07.560 --> 0:25:11.399 wants to do that, then you are better off moving around. 0:25:11.520 --> 0:25:14.160 Balder moves inside the company and balder moves across are 0:25:14.400 --> 0:25:18.720 for the individual probably the best maximizing, at least for 0:25:18.760 --> 0:25:21.600 that ball that we looked at. It's not so, it's 0:25:21.600 --> 0:25:23.760 not it's a small group that actually doing that. We 0:25:23.800 --> 0:25:26.560 think a lot these days about social mobility, And this 0:25:26.680 --> 0:25:29.679