1 00:00:05,940 --> 00:00:09,000 Speaker 1: Welcome to Copy Time, a podcast series on Markets and 2 00:00:09,010 --> 00:00:12,399 Speaker 1: Economies from D BS Group Research. I'm Tare, chief Economist. 3 00:00:12,619 --> 00:00:15,600 Speaker 1: Welcoming you to our 122nd episode. 4 00:00:16,159 --> 00:00:20,770 Speaker 1: Today we will discuss global macro and development multilateralism. Our 5 00:00:20,780 --> 00:00:24,870 Speaker 1: return guest is Martin Mhn, a non-resident, senior fellow at 6 00:00:24,879 --> 00:00:28,420 Speaker 1: the Atlantic Council's Geo Economic Center. Prior to the Council, 7 00:00:28,430 --> 00:00:31,459 Speaker 1: Martin spent several decades at the International Monetary Fund in 8 00:00:31,469 --> 00:00:35,759 Speaker 1: various senior capacity. And his last position there was director 9 00:00:35,770 --> 00:00:40,180 Speaker 1: for the Department of Strategy Policy and Review Martin Mizen. 10 00:00:40,189 --> 00:00:41,939 Speaker 1: A warm welcome back to COVID time. 11 00:00:42,790 --> 00:00:45,869 Speaker 2: Thank you, Tamo. It's great to be back and congratulations 12 00:00:45,880 --> 00:00:47,290 Speaker 2: on the great run of your show. 13 00:00:47,810 --> 00:00:50,569 Speaker 1: Thank you very much Martin. I think if I'm not mistaken, 14 00:00:50,580 --> 00:00:52,709 Speaker 1: you and I did exactly half the number of episodes 15 00:00:52,720 --> 00:00:54,720 Speaker 1: ago back when it was like in the sixties. 16 00:00:55,599 --> 00:00:58,220 Speaker 2: That's right. Yeah. Although, you know, it doesn't feel that 17 00:00:58,229 --> 00:01:01,099 Speaker 2: long ago and you know, we haven't grown that much older, right? 18 00:01:01,110 --> 00:01:03,299 Speaker 2: It sounds like, oh, back in the sixties. 19 00:01:04,800 --> 00:01:07,339 Speaker 1: No. And in fact, you and I met in person 20 00:01:07,349 --> 00:01:10,059 Speaker 1: just a week ago uh in Washington DC. You're kind 21 00:01:10,069 --> 00:01:12,319 Speaker 1: enough to take me out to lunch. Uh, Martin, let's 22 00:01:12,330 --> 00:01:15,360 Speaker 1: start with that. Some takeaways from the IMF meetings for you. 23 00:01:17,169 --> 00:01:21,149 Speaker 2: Yeah, the IMF meetings. It was a great show as always. Um, 24 00:01:21,160 --> 00:01:24,940 Speaker 2: you know, all the, the tents were erected and, uh, 25 00:01:25,279 --> 00:01:28,839 Speaker 2: the meetings were announced and the words were spoken but 26 00:01:29,269 --> 00:01:32,629 Speaker 2: one could not come away from the meetings, um, with 27 00:01:32,639 --> 00:01:36,629 Speaker 2: the sense of, well, you know, there isn't really much 28 00:01:36,639 --> 00:01:39,449 Speaker 2: that people can agree on and by people, I mean, 29 00:01:39,459 --> 00:01:43,419 Speaker 2: the whole world community, um it's not just the two 30 00:01:43,430 --> 00:01:46,860 Speaker 2: big um countries that are kind of um 31 00:01:47,190 --> 00:01:51,500 Speaker 2: you know, being declared geopolitical, you know, rivals, I mean, 32 00:01:51,510 --> 00:01:53,959 Speaker 2: talking China and Russia, of course, they would have resisted 33 00:01:53,970 --> 00:01:57,569 Speaker 2: a lot of the language on, on the politics, usually 34 00:01:57,580 --> 00:01:58,830 Speaker 2: ahead of a communique. 35 00:01:59,370 --> 00:02:04,239 Speaker 2: Um but also, um you know, within Europe um within 36 00:02:04,250 --> 00:02:07,959 Speaker 2: the development community and the finance community, it's no longer 37 00:02:07,970 --> 00:02:12,059 Speaker 2: the old multilateralism, there's a lot at stake in various ways, 38 00:02:12,070 --> 00:02:15,130 Speaker 2: but it doesn't lead to multilateral outcomes. The real show 39 00:02:15,139 --> 00:02:18,830 Speaker 2: is going on elsewhere, I think now having said that 40 00:02:18,839 --> 00:02:22,978 Speaker 2: um obviously, there was some kind of small steps forward 41 00:02:22,990 --> 00:02:25,050 Speaker 2: on issues where everybody has an interest. 42 00:02:25,639 --> 00:02:30,100 Speaker 2: Um uh First of all, just before the meeting started, 43 00:02:30,110 --> 00:02:33,539 Speaker 2: um the managing director had been reappointed for another five years, 44 00:02:34,149 --> 00:02:37,138 Speaker 2: uh which seemed to be a kind of a solution 45 00:02:37,149 --> 00:02:39,940 Speaker 2: where everybody could agree on because deviating from it would 46 00:02:39,949 --> 00:02:42,519 Speaker 2: have been a big mess. And um she had a 47 00:02:42,538 --> 00:02:46,698 Speaker 2: lot of supporters but it wasn't really unanimous. Um uh 48 00:02:46,770 --> 00:02:49,039 Speaker 2: at least at the beginning, I mean, the, the IMF 49 00:02:49,050 --> 00:02:53,410 Speaker 2: always rallies around um in the board meetings usually. But 50 00:02:53,419 --> 00:02:58,758 Speaker 2: um uh there was also some progress on the quota before. 51 00:02:58,770 --> 00:03:01,668 Speaker 2: Of course, it's been a while already that the US agreed. 52 00:03:02,080 --> 00:03:04,948 Speaker 2: And if you read the communique language, um there's a 53 00:03:04,960 --> 00:03:08,490 Speaker 2: lot of talk about. Well, uh first of all, you know, 54 00:03:08,500 --> 00:03:12,698 Speaker 2: we're going to implement this. So the US um obviously 55 00:03:12,710 --> 00:03:15,750 Speaker 2: in the crosshairs here because they need Congress to act, 56 00:03:16,250 --> 00:03:19,860 Speaker 2: but they were writing, they were supporting that language um 57 00:03:19,869 --> 00:03:23,869 Speaker 2: that the, the, the actual quota gets uh legislated and 58 00:03:23,880 --> 00:03:26,619 Speaker 2: uh uh uh appropriated 59 00:03:27,059 --> 00:03:29,949 Speaker 2: and then paid in. Um There was some talk about 60 00:03:29,960 --> 00:03:33,359 Speaker 2: how to switch between the quota and the arrangements to 61 00:03:33,369 --> 00:03:37,399 Speaker 2: borrow in case quotas get delayed. So that's all like process. 62 00:03:37,410 --> 00:03:40,949 Speaker 2: Um And um uh it's fine that it proceeds 63 00:03:41,320 --> 00:03:44,360 Speaker 2: some other stuff. Um Martin 64 00:03:44,389 --> 00:03:45,850 Speaker 1: before you move on, I just want to ask you 65 00:03:45,860 --> 00:03:49,770 Speaker 1: one question just for the listeners. Um understanding uh explain 66 00:03:49,779 --> 00:03:52,669 Speaker 1: the substance of the quota rearrangement. Does it mean a 67 00:03:52,679 --> 00:03:55,580 Speaker 1: reduction in the voting power of the United States and 68 00:03:55,589 --> 00:03:58,550 Speaker 1: European countries and by extension and increase in the voting 69 00:03:58,559 --> 00:03:59,940 Speaker 1: power of emerging market economies? 70 00:04:00,580 --> 00:04:02,479 Speaker 2: Yeah. No. So that's the problem when you come out 71 00:04:02,490 --> 00:04:06,479 Speaker 2: of the spring meetings. You're still stuck with the technicalities. OK, 72 00:04:06,490 --> 00:04:07,770 Speaker 2: let's step back. Um 73 00:04:08,309 --> 00:04:11,570 Speaker 2: um The quota is the IMF S capital. If you want, right? 74 00:04:11,580 --> 00:04:14,929 Speaker 2: Um It's the paid in share capital uh of each 75 00:04:14,940 --> 00:04:18,890 Speaker 2: member country and it also determines the vote. Um the 76 00:04:18,899 --> 00:04:23,209 Speaker 2: voting power more or less. Um and um 77 00:04:24,290 --> 00:04:28,350 Speaker 2: what was agreed was not a real realignment of quotas 78 00:04:28,359 --> 00:04:33,130 Speaker 2: which is a big demand by especially China also emerging markets. 79 00:04:33,488 --> 00:04:38,089 Speaker 2: They feel underrepresented at the IMF um which they are, 80 00:04:38,100 --> 00:04:40,880 Speaker 2: I mean, factually speaking, you know, the, the IMF always 81 00:04:40,890 --> 00:04:44,868 Speaker 2: was supposed to have votes according to the size of 82 00:04:44,880 --> 00:04:48,589 Speaker 2: its member economies and China is obviously undervalued at the moment. 83 00:04:49,220 --> 00:04:53,190 Speaker 2: Um No, it was instead a commitment by the US 84 00:04:53,200 --> 00:04:54,919 Speaker 2: to increase its share 85 00:04:55,600 --> 00:04:58,010 Speaker 2: uh or it's not, not its share, but it's, it's 86 00:04:58,019 --> 00:05:03,618 Speaker 2: actual capital um which it did to solidify the finances 87 00:05:03,630 --> 00:05:06,260 Speaker 2: of the IMF because a lot of the finances, a 88 00:05:06,269 --> 00:05:09,720 Speaker 2: lot of the lending capacity of the IMF um is 89 00:05:09,730 --> 00:05:13,790 Speaker 2: based on arrangements to borrow if needed from member countries 90 00:05:13,799 --> 00:05:14,178 Speaker 2: and 91 00:05:14,600 --> 00:05:17,980 Speaker 2: to make the IMF more stable, the, the US agreed 92 00:05:17,988 --> 00:05:21,979 Speaker 2: to raise its capital. Now, it only did that because 93 00:05:22,190 --> 00:05:26,899 Speaker 2: it got the uh agreement from everybody else to also 94 00:05:26,910 --> 00:05:30,119 Speaker 2: raise their capital share, but in the same proportion like 95 00:05:30,130 --> 00:05:33,738 Speaker 2: the US. So in other words, the IMF gets more capital, great, 96 00:05:34,059 --> 00:05:36,890 Speaker 2: but there's no realignment of votes not so great as 97 00:05:36,899 --> 00:05:38,178 Speaker 2: some will say. Ok. 98 00:05:38,549 --> 00:05:42,289 Speaker 2: And um it's still an important step um because it, 99 00:05:42,299 --> 00:05:46,769 Speaker 2: it also demonstrates the US commitment to the IMF but 100 00:05:46,779 --> 00:05:50,329 Speaker 2: um it's only kind of half the the issue. And 101 00:05:50,339 --> 00:05:53,670 Speaker 2: it's kind of surprising that some other countries agreed. 102 00:05:54,369 --> 00:05:57,410 Speaker 2: But, you know, there we come to this geopolitical thing 103 00:05:57,420 --> 00:06:00,339 Speaker 2: because it was a good move. And I think 104 00:06:01,029 --> 00:06:03,600 Speaker 2: if China had, for example, said, well, we don't agree 105 00:06:03,609 --> 00:06:06,720 Speaker 2: to this unless we get a bigger vote, they could 106 00:06:06,730 --> 00:06:11,200 Speaker 2: have been presented as someone who blocked an IMF kind 107 00:06:11,209 --> 00:06:13,940 Speaker 2: of a good thing for the fund for their own 108 00:06:13,959 --> 00:06:17,440 Speaker 2: parochial reasons. And why would they do that? Because the 109 00:06:17,450 --> 00:06:20,100 Speaker 2: global South needs a lot of money. So the other 110 00:06:20,109 --> 00:06:22,368 Speaker 2: way around, if the US had done nothing, they could 111 00:06:22,380 --> 00:06:25,600 Speaker 2: have been accused of just ignoring the plight of these countries. 112 00:06:25,779 --> 00:06:28,349 Speaker 2: So everybody had an interest to say, well, look, we 113 00:06:28,359 --> 00:06:30,690 Speaker 2: support more capital for the IMF 114 00:06:31,359 --> 00:06:35,649 Speaker 2: so it can lend more. Um uh But uh that 115 00:06:35,660 --> 00:06:38,659 Speaker 2: was kind of the, the, the lowest common denominator. And 116 00:06:39,339 --> 00:06:41,500 Speaker 2: what I was saying earlier is that now they need 117 00:06:41,510 --> 00:06:44,809 Speaker 2: to implement that the Congress needs to legislate the money, 118 00:06:44,820 --> 00:06:47,839 Speaker 2: other countries obviously too. But it's always the Congress that 119 00:06:47,850 --> 00:06:51,010 Speaker 2: proves the sticking part. That's how it was in 2010. 120 00:06:51,019 --> 00:06:53,359 Speaker 2: It took them six years I think to come around. 121 00:06:54,160 --> 00:06:57,160 Speaker 2: Um And then of course, there's the lowest commitment to 122 00:06:57,170 --> 00:06:57,920 Speaker 2: review 123 00:06:58,579 --> 00:07:02,230 Speaker 2: the um the quota shares and the voting shares of 124 00:07:02,238 --> 00:07:05,869 Speaker 2: the IMF and to find the process forward. Now, uh 125 00:07:06,250 --> 00:07:07,919 Speaker 2: you know, I don't want to kind of bring up 126 00:07:07,928 --> 00:07:10,920 Speaker 2: comparisons to Damocles, but it goes a little bit in 127 00:07:10,929 --> 00:07:16,369 Speaker 2: that direction because there are so many interests interwoven um 128 00:07:16,380 --> 00:07:20,250 Speaker 2: uh into that quota formula they even have um which 129 00:07:20,260 --> 00:07:23,459 Speaker 2: is kind of a guideline. It's not, it's not deterministic 130 00:07:23,760 --> 00:07:24,200 Speaker 2: but 131 00:07:24,760 --> 00:07:28,260 Speaker 2: kind of figuring out the relative kind of standings of 132 00:07:28,269 --> 00:07:33,329 Speaker 2: various European countries within that quota arrangement, finding out the 133 00:07:33,339 --> 00:07:36,730 Speaker 2: relative strength of say, Japan and China, 134 00:07:37,390 --> 00:07:38,049 Speaker 2: um 135 00:07:38,880 --> 00:07:42,450 Speaker 2: figuring out how much vote to really give the developing countries. 136 00:07:42,459 --> 00:07:46,579 Speaker 2: Although economically speaking, they're really, I mean, they're so small still, 137 00:07:46,589 --> 00:07:50,149 Speaker 2: unfortunately that they're not really way out of line. It's 138 00:07:50,160 --> 00:07:53,290 Speaker 2: more a political question. So how much votes should Africa 139 00:07:53,299 --> 00:07:56,380 Speaker 2: have in the IMF it's a big political issue and, 140 00:07:56,390 --> 00:08:00,160 Speaker 2: you know, they just got another board chair, the 25th 141 00:08:00,170 --> 00:08:02,119 Speaker 2: board chair of the IMF goes to Africa. 142 00:08:02,790 --> 00:08:05,640 Speaker 2: So then I have three, which is good, I think, 143 00:08:05,809 --> 00:08:10,359 Speaker 2: but figuring out how to kind of divide the political 144 00:08:10,369 --> 00:08:13,190 Speaker 2: and the economic influence and fit it into a formula. 145 00:08:13,709 --> 00:08:16,010 Speaker 2: If you ask me, they're gonna talk about that for 146 00:08:16,019 --> 00:08:19,809 Speaker 2: ages and not making progress, which means that, you know, 147 00:08:19,820 --> 00:08:23,880 Speaker 2: China will again, probably have to ask itself, do we 148 00:08:23,890 --> 00:08:27,410 Speaker 2: still support this institution in a few years if nothing 149 00:08:27,420 --> 00:08:29,450 Speaker 2: happens or what do we do? So so far they've 150 00:08:29,459 --> 00:08:31,089 Speaker 2: been playing along constructively. 151 00:08:31,730 --> 00:08:35,760 Speaker 2: But um it's, it's heightening the, the tension between what 152 00:08:35,770 --> 00:08:37,679 Speaker 2: the IMF really is and what it's supposed to 153 00:08:37,690 --> 00:08:40,270 Speaker 1: be. Excellent, very, very useful. Thanks Martin. 154 00:08:42,260 --> 00:08:45,320 Speaker 2: Yeah. Um So the quota that, you know, the, the, 155 00:08:45,330 --> 00:08:48,080 Speaker 2: the agreement was some way forward now, they, they commit 156 00:08:48,090 --> 00:08:50,400 Speaker 2: to further process. Um 157 00:08:51,159 --> 00:08:56,239 Speaker 2: uh the common framework uh as always is under debate. 158 00:08:56,440 --> 00:09:00,739 Speaker 2: Um so, you know, low income and developing countries are 159 00:09:00,750 --> 00:09:01,579 Speaker 2: over indebted. 160 00:09:02,380 --> 00:09:05,669 Speaker 2: There has been problems with countries like Zambia that 161 00:09:06,840 --> 00:09:10,598 Speaker 2: needed to restructure its debt and they, you know, took 162 00:09:10,609 --> 00:09:14,109 Speaker 2: them forever to do that in part because China not 163 00:09:14,119 --> 00:09:17,380 Speaker 2: always China but often China was very slow in restructuring. 164 00:09:18,210 --> 00:09:22,669 Speaker 2: Um They've been making progress on that one. The, the 165 00:09:22,679 --> 00:09:26,589 Speaker 2: interesting thing here is that um the IMF came out 166 00:09:26,599 --> 00:09:29,270 Speaker 2: with a policy paper just before the meeting started. 167 00:09:30,989 --> 00:09:33,349 Speaker 2: Um and that's not, that's a very tactical paper and 168 00:09:33,359 --> 00:09:38,049 Speaker 2: very difficult to read. I have to warn our, our 169 00:09:38,059 --> 00:09:42,159 Speaker 2: uh all our, our listeners about um you know, delving 170 00:09:42,169 --> 00:09:44,520 Speaker 2: into that paper, there's a lot of legalese in there, 171 00:09:44,530 --> 00:09:47,250 Speaker 2: but it's, it's really important. The issue here is the 172 00:09:47,260 --> 00:09:50,650 Speaker 2: follow Zambia had to wait for an IMF program for 173 00:09:50,659 --> 00:09:53,549 Speaker 2: three years or so because the creditors could not agree 174 00:09:53,559 --> 00:09:54,460 Speaker 2: on a restructuring 175 00:09:55,320 --> 00:09:58,869 Speaker 2: under the old kind of rules if you want 1020 176 00:09:58,880 --> 00:10:01,739 Speaker 2: years ago when China was not yet a big creditor, 177 00:10:01,750 --> 00:10:04,059 Speaker 2: but there was only the Paris Club. So the the 178 00:10:04,070 --> 00:10:06,218 Speaker 2: advanced industrial economies 179 00:10:06,950 --> 00:10:10,020 Speaker 2: um usually agreement in the Paris Club that they would 180 00:10:10,030 --> 00:10:13,169 Speaker 2: take on this, this debt restructure and let alone agree 181 00:10:13,179 --> 00:10:16,369 Speaker 2: on it yet was already enough for the IMF to say, ok, 182 00:10:16,380 --> 00:10:17,989 Speaker 2: we're going to have a deal one day. So we 183 00:10:18,000 --> 00:10:18,570 Speaker 2: move forward 184 00:10:19,419 --> 00:10:21,799 Speaker 2: with China that didn't work because there was no way 185 00:10:21,809 --> 00:10:25,969 Speaker 2: of gauging whether China really was serious when they said, well, 186 00:10:25,979 --> 00:10:28,319 Speaker 2: you know, we're going to engage and we're gonna talk 187 00:10:28,780 --> 00:10:31,109 Speaker 2: and you know, it, it took a lot of years 188 00:10:31,119 --> 00:10:33,690 Speaker 2: at the beginning, but that was due to in part 189 00:10:33,700 --> 00:10:36,718 Speaker 2: internal issues in China. But 190 00:10:37,330 --> 00:10:40,460 Speaker 2: I think the the international community has come to the 191 00:10:40,469 --> 00:10:42,929 Speaker 2: point where they said, well, China has now done a 192 00:10:42,940 --> 00:10:48,330 Speaker 2: few restructurings. They have participated not smoothly, mind you it's 193 00:10:48,340 --> 00:10:49,909 Speaker 2: still a process with them, but 194 00:10:50,559 --> 00:10:53,978 Speaker 2: there is something going on with China that we can say, ok, 195 00:10:54,020 --> 00:10:57,500 Speaker 2: once they say they engage, we're most likely going to 196 00:10:57,510 --> 00:10:59,890 Speaker 2: get to some point where we have an agreement with 197 00:10:59,900 --> 00:11:02,570 Speaker 2: them and that should be enough for the IMF to 198 00:11:02,580 --> 00:11:06,939 Speaker 2: go forward. And so that's one thing that's the assurances 199 00:11:06,950 --> 00:11:11,210 Speaker 2: policy and there's a little kind of um you know, 200 00:11:11,219 --> 00:11:15,289 Speaker 2: a little kind of tool that can threaten China if 201 00:11:15,299 --> 00:11:16,429 Speaker 2: a country wants to, 202 00:11:16,859 --> 00:11:19,909 Speaker 2: to say, well, if China doesn't engage at all or 203 00:11:19,919 --> 00:11:23,239 Speaker 2: not timely enough, but we've made all efforts to reach out. 204 00:11:23,250 --> 00:11:24,659 Speaker 2: We made good offers to them 205 00:11:25,479 --> 00:11:26,909 Speaker 2: that the IMF can say, well, 206 00:11:27,630 --> 00:11:30,659 Speaker 2: China, too bad, you're not going to get paid um under, 207 00:11:30,669 --> 00:11:33,409 Speaker 2: under our, under our IMF program. 208 00:11:34,130 --> 00:11:36,280 Speaker 2: Um You have to wait until you come to a 209 00:11:36,289 --> 00:11:39,989 Speaker 2: debt agreement. In the meantime, the country gets IMF money 210 00:11:40,309 --> 00:11:43,000 Speaker 2: but you will not get paid from it, we stop 211 00:11:43,010 --> 00:11:45,069 Speaker 2: the payments to the country as soon as they even 212 00:11:45,080 --> 00:11:47,589 Speaker 2: think of repaying you. So, in a way it's, it's 213 00:11:47,599 --> 00:11:50,190 Speaker 2: defaulting on China keeping them in default. 214 00:11:51,030 --> 00:11:53,349 Speaker 2: Um, but the IMF goes ahead and that, that is 215 00:11:53,359 --> 00:11:55,369 Speaker 2: something that used to be just impossible. 216 00:11:56,070 --> 00:11:59,349 Speaker 2: Uh In the, in the eighties, nineties, two thousands, it 217 00:11:59,359 --> 00:12:02,280 Speaker 2: got changed a little bit when Russia did its first 218 00:12:02,289 --> 00:12:05,739 Speaker 2: Ukraine thing in, uh with the, with the Crimea and 219 00:12:05,760 --> 00:12:09,609 Speaker 2: Donbas in 2000. Uh when was it 15 or 14, 220 00:12:09,750 --> 00:12:12,190 Speaker 2: it got changed a little bit um to open the 221 00:12:12,200 --> 00:12:14,969 Speaker 2: door slightly to be able to lend to Ukraine. 222 00:12:15,659 --> 00:12:19,390 Speaker 2: And now it's, it's been even further widened the door. 223 00:12:19,400 --> 00:12:22,718 Speaker 2: It doesn't mention China of course. But the so called 224 00:12:22,729 --> 00:12:25,900 Speaker 2: policy of lending into official arrears is a big step 225 00:12:25,909 --> 00:12:27,690 Speaker 2: for the fund. But still, I would 226 00:12:27,780 --> 00:12:31,219 Speaker 1: see, for example, in the Ukraine context, Ukraine can default 227 00:12:31,229 --> 00:12:33,909 Speaker 1: or not service its debt to Russia but still receive 228 00:12:33,919 --> 00:12:35,219 Speaker 1: an IMF program disperse. 229 00:12:35,590 --> 00:12:39,780 Speaker 2: Yeah, so back then, uh in short, um Russia held 230 00:12:39,789 --> 00:12:42,880 Speaker 2: a 3 billion uh bond that it had uh 231 00:12:43,469 --> 00:12:46,510 Speaker 2: kind of gotten from Ukraine in exchange for money. But 232 00:12:46,520 --> 00:12:51,179 Speaker 2: under a regime in Ukraine, that was still kind of 233 00:12:51,190 --> 00:12:52,770 Speaker 2: um you know, to Russia's liking. 234 00:12:53,609 --> 00:12:56,718 Speaker 2: And the Ukrainians after the change in power and that 235 00:12:56,840 --> 00:13:00,968 Speaker 2: little green men invasion of Crimea said there's no way 236 00:13:00,979 --> 00:13:02,989 Speaker 2: we're going to pay, in fact, to cost us so 237 00:13:03,000 --> 00:13:04,789 Speaker 2: much damage. We're not going to pay. 238 00:13:05,520 --> 00:13:09,400 Speaker 2: And the international community said, well, if um if a 239 00:13:09,409 --> 00:13:13,059 Speaker 2: predator like Russia is no longer relevant for program financing 240 00:13:13,070 --> 00:13:15,630 Speaker 2: in the, in the future, which obviously it wasn't because 241 00:13:15,640 --> 00:13:17,099 Speaker 2: they had become enemies by then. 242 00:13:17,929 --> 00:13:21,090 Speaker 2: Um The IMF can still go ahead while the debt 243 00:13:21,099 --> 00:13:24,000 Speaker 2: is being sorted out provided that the country doesn't repay 244 00:13:24,010 --> 00:13:27,710 Speaker 2: the debt. So in other words, if Ukraine doesn't pay Russia, 245 00:13:27,719 --> 00:13:28,469 Speaker 2: we can move ahead. 246 00:13:29,549 --> 00:13:33,169 Speaker 2: So, um that was the lending into official arrears policy. 247 00:13:33,179 --> 00:13:35,359 Speaker 2: And as I said, it has now been widened a 248 00:13:35,369 --> 00:13:38,950 Speaker 2: little bit further, but it's a very kind of weak 249 00:13:38,960 --> 00:13:43,369 Speaker 2: leverage against China because it's uh you know, tell me 250 00:13:43,380 --> 00:13:46,330 Speaker 2: which country would like to default on China intentionally 251 00:13:46,594 --> 00:13:49,385 Speaker 2: and all the trade links, the financing links, the cross 252 00:13:49,414 --> 00:13:52,715 Speaker 2: default clauses and God knows what. Um so it's very 253 00:13:52,724 --> 00:13:55,375 Speaker 2: unlikely but it's there as a little tool to be used. 254 00:13:55,674 --> 00:13:58,984 Speaker 2: But the real issue is the assurances policy. So that's 255 00:13:58,994 --> 00:14:01,895 Speaker 2: a vote of confidence if you want in China, of, 256 00:14:02,065 --> 00:14:06,635 Speaker 2: of them playing by the rules just very slowly, they 257 00:14:06,645 --> 00:14:08,854 Speaker 2: need to still figure out a lot of the details 258 00:14:08,864 --> 00:14:12,534 Speaker 2: and the internal coordinations very weak. Um So the IMF 259 00:14:12,544 --> 00:14:14,614 Speaker 2: can then faster. So that's I think 260 00:14:15,440 --> 00:14:18,150 Speaker 2: uh you know, a good move. It's a marginal one. 261 00:14:18,159 --> 00:14:20,700 Speaker 2: We'll have to see how it works out uh in 262 00:14:20,710 --> 00:14:23,409 Speaker 2: the future. But that's one of the achievements of the 263 00:14:23,419 --> 00:14:26,289 Speaker 2: board before the meetings. Um 264 00:14:27,510 --> 00:14:31,590 Speaker 2: We also got some news, I think just yesterday, again, 265 00:14:31,599 --> 00:14:33,590 Speaker 2: not related to the meetings directly 266 00:14:34,210 --> 00:14:37,830 Speaker 2: that the African Development Bank seems to have come to 267 00:14:37,840 --> 00:14:43,219 Speaker 2: a point with IMF shareholders that they can use SDRS 268 00:14:43,559 --> 00:14:45,469 Speaker 2: that the fund is issuing, 269 00:14:46,320 --> 00:14:50,849 Speaker 2: um, to finance, to, to raise finance that they can 270 00:14:50,859 --> 00:14:55,219 Speaker 2: only lend to Africa. So again, that sounds not such 271 00:14:55,229 --> 00:14:58,219 Speaker 2: a big thing, but it has the seeds of something bigger, 272 00:14:59,260 --> 00:15:00,059 Speaker 2: um, 273 00:15:00,729 --> 00:15:04,969 Speaker 2: that gets us deep into development finance. So the issue 274 00:15:04,979 --> 00:15:05,669 Speaker 2: is that 275 00:15:06,409 --> 00:15:13,630 Speaker 2: um SDRS are being regarded by central banks as reserve currency, right? 276 00:15:14,140 --> 00:15:17,030 Speaker 2: That's part of the deal of the IMF. Um As 277 00:15:17,039 --> 00:15:20,229 Speaker 2: long as um the fund is using conditionality for its 278 00:15:20,239 --> 00:15:25,380 Speaker 2: programs and is able of addressing countries balance of payments issues. 279 00:15:26,090 --> 00:15:29,390 Speaker 2: The the the claims that central banks have on the 280 00:15:29,400 --> 00:15:29,950 Speaker 2: IMF 281 00:15:30,849 --> 00:15:34,760 Speaker 2: because the IMF is financed by member country contributions way 282 00:15:34,770 --> 00:15:39,469 Speaker 2: back in the bo gold and nowadays currency. So as 283 00:15:39,479 --> 00:15:42,070 Speaker 2: long as that claim is of a very high quality, 284 00:15:42,080 --> 00:15:44,280 Speaker 2: the banks, the central banks can say, oh look, you know, 285 00:15:44,289 --> 00:15:46,549 Speaker 2: it's part of our reserves, ok? 286 00:15:47,260 --> 00:15:49,559 Speaker 2: Because the, the IMF owes them SDRS. 287 00:15:50,219 --> 00:15:55,239 Speaker 2: Now say if the IMF would hand out SDRS to 288 00:15:56,109 --> 00:15:58,690 Speaker 2: institutions that are of not such great quality 289 00:15:59,789 --> 00:16:03,270 Speaker 2: and those institutions would then lend and make losses and 290 00:16:03,280 --> 00:16:05,609 Speaker 2: the IMF would have to at some point record a 291 00:16:05,619 --> 00:16:08,979 Speaker 2: loss on its books on its SDRS that would be 292 00:16:08,989 --> 00:16:12,109 Speaker 2: passed on to the member countries and you cannot have 293 00:16:12,119 --> 00:16:15,179 Speaker 2: losses on central bank reserves, right. It has to be 294 00:16:15,190 --> 00:16:19,909 Speaker 2: absolutely safe, that asset. So that's the link here. That's 295 00:16:19,919 --> 00:16:24,450 Speaker 2: so kind of complicated. Sometimes. The centerpiece here is IMF conditionality. 296 00:16:25,200 --> 00:16:25,739 Speaker 2: Um 297 00:16:26,609 --> 00:16:30,520 Speaker 2: And that's why this RST the resilience and sustainability trust 298 00:16:30,530 --> 00:16:34,150 Speaker 2: that the IMF came up with um to lend to 299 00:16:34,159 --> 00:16:40,239 Speaker 2: um poorer countries for climate purposes, um which was heralded, 300 00:16:40,250 --> 00:16:43,799 Speaker 2: you know, all around the world as a major step forward. Well, 301 00:16:43,809 --> 00:16:46,510 Speaker 2: it's actually a fairly small amount. It's big for some 302 00:16:46,520 --> 00:16:47,989 Speaker 2: island countries. Yes. But, 303 00:16:48,359 --> 00:16:50,880 Speaker 2: and the rest of the scheme of things, it's in 304 00:16:50,890 --> 00:16:53,640 Speaker 2: the bigger scheme, it's not so big. And the reason 305 00:16:53,650 --> 00:16:58,450 Speaker 2: is because it's all funded on STR contributions and those 306 00:16:58,460 --> 00:16:59,369 Speaker 2: have to be 307 00:17:02,760 --> 00:17:05,649 Speaker 2: reserves and extra reserves in these trust funds. And the 308 00:17:05,660 --> 00:17:06,599 Speaker 2: conditionality has, 309 00:17:07,880 --> 00:17:10,239 Speaker 2: you have a full fledged IMF program and you get 310 00:17:10,250 --> 00:17:14,349 Speaker 2: some money from the trust fund and it's just complicated. 311 00:17:14,359 --> 00:17:17,708 Speaker 2: It's a big mess bureaucratically and the, the outcome is 312 00:17:17,719 --> 00:17:20,669 Speaker 2: not that great. So the African Development Bank now, 313 00:17:21,390 --> 00:17:21,760 Speaker 2: oh, 314 00:17:23,968 --> 00:17:26,428 Speaker 2: with a bunch of guarantees from the UK and other 315 00:17:26,438 --> 00:17:30,609 Speaker 2: countries to do exactly the same. But it doesn't require 316 00:17:30,619 --> 00:17:31,788 Speaker 2: a full IMF program 317 00:17:32,599 --> 00:17:36,390 Speaker 2: because apparently it has sufficient guarantees from other countries to 318 00:17:36,400 --> 00:17:40,880 Speaker 2: use these SDRS. So that's uh an un bureaucratic way 319 00:17:40,890 --> 00:17:44,859 Speaker 2: of proceeding. And if it gains uh followers, it could 320 00:17:44,869 --> 00:17:47,339 Speaker 2: also apply to others like L A DB and the 321 00:17:47,349 --> 00:17:50,599 Speaker 2: Asia Development Bank and so forth. And that would open 322 00:17:50,609 --> 00:17:53,959 Speaker 2: up new ways of financing. Um within limits, I would 323 00:17:53,969 --> 00:17:54,839 Speaker 2: say still. But 324 00:17:55,199 --> 00:17:59,050 Speaker 2: it, it does away with this um IMF program requirement. 325 00:17:59,060 --> 00:18:01,458 Speaker 2: That kind of is a conflict of interest for the 326 00:18:01,469 --> 00:18:06,819 Speaker 2: IMF really and uh just creates unnecessary bureaucratic hurdles. So, 327 00:18:07,650 --> 00:18:09,699 Speaker 2: uh you know, I've been going on to explain a 328 00:18:09,709 --> 00:18:12,520 Speaker 2: lot of this and I'm, I'm sorry, I hope this 329 00:18:12,530 --> 00:18:15,020 Speaker 2: is interesting for people, but you can see that the 330 00:18:15,030 --> 00:18:17,530 Speaker 2: devil is in the details. First of all, and second, 331 00:18:17,949 --> 00:18:19,469 Speaker 2: all these incremental 332 00:18:19,979 --> 00:18:24,430 Speaker 2: kind of ways of making progress are really because there 333 00:18:24,439 --> 00:18:27,979 Speaker 2: is no other ways forward. There's no big decision on 334 00:18:27,989 --> 00:18:31,280 Speaker 2: the voting shares, there's no big decision on, you know, 335 00:18:31,290 --> 00:18:34,439 Speaker 2: uh raising lots of money for the World Bank and this. 336 00:18:34,449 --> 00:18:37,829 Speaker 2: So everybody is trying to, to tweak the existing system 337 00:18:37,839 --> 00:18:40,000 Speaker 2: so that something comes out of it and they can 338 00:18:40,010 --> 00:18:41,079 Speaker 2: claim it as a success, 339 00:18:41,880 --> 00:18:47,179 Speaker 1: right? Um I think uh I mean, a super helpful Martin. 340 00:18:47,189 --> 00:18:49,030 Speaker 1: Uh but at the same time as you correctly say, 341 00:18:49,040 --> 00:18:52,978 Speaker 1: these are uh on the margin, uh these are not 342 00:18:52,989 --> 00:18:56,379 Speaker 1: uh seismic in terms of global development, finance or meeting 343 00:18:56,390 --> 00:19:00,079 Speaker 1: any of the major lumpy needs of the developing world. 344 00:19:00,089 --> 00:19:02,149 Speaker 1: And going back to the first point in terms of 345 00:19:02,160 --> 00:19:05,409 Speaker 1: the voice and the quota in this international organization, certainly 346 00:19:05,420 --> 00:19:08,458 Speaker 1: that crisis is not being resolved by these incremental changes. 347 00:19:08,839 --> 00:19:11,859 Speaker 1: Martin, I felt that, you know, the April meetings were 348 00:19:11,869 --> 00:19:16,540 Speaker 1: not that different in terms of communication than the October 349 00:19:16,550 --> 00:19:19,880 Speaker 1: 2023 meetings in Marrakesh. Although there was one word that 350 00:19:19,890 --> 00:19:22,670 Speaker 1: was not mentioned at all in those meetings and are 351 00:19:22,680 --> 00:19:25,229 Speaker 1: mentioned a lot these days and including in the three 352 00:19:25,239 --> 00:19:28,979 Speaker 1: meetings is the word overcapacity. So the Americans are, you know, 353 00:19:28,989 --> 00:19:32,859 Speaker 1: looking hard at China's industrial capacity and terming it as 354 00:19:32,869 --> 00:19:36,219 Speaker 1: overcapacity with the risk of exporting deflation. 355 00:19:36,569 --> 00:19:39,069 Speaker 1: Uh What do you think of this argument? And where 356 00:19:39,079 --> 00:19:41,150 Speaker 1: do you think the IMF stands on this? 357 00:19:43,010 --> 00:19:46,239 Speaker 2: Um more than the argument first. Um I think it 358 00:19:46,250 --> 00:19:47,000 Speaker 2: reflects 359 00:19:47,630 --> 00:19:52,829 Speaker 2: um a very different view, a philosophical difference of the, 360 00:19:52,839 --> 00:19:55,579 Speaker 2: the role of the state in China as opposed to 361 00:19:55,589 --> 00:19:57,708 Speaker 2: a lot of parts of the rest of the world. 362 00:19:58,459 --> 00:20:03,900 Speaker 2: Um The the private sector is kind of um an 363 00:20:03,910 --> 00:20:07,698 Speaker 2: interesting entity in uh in China, right? The question is 364 00:20:07,709 --> 00:20:10,739 Speaker 2: whether it ever existed or it has probably existed for 365 00:20:10,750 --> 00:20:11,510 Speaker 2: a while. But then 366 00:20:12,170 --> 00:20:14,229 Speaker 2: in the last couple of years, they have clamped down 367 00:20:14,239 --> 00:20:18,669 Speaker 2: like quite a bit on entrepreneurs because they saw um 368 00:20:18,680 --> 00:20:19,938 Speaker 2: first of all 369 00:20:21,109 --> 00:20:24,170 Speaker 2: growth of inequality in China. But I think more importantly, 370 00:20:24,579 --> 00:20:28,198 Speaker 2: I think the leadership feared that the role of the 371 00:20:28,209 --> 00:20:30,630 Speaker 2: party was being questioned. And so what I saw is 372 00:20:30,640 --> 00:20:33,579 Speaker 2: that there was a lot of clamping down on private 373 00:20:33,589 --> 00:20:35,889 Speaker 2: investment and private entrepreneurship 374 00:20:36,489 --> 00:20:39,469 Speaker 2: um in the uh uh at least in the finance 375 00:20:39,479 --> 00:20:42,938 Speaker 2: sector and to some extent, probably elsewhere, although don't get 376 00:20:42,949 --> 00:20:46,140 Speaker 2: me wrong. I mean, obviously you have companies that are 377 00:20:46,150 --> 00:20:50,550 Speaker 2: fairly independent in in China. But I think uh the 378 00:20:50,560 --> 00:20:54,869 Speaker 2: overall notion that, that these, that these kind of operate 379 00:20:54,880 --> 00:20:58,069 Speaker 2: independently of the party and the state is something that 380 00:20:58,500 --> 00:21:03,290 Speaker 2: China wouldn't probably subscribe to as opposed to um Western 381 00:21:03,300 --> 00:21:05,270 Speaker 2: liberal democracies where, you know, 382 00:21:05,910 --> 00:21:07,609 Speaker 2: you have to have a good reason for the state 383 00:21:07,619 --> 00:21:11,060 Speaker 2: to interfere with your business. So I think China looks 384 00:21:11,069 --> 00:21:13,040 Speaker 2: at its economy and says, well, it's part of the 385 00:21:13,050 --> 00:21:17,909 Speaker 2: state broadly speaking. So what do we do? Um to 386 00:21:17,920 --> 00:21:20,290 Speaker 2: first of all address the big slump that we've been 387 00:21:20,300 --> 00:21:26,300 Speaker 2: facing because of our housing, our problems, our debt, our demographics, 388 00:21:26,729 --> 00:21:31,409 Speaker 2: um we need to avoid um first of all, social 389 00:21:31,420 --> 00:21:35,250 Speaker 2: uncertainty and social upheaval that threatens the rule of the party. 390 00:21:35,780 --> 00:21:39,310 Speaker 2: And b um we need to prepare um especially given 391 00:21:39,319 --> 00:21:42,800 Speaker 2: our demographics for the challenges of the next 1020 years. 392 00:21:43,449 --> 00:21:45,619 Speaker 2: And so they seem to have come to a conclusion 393 00:21:45,630 --> 00:21:45,910 Speaker 2: that 394 00:21:46,680 --> 00:21:51,520 Speaker 2: um they need to find ways to support what they 395 00:21:51,530 --> 00:21:55,530 Speaker 2: see as first of all, key industries and second uh 396 00:21:55,550 --> 00:21:59,829 Speaker 2: key markets. So it's no accident. I think that China 397 00:21:59,839 --> 00:22:02,760 Speaker 2: is doing a lot of business with the global South 398 00:22:02,770 --> 00:22:05,188 Speaker 2: as we call it. Um because that's where the population 399 00:22:05,199 --> 00:22:08,800 Speaker 2: growth sits over the next, you know, 2030 40 years. 400 00:22:09,300 --> 00:22:13,060 Speaker 2: Um And it's no kind of surprise that they're trying 401 00:22:13,069 --> 00:22:14,239 Speaker 2: to boost 402 00:22:14,949 --> 00:22:17,579 Speaker 2: industries that they think would be critical, like, you know, 403 00:22:17,589 --> 00:22:20,369 Speaker 2: green energy um technology A I 404 00:22:21,270 --> 00:22:23,609 Speaker 2: EVs if you want. So 405 00:22:24,520 --> 00:22:28,709 Speaker 2: um what happens is that, I think China which is inward, 406 00:22:28,719 --> 00:22:31,369 Speaker 2: I think, uh you know, to a, to a, to 407 00:22:31,380 --> 00:22:34,260 Speaker 2: a degree that we in the West can't really imagine 408 00:22:34,760 --> 00:22:37,959 Speaker 2: uh a billion people that are very internally consumed with 409 00:22:37,969 --> 00:22:41,099 Speaker 2: their own issues. They don't, I think, look so far 410 00:22:41,109 --> 00:22:43,540 Speaker 2: out and if the Chinese say, well, we need this, 411 00:22:43,800 --> 00:22:47,020 Speaker 2: who's going to stop us and that of course, brings 412 00:22:47,030 --> 00:22:50,339 Speaker 2: them into that conflict with the US. Who as you said, 413 00:22:51,020 --> 00:22:54,329 Speaker 2: things, this is overcapacity, they're manufacturing their way out of 414 00:22:54,339 --> 00:22:57,020 Speaker 2: the crisis, they're being a burden on the rest of 415 00:22:57,030 --> 00:23:00,399 Speaker 2: the world. And um that I think will lead us 416 00:23:00,410 --> 00:23:04,188 Speaker 2: into even greater conflict if um there's a change of 417 00:23:04,199 --> 00:23:05,199 Speaker 2: power in Washington. 418 00:23:05,859 --> 00:23:08,750 Speaker 2: Um but I think it's, it's rooted in this fundamental 419 00:23:09,609 --> 00:23:12,170 Speaker 2: difference of view of what the state is there for 420 00:23:12,180 --> 00:23:14,270 Speaker 2: and the role of subsidies and all that. 421 00:23:14,900 --> 00:23:18,760 Speaker 2: So um I don't think it's gonna go away anytime soon. 422 00:23:18,829 --> 00:23:22,920 Speaker 2: I mean, we hear from uh Secretary of State Lincoln 423 00:23:22,930 --> 00:23:25,458 Speaker 2: being in China and being accused of speaking in two 424 00:23:25,469 --> 00:23:30,579 Speaker 2: tongues about seeking greater um and better relations with China. 425 00:23:30,589 --> 00:23:32,599 Speaker 2: But at the same time, of course, the US is 426 00:23:32,609 --> 00:23:34,680 Speaker 2: preparing economic steps against China. 427 00:23:36,040 --> 00:23:41,660 Speaker 2: Um it's, it's really causing the Europeans big difficulties because 428 00:23:41,670 --> 00:23:44,579 Speaker 2: they rely much more. I think on China as an 429 00:23:44,589 --> 00:23:47,790 Speaker 2: export market than the US and also of course, a 430 00:23:48,030 --> 00:23:52,930 Speaker 2: trade partner on imports. Um and it's, it's adding to 431 00:23:52,939 --> 00:23:56,619 Speaker 2: this sense that I felt during the spring meetings that, 432 00:23:57,010 --> 00:24:00,219 Speaker 2: you know, really the the big powers can kind of 433 00:24:00,229 --> 00:24:02,579 Speaker 2: have started to talk past each other to some sense 434 00:24:03,040 --> 00:24:04,859 Speaker 2: and I don't know how it's going to play out. 435 00:24:05,290 --> 00:24:07,449 Speaker 2: I have to admit, but I don't think there's going 436 00:24:07,459 --> 00:24:11,040 Speaker 2: to be any way the Chinese will stop subsidizing some 437 00:24:11,050 --> 00:24:14,729 Speaker 2: of these companies, Europe and the US will probably try 438 00:24:14,739 --> 00:24:17,089 Speaker 2: to raise tariffs and keep them out in other ways. 439 00:24:17,099 --> 00:24:20,199 Speaker 2: But you know, the Chinese economy is still a big 440 00:24:20,209 --> 00:24:21,699 Speaker 2: juggernaut and um 441 00:24:22,520 --> 00:24:26,060 Speaker 2: uh to some extent, it's helpful, as you yourself said, 442 00:24:26,069 --> 00:24:28,939 Speaker 2: a couple of times also in last week's interview with 443 00:24:28,949 --> 00:24:31,939 Speaker 2: Alexis Crow, which was really good. Um you know, 444 00:24:32,680 --> 00:24:35,180 Speaker 2: is there really a problem if China supports a lot 445 00:24:35,189 --> 00:24:38,420 Speaker 2: of green technology to the world that everybody needs. 446 00:24:39,140 --> 00:24:42,540 Speaker 2: Um one can have different views on that. I think 447 00:24:42,579 --> 00:24:47,079 Speaker 2: that Western countries, the liberal democracies still want to have 448 00:24:47,089 --> 00:24:50,219 Speaker 2: some capacity left to do it themselves because being dependent 449 00:24:50,229 --> 00:24:51,280 Speaker 2: on another country, 450 00:24:52,150 --> 00:24:55,500 Speaker 2: as you know, especially in this time of geopolitical strife 451 00:24:55,510 --> 00:24:59,439 Speaker 2: has been uh risky and the Russians to see from 452 00:24:59,449 --> 00:25:00,199 Speaker 2: the other way around. 453 00:25:00,880 --> 00:25:02,939 Speaker 2: So there is a there is a trend for 454 00:25:04,010 --> 00:25:06,948 Speaker 2: on shoring reshoring and that applies to all kind of 455 00:25:06,959 --> 00:25:09,099 Speaker 2: sectors and I don't see a way out right now, 456 00:25:09,109 --> 00:25:12,530 Speaker 2: but it's a problem as we know and this deflationary 457 00:25:13,020 --> 00:25:16,188 Speaker 2: impasse from China um may be with us, but so 458 00:25:16,199 --> 00:25:20,000 Speaker 2: is probably a somewhat inflationary impulse from the US, given 459 00:25:20,430 --> 00:25:23,239 Speaker 2: what they do on fiscal policy, which probably the Chinese 460 00:25:23,250 --> 00:25:26,770 Speaker 2: will tell them. Well, you know, they bring your house 461 00:25:26,780 --> 00:25:28,379 Speaker 2: in order. First, I could imagine. 462 00:25:29,800 --> 00:25:33,698 Speaker 1: Uh Martin, do you feel that the US Treasury's line 463 00:25:33,709 --> 00:25:36,649 Speaker 1: of argument on overcapacity would be something that the IMF 464 00:25:36,660 --> 00:25:38,359 Speaker 1: would be sort of forced to take up and there 465 00:25:38,369 --> 00:25:42,169 Speaker 1: will be in their articles for consultation with China or elsewhere. 466 00:25:42,180 --> 00:25:44,810 Speaker 1: This issue will become something that the IMF staff adopt. 467 00:25:46,680 --> 00:25:50,329 Speaker 2: You know, the IMF um that falls under IMF surveillance, right? 468 00:25:50,339 --> 00:25:53,839 Speaker 2: Because they are not trade organization, but of course, they 469 00:25:53,849 --> 00:25:56,329 Speaker 2: are responsible for exchange rates and the like 470 00:25:57,140 --> 00:26:00,780 Speaker 2: the IMF surveillance has not been its strongest suit unfortunately, 471 00:26:01,020 --> 00:26:03,989 Speaker 2: in recent years of the last five to be precise 472 00:26:04,689 --> 00:26:08,750 Speaker 2: um because the focus was elsewhere. And um 473 00:26:09,550 --> 00:26:11,560 Speaker 2: if you have a business model where you need the 474 00:26:11,569 --> 00:26:15,390 Speaker 2: big countries to provide funds for lending to small economies 475 00:26:15,400 --> 00:26:17,400 Speaker 2: and poor economies, then you don't want to go up 476 00:26:17,410 --> 00:26:18,129 Speaker 2: against Europe 477 00:26:18,890 --> 00:26:22,630 Speaker 2: biggest contributors. And, you know, I I've been really disappointed 478 00:26:22,640 --> 00:26:26,410 Speaker 2: by the way in general that um that the fund 479 00:26:26,420 --> 00:26:29,520 Speaker 2: has handled surveillance in recent years. It's been surprising that 480 00:26:29,530 --> 00:26:32,949 Speaker 2: they've come back to the spring meetings by talking about 481 00:26:32,959 --> 00:26:36,839 Speaker 2: the global economy almost exclusively in the curtain raiser almost 482 00:26:36,849 --> 00:26:41,310 Speaker 2: without mentioning climate. Um It's not that climate isn't important, 483 00:26:41,319 --> 00:26:44,199 Speaker 2: but they focused not enough on what they were supposed 484 00:26:44,209 --> 00:26:44,589 Speaker 2: to do. 485 00:26:44,989 --> 00:26:47,599 Speaker 2: So whether there's guts in the IMF to take on 486 00:26:47,609 --> 00:26:49,819 Speaker 2: China on this one. We'll see, I think the recent 487 00:26:49,829 --> 00:26:53,410 Speaker 2: staff reports have not been bad but on this particular issue, 488 00:26:53,819 --> 00:26:56,349 Speaker 2: um we'll have to see the, the key report here 489 00:26:56,359 --> 00:26:59,050 Speaker 2: if you ask me is the so called external sector 490 00:26:59,060 --> 00:27:00,760 Speaker 2: report in June or July, 491 00:27:01,439 --> 00:27:05,239 Speaker 2: where they go through global current account imbalances where they 492 00:27:05,250 --> 00:27:08,040 Speaker 2: look at the exchange rate valuation and where they come 493 00:27:08,050 --> 00:27:12,640 Speaker 2: to a a judgment whether um you know, there there 494 00:27:12,650 --> 00:27:16,659 Speaker 2: is some, some, some policies that need to be adjusted. 495 00:27:17,430 --> 00:27:22,660 Speaker 2: Um I would imagine that the pressure from uh from 496 00:27:22,670 --> 00:27:25,959 Speaker 2: uh across uh 19th street from, from the Treasury is 497 00:27:25,969 --> 00:27:29,369 Speaker 2: big on writing something we'll have to see. I mean, 498 00:27:29,380 --> 00:27:32,290 Speaker 2: you know, as an economist, I would say, as someone 499 00:27:32,300 --> 00:27:35,290 Speaker 2: who's grown up in the, in the uh in, in, 500 00:27:35,300 --> 00:27:38,560 Speaker 2: in market economies, I would say, well, of course, China 501 00:27:38,569 --> 00:27:42,640 Speaker 2: is doing something that's patently unfair from a western sense 502 00:27:42,650 --> 00:27:44,689 Speaker 2: of the world, but whether China is listening is a 503 00:27:44,699 --> 00:27:45,409 Speaker 2: different story. 504 00:27:45,930 --> 00:27:49,629 Speaker 2: So I would hope that the IMF is clear on it. They, 505 00:27:49,640 --> 00:27:52,729 Speaker 2: they at least the China reports have been pretty good in, 506 00:27:52,739 --> 00:27:56,739 Speaker 2: in the last few years. But whether the institutions comes 507 00:27:56,750 --> 00:27:59,589 Speaker 2: up with a, with a tough call that gets through 508 00:27:59,599 --> 00:28:02,410 Speaker 2: its board, we'll have to see. Um I think there's 509 00:28:02,420 --> 00:28:07,030 Speaker 2: ample evidence that China is hurting in some areas uh competitors. 510 00:28:07,709 --> 00:28:11,650 Speaker 2: But um you know, that's one part where we'll have 511 00:28:11,660 --> 00:28:14,780 Speaker 2: to see whether the fund is really still powerful enough 512 00:28:14,790 --> 00:28:17,729 Speaker 2: to send unpleasant messages to its members and it has 513 00:28:17,739 --> 00:28:21,000 Speaker 2: to be matched by, by messengers on the US, which 514 00:28:21,010 --> 00:28:21,569 Speaker 2: they've started. 515 00:28:22,589 --> 00:28:24,238 Speaker 1: That's right. So I want to talk a little bit 516 00:28:24,250 --> 00:28:27,969 Speaker 1: about the US. Um But, but I, I'll start by 517 00:28:27,979 --> 00:28:30,458 Speaker 1: referring something on the international front, which is that there 518 00:28:30,469 --> 00:28:35,089 Speaker 1: was this US, Korea Japan trilateral finance dialogue. Uh right 519 00:28:35,099 --> 00:28:39,199 Speaker 1: during the beginning of the meetings and the communique they issued, 520 00:28:39,209 --> 00:28:41,329 Speaker 1: I I thought it was interesting because normally these are 521 00:28:41,339 --> 00:28:45,810 Speaker 1: rather proforma importance of cooper operation, that sort of stuff 522 00:28:45,819 --> 00:28:47,800 Speaker 1: uh that is mentioned. But in this one, there was 523 00:28:47,810 --> 00:28:50,719 Speaker 1: explicit mention of the recent weakness in the yen and 524 00:28:50,729 --> 00:28:51,209 Speaker 1: the one 525 00:28:51,619 --> 00:28:55,900 Speaker 1: uh so clearly, even at the rather so almost like 526 00:28:55,910 --> 00:28:59,239 Speaker 1: diplomatic level, the exchange issue is now coming to the fore. 527 00:28:59,380 --> 00:29:01,400 Speaker 1: So let me reverse it around and say that, you know, 528 00:29:01,410 --> 00:29:03,930 Speaker 1: we could talk about yen and one later but the 529 00:29:03,939 --> 00:29:06,040 Speaker 1: US dollar, I mean, what's your sense of the US 530 00:29:06,050 --> 00:29:09,079 Speaker 1: dollar valuation? Uh And uh 531 00:29:09,540 --> 00:29:12,229 Speaker 1: what do you make of, you know, currencies like Yemen, 532 00:29:12,250 --> 00:29:15,010 Speaker 1: one weakening, sharp Yemen. Are they just Correll of one 533 00:29:15,020 --> 00:29:18,489 Speaker 1: another or it's about us being relatively so much stronger 534 00:29:18,500 --> 00:29:20,469 Speaker 1: than the rest of the world, they can absorb high 535 00:29:20,479 --> 00:29:23,479 Speaker 1: interest rates and maintain a US strong dollar. And it 536 00:29:23,489 --> 00:29:25,180 Speaker 1: is the problem for the rest of the world, not 537 00:29:25,189 --> 00:29:26,109 Speaker 1: a problem for the US. 538 00:29:28,140 --> 00:29:31,380 Speaker 2: Um Well, problems in the rest of the world also 539 00:29:31,390 --> 00:29:35,040 Speaker 2: come around usually because cheaper exchange rates also mean that 540 00:29:35,050 --> 00:29:38,040 Speaker 2: um are not cheaper but but but these kind of 541 00:29:38,050 --> 00:29:41,020 Speaker 2: valuations of the exchange rate means that competitors will become 542 00:29:41,030 --> 00:29:45,800 Speaker 2: more competitive and the US economy will become less competitive. 543 00:29:46,239 --> 00:29:49,819 Speaker 2: So at some point, there's gonna be some further widening 544 00:29:49,829 --> 00:29:52,439 Speaker 2: of the deficit in the US and some complaints about 545 00:29:53,079 --> 00:29:57,829 Speaker 2: how could other countries undercut them. Um Again, this has become, 546 00:29:57,839 --> 00:30:00,739 Speaker 2: this would become a big problem. Um If you think 547 00:30:00,750 --> 00:30:04,449 Speaker 2: about the next administration being from a different party, because then, 548 00:30:04,459 --> 00:30:06,819 Speaker 2: you know, economics doesn't play such a big role. It's 549 00:30:06,829 --> 00:30:09,160 Speaker 2: the numbers and how can they export so much to 550 00:30:09,170 --> 00:30:10,239 Speaker 2: us out of the right. 551 00:30:10,979 --> 00:30:15,459 Speaker 2: Um The, the problem will then be that fiscal policy 552 00:30:15,469 --> 00:30:19,300 Speaker 2: will probably not be tightened. Um It's rarely the case 553 00:30:19,310 --> 00:30:22,390 Speaker 2: under populist governments. We're already talking about new tax cuts 554 00:30:22,400 --> 00:30:26,280 Speaker 2: under the Trump administration possibly or an extension of current 555 00:30:26,290 --> 00:30:30,430 Speaker 2: tax cuts. So, um right now, to be honest, um 556 00:30:31,849 --> 00:30:34,910 Speaker 2: if one, if one is a member of a Liberal 557 00:30:34,920 --> 00:30:39,140 Speaker 2: Democratic state like Japan and Korea, are, they will understand 558 00:30:39,150 --> 00:30:44,040 Speaker 2: that the US right now, especially the Biden administration is 559 00:30:44,050 --> 00:30:48,319 Speaker 2: not going to commit political suicide by kind of talking about, 560 00:30:48,599 --> 00:30:52,479 Speaker 2: you know, tax uh tax rises or expenditure cuts and 561 00:30:52,489 --> 00:30:52,770 Speaker 2: the like. 562 00:30:53,680 --> 00:30:57,430 Speaker 2: So I think everybody needs to, I think, understand that 563 00:30:57,439 --> 00:31:01,420 Speaker 2: right now, um the focus of the Biden administration is 564 00:31:01,430 --> 00:31:04,500 Speaker 2: exclusively on November and you can see that in other 565 00:31:04,510 --> 00:31:08,140 Speaker 2: measures as well when they came up with steel and 566 00:31:08,150 --> 00:31:12,010 Speaker 2: aluminum tariffs on the Monday of the, of the spring meetings, 567 00:31:12,020 --> 00:31:16,099 Speaker 2: a great move to get people all excited about bilateralism. 568 00:31:17,670 --> 00:31:20,829 Speaker 2: But you know, they have elections to win and these 569 00:31:20,839 --> 00:31:23,989 Speaker 2: elections in a way are critical for what's gonna happen, 570 00:31:24,000 --> 00:31:27,130 Speaker 2: not just the next four years, but much longer. What's 571 00:31:27,140 --> 00:31:27,800 Speaker 2: happened to 572 00:31:29,099 --> 00:31:32,520 Speaker 2: geopolitical developments around the world. It's a question, I don't 573 00:31:32,530 --> 00:31:35,020 Speaker 2: want to say war and peace, but it gets, it 574 00:31:35,030 --> 00:31:38,239 Speaker 2: gets increasingly up there if you, if you have someone 575 00:31:38,250 --> 00:31:39,839 Speaker 2: who is reasonable in the White House. 576 00:31:40,640 --> 00:31:44,920 Speaker 2: Um So, um I mean, there's gonna be some talk, 577 00:31:44,930 --> 00:31:48,969 Speaker 2: they'll think about how to respond on uh monetary policy 578 00:31:48,979 --> 00:31:50,140 Speaker 2: in these countries, I'm sure, 579 00:31:51,099 --> 00:31:53,579 Speaker 2: but it's going to play out to the disadvantage eventually 580 00:31:53,589 --> 00:31:56,430 Speaker 2: of the US, if there's some export competition that's heating 581 00:31:56,439 --> 00:31:59,160 Speaker 2: up and then, you know, it plays in the hands 582 00:31:59,170 --> 00:32:01,500 Speaker 2: of those who want more terrorists but that, that's a 583 00:32:01,510 --> 00:32:03,989 Speaker 2: bit down the road, I think for the moment, uh 584 00:32:04,000 --> 00:32:06,189 Speaker 2: I think the countries will have no choice but to 585 00:32:06,199 --> 00:32:09,160 Speaker 2: keep up with it. Um The fed is, I think 586 00:32:09,170 --> 00:32:12,819 Speaker 2: in my view, right? Not to um play politics. So 587 00:32:12,829 --> 00:32:15,729 Speaker 2: they need to focus on their mandate, which means they 588 00:32:15,739 --> 00:32:19,109 Speaker 2: may not cut uh anytime soon, who knows how long 589 00:32:19,119 --> 00:32:19,829 Speaker 2: it's going to take 590 00:32:20,550 --> 00:32:22,969 Speaker 2: and other countries will have to accommodate it. I mean, 591 00:32:22,979 --> 00:32:26,520 Speaker 2: it's not their fault obviously, but um you know, if, if, 592 00:32:26,530 --> 00:32:29,290 Speaker 2: if Japan and Korea feel that 593 00:32:30,089 --> 00:32:33,329 Speaker 2: um, the inflation targets are being threatened, well, they need 594 00:32:33,339 --> 00:32:36,349 Speaker 2: to raise rates and it's going to be unfortunate. But, um, 595 00:32:36,660 --> 00:32:40,589 Speaker 2: let's talk again in a year from time when, um, 596 00:32:40,770 --> 00:32:43,709 Speaker 2: there's another, but there's the same administration still and then 597 00:32:43,719 --> 00:32:46,119 Speaker 2: kind of getting really worried about fiscal trends which are 598 00:32:46,130 --> 00:32:49,010 Speaker 2: clearly on a, on a path in the US that 599 00:32:49,020 --> 00:32:51,900 Speaker 2: can go on much until after the uh once the 600 00:32:51,910 --> 00:32:52,709 Speaker 2: elections are over. 601 00:32:53,459 --> 00:32:55,979 Speaker 1: Right? I mean, I never thought that I would see 602 00:32:55,989 --> 00:32:59,160 Speaker 1: trillion dollar interest payment on the US fiscal accounts in 603 00:32:59,170 --> 00:33:02,989 Speaker 1: 2023 2024. But that's where we are at. Martin. You 604 00:33:03,000 --> 00:33:04,750 Speaker 1: spent a number of years covering Japan. I had the 605 00:33:04,760 --> 00:33:06,560 Speaker 1: pleasure of working with you in Japan. So I will 606 00:33:06,569 --> 00:33:08,689 Speaker 1: sort of, you know, end the Asian discussion with a 607 00:33:08,699 --> 00:33:12,130 Speaker 1: little more discourse on Japan. Uh It's, it's a pretty 608 00:33:12,140 --> 00:33:15,859 Speaker 1: remarkable situation where, you know, we had decades of deflationary 609 00:33:15,869 --> 00:33:18,680 Speaker 1: dynamic and unconventional monetary policy 610 00:33:18,930 --> 00:33:22,910 Speaker 1: and now we have the makings of inflation beginning to 611 00:33:22,920 --> 00:33:26,400 Speaker 1: become an issue. Uh but more importantly, that extremely weak 612 00:33:26,410 --> 00:33:29,310 Speaker 1: yen at any sort of reasonable measure, one would say 613 00:33:29,319 --> 00:33:31,859 Speaker 1: it's substantially undervalued. 614 00:33:32,540 --> 00:33:36,040 Speaker 1: What, what do you think of, you know, Boj and Governor, 615 00:33:36,359 --> 00:33:39,300 Speaker 1: h I mean, does it make sense for them to 616 00:33:39,550 --> 00:33:42,170 Speaker 1: uh you know, be fairly aggressive on monetary policy? Because 617 00:33:42,180 --> 00:33:45,900 Speaker 1: you and I remember uh 23 years ago Japan tried 618 00:33:45,910 --> 00:33:49,160 Speaker 1: to normalize monetary policy and it ended up being in recession. 619 00:33:49,849 --> 00:33:50,140 Speaker 2: Yeah. 620 00:33:50,949 --> 00:33:53,219 Speaker 2: So again, I said, you know, if, if they feel 621 00:33:53,229 --> 00:33:55,699 Speaker 2: that inflation is getting a bit out of control then 622 00:33:55,709 --> 00:33:58,099 Speaker 2: they need to do something. But to some extent it 623 00:33:58,109 --> 00:34:00,869 Speaker 2: may be helpful for Japan. I don't know exactly the 624 00:34:00,880 --> 00:34:04,430 Speaker 2: latest CP I readings. But, um, there's a, there's a 625 00:34:04,439 --> 00:34:07,579 Speaker 2: reason they've gone off their zero interest rate policy, maybe 626 00:34:07,589 --> 00:34:11,570 Speaker 2: they can absorb a little bit of that. Um, they've become, 627 00:34:12,020 --> 00:34:16,090 Speaker 2: you know, almost like a post aging country now. It, 628 00:34:16,100 --> 00:34:18,009 Speaker 2: it seems like they've gone through the worst of the 629 00:34:18,020 --> 00:34:19,810 Speaker 2: aging process. And now, um, 630 00:34:20,438 --> 00:34:23,029 Speaker 2: I think there were some good pieces on Bloomberg the 631 00:34:23,039 --> 00:34:26,168 Speaker 2: other day. Um, Bloomberg says, well, you know, the demographics 632 00:34:26,178 --> 00:34:29,308 Speaker 2: are much worse now, in some other countries, Europe, Japan 633 00:34:29,319 --> 00:34:33,319 Speaker 2: is actually not stabilizing, but it's not so bad anymore. 634 00:34:33,329 --> 00:34:34,658 Speaker 2: So they're over to become. 635 00:34:35,459 --> 00:34:38,949 Speaker 2: And, um, they've been surprising everybody I think with their 636 00:34:38,959 --> 00:34:42,919 Speaker 2: resilience and their inventiveness and that exchange rate will have, 637 00:34:42,949 --> 00:34:47,310 Speaker 2: will help their companies, um, for a while. But, um, 638 00:34:47,330 --> 00:34:50,270 Speaker 2: clearly there is a manpower constraint and, uh, you know, 639 00:34:50,280 --> 00:34:53,600 Speaker 2: when once that kind of begins to bite too much 640 00:34:53,610 --> 00:34:56,760 Speaker 2: into wages and competitiveness, I think BOJ will need to act. 641 00:34:57,350 --> 00:35:01,090 Speaker 2: So maybe it's becoming a bit more like, um normal country. 642 00:35:01,530 --> 00:35:03,929 Speaker 2: But again, um, once the elections are over in the 643 00:35:03,939 --> 00:35:08,290 Speaker 2: US and everything goes, um, as many people around the 644 00:35:08,300 --> 00:35:12,089 Speaker 2: globe hope then there should be some, I would expect 645 00:35:12,100 --> 00:35:15,370 Speaker 2: some correction on fiscal policy after that because you know, 646 00:35:15,679 --> 00:35:18,850 Speaker 2: there's some very good economists in that administration and they 647 00:35:18,860 --> 00:35:21,320 Speaker 2: know the trends just as much as we do. So 648 00:35:21,330 --> 00:35:24,290 Speaker 2: I think these countries will give the USA little bit 649 00:35:24,300 --> 00:35:26,259 Speaker 2: of the benefit of the doubt for a couple of 650 00:35:26,270 --> 00:35:26,810 Speaker 2: months 651 00:35:27,120 --> 00:35:31,229 Speaker 2: and then we'll see um if nothing happens, then next 652 00:35:31,239 --> 00:35:33,780 Speaker 2: year will be the the time for much more serious 653 00:35:33,790 --> 00:35:34,699 Speaker 2: discussions about 654 00:35:35,389 --> 00:35:37,389 Speaker 2: global imbalances again. So 655 00:35:37,399 --> 00:35:40,590 Speaker 1: Martin, in your view, consolidation in the fiscal side in 656 00:35:40,600 --> 00:35:44,489 Speaker 1: the United States would lead to some degree of curtailing 657 00:35:44,500 --> 00:35:47,860 Speaker 1: of demand, uh, which then ought to play into a 658 00:35:47,870 --> 00:35:51,010 Speaker 1: weakening of the US dollar. And that should give some 659 00:35:51,020 --> 00:35:53,090 Speaker 1: degree of breathing room for the Japan and the careers 660 00:35:53,100 --> 00:35:53,250 Speaker 1: of the 661 00:35:53,260 --> 00:35:53,610 Speaker 2: world. 662 00:35:54,750 --> 00:35:56,770 Speaker 2: Yeah, I think so. I mean, once the fed starts 663 00:35:56,780 --> 00:36:00,159 Speaker 2: is able to start easing rates, I think then things 664 00:36:00,169 --> 00:36:02,949 Speaker 2: should adjust a bit. I mean, a lot of what 665 00:36:02,959 --> 00:36:05,969 Speaker 2: we're seeing now is being driven by, by fears about 666 00:36:05,979 --> 00:36:10,899 Speaker 2: the unsustainable US fiscal position. Right. So 10 year yields 667 00:36:10,909 --> 00:36:14,009 Speaker 2: are moving very fast again. Um, they hit last year's 668 00:36:14,020 --> 00:36:18,040 Speaker 2: level and there's fear that there's going to be more so, 669 00:36:18,500 --> 00:36:22,080 Speaker 2: you know, people, some, some, some capital is kind of 670 00:36:22,090 --> 00:36:24,479 Speaker 2: coming into the yes and going like, great, we're going 671 00:36:24,489 --> 00:36:29,250 Speaker 2: to use these rates. Um, others are more fearful. But I, 672 00:36:29,260 --> 00:36:32,030 Speaker 2: I think there's a lot of it driven by uncertainty 673 00:36:32,040 --> 00:36:34,100 Speaker 2: right now and I think that things will come down 674 00:36:34,110 --> 00:36:38,360 Speaker 2: once we're back into some quieter um, waters hopefully. 675 00:36:39,120 --> 00:36:46,739 Speaker 2: Um, and also assuming that there's no financial accident in between. Right? 676 00:36:46,750 --> 00:36:49,590 Speaker 2: And obviously the faster things change, the more risk there 677 00:36:49,600 --> 00:36:51,020 Speaker 2: is that something goes up somewhere, 678 00:36:51,300 --> 00:36:54,889 Speaker 1: right? I was plotting the GDP numbers that came out 679 00:36:54,899 --> 00:36:57,350 Speaker 1: yesterday for the United States. And of course, along with 680 00:36:57,360 --> 00:36:59,939 Speaker 1: the growth data and the national account data, you get 681 00:36:59,949 --> 00:37:02,820 Speaker 1: all those different consumption expenditure deflator 682 00:37:03,560 --> 00:37:09,719 Speaker 1: the first quarter, consumer expenditure deflator and the core consumer 683 00:37:09,729 --> 00:37:13,199 Speaker 1: expenditure deflate did not look good. Martin uh used the 684 00:37:13,209 --> 00:37:17,000 Speaker 1: chart is sort of alarming that from mid 22 onward, 685 00:37:17,010 --> 00:37:19,500 Speaker 1: you see this inflation going all the way to the 686 00:37:19,510 --> 00:37:22,850 Speaker 1: end of 2023 and then there's a really unpleasant bumper 687 00:37:22,860 --> 00:37:24,819 Speaker 1: for the first quarter of 2024. 688 00:37:25,120 --> 00:37:28,820 Speaker 1: Um So what if that baseline scenario which I think 689 00:37:28,830 --> 00:37:30,659 Speaker 1: both you and I would like to see pan out 690 00:37:30,669 --> 00:37:33,300 Speaker 1: which is some softening of demand, some softening of the 691 00:37:33,310 --> 00:37:37,179 Speaker 1: inflation and then some rate cuts. Uh What if we 692 00:37:37,189 --> 00:37:41,239 Speaker 1: don't get that? And we have all of 2024 without 693 00:37:41,250 --> 00:37:44,330 Speaker 1: any rate cuts in the US? Are we then looking 694 00:37:44,340 --> 00:37:46,780 Speaker 1: at some serious risk of emerging market crisis? 695 00:37:48,659 --> 00:37:51,049 Speaker 2: Well, yeah, well, that's a different story. We haven't talked 696 00:37:51,060 --> 00:37:54,300 Speaker 2: about it. Yeah. Um um because we were focusing, I 697 00:37:54,310 --> 00:37:57,040 Speaker 2: guess in Japan and Korea. But yeah, and I mean, 698 00:37:57,050 --> 00:37:59,209 Speaker 2: there's also a possibility the fed may raise again at 699 00:37:59,219 --> 00:38:02,449 Speaker 2: some point. Although, and you've talked about that with um 700 00:38:02,570 --> 00:38:05,600 Speaker 2: with your, with your counterparts, I think the last couple 701 00:38:05,610 --> 00:38:08,639 Speaker 2: of times um there are some factors that 702 00:38:09,830 --> 00:38:13,459 Speaker 2: may suggest that well, the long term or medium term 703 00:38:13,469 --> 00:38:16,250 Speaker 2: downward glide path for inflation is still there like, you know, 704 00:38:16,260 --> 00:38:19,790 Speaker 2: housing and the like, but I'm not a market analyst. 705 00:38:19,800 --> 00:38:22,090 Speaker 2: So um you know, much more about that than I do. 706 00:38:22,429 --> 00:38:26,120 Speaker 2: But yeah, there's a lot of uncertainty now, emerging markets 707 00:38:26,129 --> 00:38:26,569 Speaker 2: um 708 00:38:27,709 --> 00:38:32,310 Speaker 2: have come through COVID rather well with all the market 709 00:38:32,320 --> 00:38:33,479 Speaker 2: generations and 710 00:38:34,389 --> 00:38:38,090 Speaker 2: supply cuts and inflation uh supply chain uh problems and, 711 00:38:38,100 --> 00:38:41,860 Speaker 2: and uh inflation, many have been quite alert on the 712 00:38:41,870 --> 00:38:45,469 Speaker 2: monetary policy front tightened early, were able to, to loosen 713 00:38:45,479 --> 00:38:48,560 Speaker 2: up again, couldn't totally um 714 00:38:49,370 --> 00:38:53,070 Speaker 2: uh avoid a peak in inflation, of course, but I 715 00:38:53,080 --> 00:38:56,049 Speaker 2: think we're able to manage it in a very responsible 716 00:38:56,060 --> 00:38:59,199 Speaker 2: way and kept stability and kept capital flows in check. 717 00:38:59,510 --> 00:39:03,270 Speaker 2: So very good economic management. And I would expect that, 718 00:39:03,280 --> 00:39:05,790 Speaker 2: you know, some of the large countries especially um 719 00:39:06,620 --> 00:39:09,780 Speaker 2: in Asia that they will continue to do very well. 720 00:39:10,120 --> 00:39:13,129 Speaker 2: They've just grown also so big and, and, and have 721 00:39:13,139 --> 00:39:16,209 Speaker 2: gotten so good at managing their economies that um 722 00:39:16,929 --> 00:39:20,679 Speaker 2: barring some major shock somewhere else in the financial world, 723 00:39:20,689 --> 00:39:23,709 Speaker 2: they should I think relatively well, but there's a big 724 00:39:23,719 --> 00:39:29,060 Speaker 2: bunch of emerging markets um elsewhere that um may also 725 00:39:29,070 --> 00:39:31,790 Speaker 2: have been jumping on the fiscal bandwagon and you may 726 00:39:31,800 --> 00:39:35,199 Speaker 2: not see it yet, but coming you know, coming into 727 00:39:35,209 --> 00:39:40,000 Speaker 2: next year may require a lot more financing, may have to, to, 728 00:39:40,020 --> 00:39:41,580 Speaker 2: uh you know, roll over that 729 00:39:42,169 --> 00:39:44,429 Speaker 2: and um may not have done this all in the 730 00:39:44,439 --> 00:39:47,899 Speaker 2: local currencies and even if so maybe hit by some 731 00:39:48,000 --> 00:39:50,820 Speaker 2: interest shocks because of, you know, what, what the US 732 00:39:50,830 --> 00:39:54,469 Speaker 2: is doing. So, yeah, the potential is there. Um I 733 00:39:54,479 --> 00:39:56,860 Speaker 2: wouldn't be surprised. Um 734 00:39:57,719 --> 00:40:00,009 Speaker 2: I've been very worried before COVID when I was still 735 00:40:00,020 --> 00:40:02,739 Speaker 2: at the fund about emerging markets and I've been proven 736 00:40:02,750 --> 00:40:05,929 Speaker 2: wrong to some extent. Um So I wouldn't kind of 737 00:40:05,949 --> 00:40:10,800 Speaker 2: buy wolf necessarily on emerging markets as a whole. I've 738 00:40:10,810 --> 00:40:13,500 Speaker 2: learned my lesson there. But um 739 00:40:14,270 --> 00:40:16,679 Speaker 2: for some countries, it's gonna get more and more difficult. 740 00:40:16,689 --> 00:40:19,770 Speaker 2: I don't want to mention any names but um look at, 741 00:40:19,780 --> 00:40:23,129 Speaker 2: look at fiscal paths in in emerging markets and then 742 00:40:23,139 --> 00:40:26,050 Speaker 2: you'll then you'll see where maybe there are some problem 743 00:40:26,060 --> 00:40:29,899 Speaker 2: candidates and we're not even talking about the Argentina of 744 00:40:29,909 --> 00:40:30,638 Speaker 2: this world. Yeah. 745 00:40:31,629 --> 00:40:34,439 Speaker 1: Uh Martin, I have no problems mentioning names but even 746 00:40:34,449 --> 00:40:36,929 Speaker 1: beyond the emerging market space. And going back to our 747 00:40:36,939 --> 00:40:40,850 Speaker 1: early discussion on Japan and Korea, particularly Korea, I mean, 748 00:40:40,860 --> 00:40:44,870 Speaker 1: you know, huge housing overhang, lots of debt issue, lots 749 00:40:44,879 --> 00:40:48,270 Speaker 1: of short term, short duration risk. Uh and if rates 750 00:40:48,280 --> 00:40:50,209 Speaker 1: do remain where they are in the US for the 751 00:40:50,219 --> 00:40:53,020 Speaker 1: rest of the year, I do wonder if that makes 752 00:40:53,030 --> 00:40:56,659 Speaker 1: life difficult for our former IMF colleague who's now heading 753 00:40:56,669 --> 00:40:58,310 Speaker 1: the Bank of Korea 754 00:40:58,679 --> 00:41:02,429 Speaker 1: Uh So, um, but you're right. Uh, we probably would 755 00:41:02,439 --> 00:41:05,399 Speaker 1: have been convinced if two years ago somebody told us 756 00:41:05,409 --> 00:41:07,219 Speaker 1: rates would be where they are now for a prolonged period, 757 00:41:07,229 --> 00:41:10,350 Speaker 1: we would have predicted major rippling crisis in various parts 758 00:41:10,360 --> 00:41:12,659 Speaker 1: of em. And DM. And so far the absorption capacity 759 00:41:12,669 --> 00:41:14,860 Speaker 1: of the global economy has been pretty impressive. 760 00:41:15,770 --> 00:41:18,699 Speaker 2: Yeah. No, it's been interesting. Right. The big blow up, uh, 761 00:41:18,709 --> 00:41:22,239 Speaker 2: from this tightening episode that the FED went through after 762 00:41:22,250 --> 00:41:23,260 Speaker 2: missing it first 763 00:41:23,909 --> 00:41:27,090 Speaker 2: uh was in, in the US itself, the regional banks 764 00:41:27,100 --> 00:41:30,340 Speaker 2: and then credit, of course. Right. So that was really interesting. 765 00:41:30,350 --> 00:41:33,570 Speaker 2: It didn't have any effects beyond that too much. Um 766 00:41:34,310 --> 00:41:36,000 Speaker 2: So hopefully we don't see it now, 767 00:41:36,860 --> 00:41:40,560 Speaker 2: but the usual um rule is, I guess if something 768 00:41:40,649 --> 00:41:43,399 Speaker 2: really unexpected happens and it happens fast, like 769 00:41:44,060 --> 00:41:46,399 Speaker 2: a change in the red outlook in the US to, 770 00:41:46,409 --> 00:41:48,719 Speaker 2: to the upside that could trigger some 771 00:41:49,360 --> 00:41:53,810 Speaker 2: more upheaval. I mean, again, you talked about private equity, 772 00:41:53,820 --> 00:41:56,070 Speaker 2: I think before there's a lot of uncertainty there in 773 00:41:56,080 --> 00:42:00,379 Speaker 2: the non-bank financial sector. Um the GFSR, the, the global 774 00:42:00,389 --> 00:42:04,219 Speaker 2: financial stability report of the IMF looked into it, but 775 00:42:04,229 --> 00:42:08,040 Speaker 2: overall the the assessment was pretty sanguine and also when 776 00:42:08,050 --> 00:42:10,540 Speaker 2: you talk to people elsewhere, I mean, there is nobody 777 00:42:10,550 --> 00:42:13,379 Speaker 2: who kind of rings the alarm bells big time. 778 00:42:14,189 --> 00:42:17,090 Speaker 2: But um we've been too long in this business time. 779 00:42:17,100 --> 00:42:18,409 Speaker 2: All right, we know that something 780 00:42:19,199 --> 00:42:23,120 Speaker 2: can happen very quickly and then everybody says, why didn't 781 00:42:23,129 --> 00:42:25,129 Speaker 2: you see it before? Yeah. 782 00:42:25,739 --> 00:42:27,610 Speaker 1: I mean, if only somebody were to go back to 783 00:42:27,620 --> 00:42:29,739 Speaker 1: the 2006 US article for report 784 00:42:30,540 --> 00:42:33,560 Speaker 1: it's pretty sanguine, you know. And then one year later 785 00:42:34,129 --> 00:42:34,139 Speaker 1: I 786 00:42:34,780 --> 00:42:36,770 Speaker 2: think I already moved off the team back then. 787 00:42:38,040 --> 00:42:41,219 Speaker 1: I was not pointing any fingers. Martin, I think there's 788 00:42:41,229 --> 00:42:43,010 Speaker 1: a different Martin who was involved there. 789 00:42:43,689 --> 00:42:46,659 Speaker 2: No, actually, I mean, but, but it's interesting you bring 790 00:42:46,669 --> 00:42:49,759 Speaker 2: this up because, um, I would like to see this 791 00:42:49,770 --> 00:42:52,479 Speaker 2: more from the fun look. I mean, back in, 792 00:42:53,310 --> 00:42:56,010 Speaker 2: uh, I think it was 06 or 07 793 00:42:56,739 --> 00:42:58,540 Speaker 2: and I had actually moved off the team, but I 794 00:42:58,550 --> 00:43:02,000 Speaker 2: did cover the housing market when it was still kind of, ok, 795 00:43:02,010 --> 00:43:05,169 Speaker 2: it was running up. Um, but, but the IMF at 796 00:43:05,179 --> 00:43:06,719 Speaker 2: some point called the US recession 797 00:43:07,620 --> 00:43:10,879 Speaker 2: and uh the, the team did it very deliberately. Um, 798 00:43:11,129 --> 00:43:14,120 Speaker 2: and they were kind of right. I think it wasn't 799 00:43:14,129 --> 00:43:17,659 Speaker 2: the 2007 report, I believe they called the US recession, 800 00:43:18,209 --> 00:43:20,759 Speaker 2: you know, and they had to run against some, you know, 801 00:43:20,770 --> 00:43:25,399 Speaker 2: resistance uh internally and externally. Well, what they didn't see 802 00:43:25,409 --> 00:43:28,020 Speaker 2: coming was a global financial crisis but they did, they 803 00:43:28,030 --> 00:43:31,469 Speaker 2: did see the, the, the, the, the situation change in 804 00:43:31,479 --> 00:43:32,360 Speaker 2: the US and 805 00:43:33,260 --> 00:43:36,600 Speaker 2: I would wish the, the fund in general had more 806 00:43:36,610 --> 00:43:39,409 Speaker 2: guts of calling out countries on this. It's just too 807 00:43:39,419 --> 00:43:42,759 Speaker 2: important and, you know, they can be wrong, of course. But, um, 808 00:43:43,399 --> 00:43:45,939 Speaker 2: they, they need to do their job, they need to 809 00:43:45,949 --> 00:43:49,760 Speaker 2: be led to do their job. And so, um, you know, 810 00:43:49,770 --> 00:43:52,239 Speaker 2: if there is a shift or now a bit more 811 00:43:52,250 --> 00:43:55,560 Speaker 2: awareness and focus on surveillance at the IMF if the 812 00:43:55,570 --> 00:43:58,489 Speaker 2: spring meetings may give you some hope. I mean, the 813 00:43:58,500 --> 00:44:01,199 Speaker 2: US fiscal deficit was obvious they can move around that, 814 00:44:01,209 --> 00:44:03,770 Speaker 2: but there's also other issues that need to be addressed 815 00:44:04,209 --> 00:44:07,879 Speaker 2: and if there's a move back toward greater surveillance emphasis, 816 00:44:07,889 --> 00:44:09,929 Speaker 2: that would be all the better for the global economy. 817 00:44:10,379 --> 00:44:11,459 Speaker 1: Yeah, absolutely. 818 00:44:11,909 --> 00:44:14,669 Speaker 1: Uh So in terms of surveillance, uh Martin, uh when 819 00:44:14,679 --> 00:44:17,010 Speaker 1: you and I met in Morocco during the annual meetings 820 00:44:17,020 --> 00:44:19,649 Speaker 1: last year, uh there was a lot of chat, there 821 00:44:19,659 --> 00:44:21,840 Speaker 1: was a high profile report on the cost of geo 822 00:44:21,889 --> 00:44:25,270 Speaker 1: economic fragmentation. So earlier in the conversation, you've already touched 823 00:44:25,280 --> 00:44:26,319 Speaker 1: upon that issue that 824 00:44:26,830 --> 00:44:30,649 Speaker 1: in the name of security resilience of supply chain, some 825 00:44:30,659 --> 00:44:36,259 Speaker 1: degree of uring offshoring is inevitable. Uh Now, through this meetings, 826 00:44:36,270 --> 00:44:39,449 Speaker 1: we also saw the am continue to produce research underscoring this. 827 00:44:39,669 --> 00:44:41,959 Speaker 1: Uh And I think I saw a speech by GTA 828 00:44:42,179 --> 00:44:45,010 Speaker 1: Goinna given in November where she basically pointed out that 829 00:44:45,020 --> 00:44:47,319 Speaker 1: all we're doing is lengthening the global supply chain. We're 830 00:44:47,330 --> 00:44:50,439 Speaker 1: not necessarily creating a more resilient system. We're just saying 831 00:44:50,719 --> 00:44:52,520 Speaker 1: I'm not going to import from China and then China 832 00:44:52,530 --> 00:44:54,280 Speaker 1: goes and invest in Mexico and then I end up 833 00:44:54,370 --> 00:44:57,219 Speaker 1: importing from Mexico. Does it really make us more resilient? 834 00:44:57,429 --> 00:44:59,729 Speaker 1: So I want to hear your take on this whole 835 00:44:59,739 --> 00:45:01,459 Speaker 1: geo economic fragmentation thesis. 836 00:45:03,489 --> 00:45:08,090 Speaker 2: So, um if you impose constraints on the system, I 837 00:45:08,100 --> 00:45:12,489 Speaker 2: think by default, it's gonna be less efficient than um otherwise, right. 838 00:45:12,500 --> 00:45:16,149 Speaker 2: So that's the basic optimization theory now. 839 00:45:16,850 --> 00:45:19,590 Speaker 2: Has the world found a good way to kind of 840 00:45:19,600 --> 00:45:23,109 Speaker 2: work around some of these restrictions? It's actually quite amazing. 841 00:45:23,360 --> 00:45:30,580 Speaker 2: Um For example, after the Iran Israel conflict escalated and, 842 00:45:30,590 --> 00:45:35,439 Speaker 2: and the uh the Yemenite militias started shooting at the 843 00:45:35,479 --> 00:45:38,270 Speaker 2: Gulf of the Strait of Hormuz and the whole Gulf, 844 00:45:38,439 --> 00:45:41,949 Speaker 2: how seamlessly things seem to have been rerouted. 845 00:45:42,770 --> 00:45:46,649 Speaker 2: Um Just like during COVID, I mean, it took some time, obviously, 846 00:45:46,659 --> 00:45:48,899 Speaker 2: but um all of a sudden, you know, things kept 847 00:45:48,909 --> 00:45:51,989 Speaker 2: flowing again. Uh you bottlenecks were at rest 848 00:45:52,729 --> 00:45:57,649 Speaker 2: uh restrictions on, on certain Chinese imports, you know, can 849 00:45:57,659 --> 00:46:00,919 Speaker 2: be overcome. So it seems like there is there is 850 00:46:00,929 --> 00:46:01,750 Speaker 2: this um 851 00:46:02,399 --> 00:46:07,080 Speaker 2: ability of, of uh the global trade network to absorb 852 00:46:07,090 --> 00:46:08,260 Speaker 2: quite a number of shocks. 853 00:46:09,669 --> 00:46:10,169 Speaker 2: No. 854 00:46:10,909 --> 00:46:14,790 Speaker 2: Um perhaps that is because we haven't really seen either 855 00:46:14,800 --> 00:46:18,810 Speaker 2: side engaging in a full blown trade war yet. And 856 00:46:18,820 --> 00:46:21,770 Speaker 2: I say yet because as you know, one of the 857 00:46:21,780 --> 00:46:24,509 Speaker 2: candidates here in the US has said that there's going 858 00:46:24,520 --> 00:46:27,830 Speaker 2: to be big tariffs on everything from China uh from, 859 00:46:27,840 --> 00:46:30,169 Speaker 2: you know, baby diapers to high end chips. 860 00:46:30,919 --> 00:46:33,989 Speaker 2: And what that will do if China retaliates, I don't. 861 00:46:34,219 --> 00:46:38,239 Speaker 2: But clearly this the specter of more constraints on the 862 00:46:38,250 --> 00:46:42,449 Speaker 2: global economy is hanging over us. That's why these elections 863 00:46:42,459 --> 00:46:43,479 Speaker 2: are also so important. 864 00:46:44,179 --> 00:46:47,219 Speaker 2: Um And um 865 00:46:48,010 --> 00:46:51,549 Speaker 2: how long the system can work around all these constraints 866 00:46:51,560 --> 00:46:54,800 Speaker 2: remains to be seen. Now, China is very proactive. Um 867 00:46:55,030 --> 00:46:58,580 Speaker 2: as you and I discussed, I threw over lunch too bad. 868 00:46:58,590 --> 00:47:01,889 Speaker 2: We didn't record it back then. But um uh you 869 00:47:01,899 --> 00:47:05,639 Speaker 2: were quite amazed by the amount of investment, for example 870 00:47:05,649 --> 00:47:09,290 Speaker 2: of China in Mexico. Um Of course, in Vietnam, in 871 00:47:09,300 --> 00:47:12,189 Speaker 2: all of Asia, there's a lot of Chinese companies that 872 00:47:12,199 --> 00:47:15,750 Speaker 2: are setting up shop there. Um because that way they 873 00:47:15,760 --> 00:47:17,750 Speaker 2: can work around some of the constraints. 874 00:47:18,399 --> 00:47:19,060 Speaker 2: Um 875 00:47:19,899 --> 00:47:23,320 Speaker 2: And um you know, I I think this is good 876 00:47:23,330 --> 00:47:26,629 Speaker 2: because it also means that um in a sense, the 877 00:47:26,639 --> 00:47:29,819 Speaker 2: the the globalization increases, more countries have a stake in 878 00:47:29,830 --> 00:47:33,080 Speaker 2: free investment and trade, right? Because in the end, it 879 00:47:33,090 --> 00:47:37,049 Speaker 2: provides jobs in Mexico or elsewhere for people, even if 880 00:47:37,060 --> 00:47:40,399 Speaker 2: they work for a Chinese company. Um the Chinese are 881 00:47:40,409 --> 00:47:45,439 Speaker 2: also actively getting into Europe. Um President Xi is, is 882 00:47:45,449 --> 00:47:48,000 Speaker 2: visiting Hungary of all places where they got 883 00:47:48,590 --> 00:47:52,729 Speaker 2: um uh approval to open up big. Uh I think 884 00:47:52,739 --> 00:47:55,439 Speaker 2: it's a uh some it company, I have to look 885 00:47:55,449 --> 00:47:58,649 Speaker 2: it up again. Uh It's a huge green field investment 886 00:47:58,659 --> 00:48:02,889 Speaker 2: um into the European Union and some other countries also. 887 00:48:03,389 --> 00:48:07,649 Speaker 2: So um China itself is preparing for it. Um The 888 00:48:07,659 --> 00:48:11,290 Speaker 2: US is trying to get together alliances on its part 889 00:48:11,300 --> 00:48:15,409 Speaker 2: to work around this. Everybody's grambling for minerals and metals 890 00:48:15,419 --> 00:48:17,070 Speaker 2: and all this. So 891 00:48:17,590 --> 00:48:19,169 Speaker 2: I think we're still at a point where it's in 892 00:48:19,179 --> 00:48:23,089 Speaker 2: everybody's interest to keep things going. Um, I don't see 893 00:48:23,929 --> 00:48:27,889 Speaker 2: any big confrontation yet. If the Biden administration can continue, 894 00:48:27,899 --> 00:48:30,110 Speaker 2: I think it's going to continue that way. But, 895 00:48:30,989 --> 00:48:35,750 Speaker 2: um, if political relations deteriorate, then we may be into 896 00:48:35,760 --> 00:48:38,889 Speaker 2: more of a full blown trade war and then, um, 897 00:48:39,270 --> 00:48:41,830 Speaker 2: I don't know whether the world will separate into 898 00:48:42,530 --> 00:48:45,699 Speaker 2: different camps or whether the middle is strong enough to 899 00:48:45,709 --> 00:48:49,350 Speaker 2: tell the big guys. Well, you know, sorry, but we cannot, 900 00:48:49,419 --> 00:48:52,589 Speaker 2: we cannot decide between of you. You have to continue 901 00:48:52,600 --> 00:48:55,330 Speaker 2: to work with, with us and we have to continue 902 00:48:55,340 --> 00:48:57,239 Speaker 2: to work with both of you. I don't know, it's 903 00:48:57,250 --> 00:49:01,509 Speaker 2: an interesting situation, but I don't see that um 904 00:49:02,250 --> 00:49:05,989 Speaker 2: uh fragmentation uh is necessarily continuing in a way that 905 00:49:06,000 --> 00:49:08,050 Speaker 2: allows all actors to adjust smoothly, 906 00:49:08,860 --> 00:49:12,000 Speaker 2: it can blow up and it can blow up for 907 00:49:12,010 --> 00:49:15,179 Speaker 2: other reasons. It can also become much more difficult if, 908 00:49:16,189 --> 00:49:18,689 Speaker 2: if Russia has big wins in Ukraine and the whole 909 00:49:18,699 --> 00:49:22,570 Speaker 2: European situation is different and Europe starts kind of uh 910 00:49:23,179 --> 00:49:25,810 Speaker 2: turning on itself and, and tearing itself apart and in 911 00:49:25,820 --> 00:49:26,889 Speaker 2: how to respond, 912 00:49:28,120 --> 00:49:30,270 Speaker 2: it's very difficult to say, but there's a lot of 913 00:49:30,280 --> 00:49:32,979 Speaker 2: uncertainties out there. And I wouldn't be so sanguine about 914 00:49:33,419 --> 00:49:37,540 Speaker 2: the future of globalization so far about the future of 915 00:49:37,550 --> 00:49:40,100 Speaker 2: fragmentation so far. It's been OK, 916 00:49:40,820 --> 00:49:42,949 Speaker 2: we could live with it, but it doesn't mean that 917 00:49:42,959 --> 00:49:44,820 Speaker 2: it's going to continue that way. Right. 918 00:49:44,830 --> 00:49:47,300 Speaker 1: Since we just touched on Europe, Martin, let's just jump 919 00:49:47,310 --> 00:49:51,409 Speaker 1: over there. Uh, your thoughts on Europe? I mean, we've 920 00:49:51,419 --> 00:49:53,949 Speaker 1: seen the US sort of, you know, really have a 921 00:49:53,959 --> 00:49:59,389 Speaker 1: turbocharge public sector driven economic recovery and even though yesterday's 922 00:49:59,399 --> 00:50:03,179 Speaker 1: GDP numbers were slightly below expectations, still pretty strong numbers 923 00:50:03,189 --> 00:50:05,879 Speaker 1: from there, China, we all know it has problems and 924 00:50:05,889 --> 00:50:07,629 Speaker 1: it's trying to work through that. So, where is, you know, 925 00:50:07,649 --> 00:50:09,120 Speaker 1: Europe in the middle of all this? 926 00:50:10,669 --> 00:50:13,529 Speaker 2: Well, um 927 00:50:14,520 --> 00:50:18,750 Speaker 2: Europe is, is, is a pretty, pretty sad state right now. 928 00:50:18,760 --> 00:50:23,040 Speaker 2: I mean, politically, economically, I think they're turning the corner slowly. 929 00:50:23,610 --> 00:50:27,520 Speaker 2: Um again, the fund was very sanguine on their kind 930 00:50:27,530 --> 00:50:31,469 Speaker 2: of recovery. Um There's room for rate cuts perhaps at 931 00:50:31,479 --> 00:50:35,060 Speaker 2: some point with inflation coming down. But um 932 00:50:36,020 --> 00:50:36,840 Speaker 2: it's, 933 00:50:37,760 --> 00:50:39,139 Speaker 2: it's, it's the shape of 934 00:50:39,929 --> 00:50:43,879 Speaker 2: in the European relations that kind of gives uh reason 935 00:50:43,889 --> 00:50:45,939 Speaker 2: to be concerned and it's going to carry through to 936 00:50:45,949 --> 00:50:50,429 Speaker 2: economics at some point. Um The, the Germans are kind 937 00:50:50,439 --> 00:50:53,530 Speaker 2: of caught in their coalition disputes and they're not really ready, 938 00:50:53,540 --> 00:50:56,810 Speaker 2: I think for big action. Um the problem with Europe 939 00:50:56,820 --> 00:50:59,839 Speaker 2: is that it cannot really compete the way it is 940 00:50:59,850 --> 00:51:01,679 Speaker 2: set up right now with the big guys. 941 00:51:02,570 --> 00:51:06,830 Speaker 2: And in order to get there, they need reforms inside 942 00:51:06,840 --> 00:51:10,320 Speaker 2: the European Union. Everybody is talking about, you know, 943 00:51:11,409 --> 00:51:14,388 Speaker 2: the, the, the the banking and the common banking union 944 00:51:14,399 --> 00:51:18,189 Speaker 2: capital markets and all that. Um I think it's, it 945 00:51:18,199 --> 00:51:19,870 Speaker 2: needs more than that um 946 00:51:20,949 --> 00:51:24,850 Speaker 2: it needs a willingness to not always push your national 947 00:51:24,860 --> 00:51:28,330 Speaker 2: champions when it comes to all sorts of European projects. 948 00:51:28,340 --> 00:51:29,850 Speaker 2: Think about European defense. 949 00:51:30,929 --> 00:51:33,709 Speaker 2: Oh man, it's so difficult to kind of come to 950 00:51:33,719 --> 00:51:37,909 Speaker 2: some common understanding because underneath every initiative 951 00:51:38,729 --> 00:51:42,339 Speaker 2: is always a fight about so which parts of my 952 00:51:42,350 --> 00:51:46,209 Speaker 2: domestic industry will benefit from. So it's also a mindset. 953 00:51:46,219 --> 00:51:49,649 Speaker 2: It's Europe doesn't really have a European mindset yet. It's 954 00:51:49,659 --> 00:51:50,300 Speaker 2: still uh 955 00:51:51,090 --> 00:51:53,109 Speaker 2: uh a number of countries that 956 00:51:53,820 --> 00:51:57,260 Speaker 2: have kind of given up some of the sovereignty, but 957 00:51:57,270 --> 00:52:00,310 Speaker 2: they're still very sovereign. I mean, you don't have to 958 00:52:00,320 --> 00:52:02,860 Speaker 2: be in Hungary necessarily to see that. Right. There are 959 00:52:02,870 --> 00:52:05,979 Speaker 2: some states that are much more extreme on this one 960 00:52:05,989 --> 00:52:09,000 Speaker 2: than others. But as long as Germany and France can 961 00:52:09,010 --> 00:52:11,830 Speaker 2: agree on things which they seem to have difficulties doing 962 00:52:11,840 --> 00:52:15,359 Speaker 2: at the moment because they are both pushing their um 963 00:52:15,459 --> 00:52:18,800 Speaker 2: domestic interests first in the name of European 964 00:52:19,600 --> 00:52:23,939 Speaker 2: uh action. Uh You will not see much action. So 965 00:52:24,550 --> 00:52:27,299 Speaker 2: it doesn't, it doesn't, it's not just the mechanics of 966 00:52:27,310 --> 00:52:30,489 Speaker 2: a common market, it's also the, the heart and soul 967 00:52:30,500 --> 00:52:31,419 Speaker 2: of a common market. 968 00:52:32,040 --> 00:52:33,129 Speaker 2: And, um, 969 00:52:34,649 --> 00:52:36,709 Speaker 2: you know, having lived in the US now for more 970 00:52:36,719 --> 00:52:40,669 Speaker 2: than a, almost 30 years now, actually, no, more than 30. 971 00:52:40,790 --> 00:52:43,709 Speaker 2: Um Yeah. Yeah. No, it's been more than 30. Um 972 00:52:45,889 --> 00:52:48,779 Speaker 2: everywhere you go in the US, you have a familiar 973 00:52:48,790 --> 00:52:50,840 Speaker 2: feel in the cities you go and you could say, well, 974 00:52:50,850 --> 00:52:52,919 Speaker 2: you know, it's always the same chain stores and stuff 975 00:52:52,929 --> 00:52:55,908 Speaker 2: and all this. Ok, fine. I I grant that II 976 00:52:55,919 --> 00:52:58,449 Speaker 2: I would love to be a little bit less for that, 977 00:52:58,459 --> 00:53:02,350 Speaker 2: but the economy is always functioning in the same principles, 978 00:53:02,360 --> 00:53:04,669 Speaker 2: you know what you get also as an investor. Yes, 979 00:53:04,679 --> 00:53:07,709 Speaker 2: there's difference between state regulations here or there. 980 00:53:08,800 --> 00:53:11,979 Speaker 2: You know, companies wanna wanna settle in Delaware still. But 981 00:53:12,439 --> 00:53:16,219 Speaker 2: uh it's, it feels like a common market although people 982 00:53:16,229 --> 00:53:22,319 Speaker 2: sometimes have um different dialects in Europe. Um it still doesn't, 983 00:53:22,330 --> 00:53:24,709 Speaker 2: if you go there, there's a lot that has been achieved. 984 00:53:24,719 --> 00:53:28,799 Speaker 2: No question. And uh it's been visionary in the last, 985 00:53:28,810 --> 00:53:31,219 Speaker 2: you know, 50 60 70 80 years, 986 00:53:32,010 --> 00:53:34,830 Speaker 2: but it's not there yet. And I'm, I wonder whether 987 00:53:34,840 --> 00:53:36,629 Speaker 2: it will ever get there or whether it's going to 988 00:53:36,639 --> 00:53:37,300 Speaker 2: be eaten 989 00:53:38,050 --> 00:53:41,149 Speaker 2: uh alive by Russia and China and the US who 990 00:53:41,159 --> 00:53:44,449 Speaker 2: all have their interests. I mean, just today, there was 991 00:53:44,459 --> 00:53:48,270 Speaker 2: a big article in the German newspaper about how the, 992 00:53:48,280 --> 00:53:52,909 Speaker 2: the A FD that, that Russia, the Russia file party, 993 00:53:53,729 --> 00:53:58,110 Speaker 2: autocratic file party in Germany has been influenced by the 994 00:53:58,120 --> 00:54:01,129 Speaker 2: Kremlin and by Chinese state security. 995 00:54:02,030 --> 00:54:04,909 Speaker 2: And you know, these guys are supposed to get a 996 00:54:04,919 --> 00:54:08,489 Speaker 2: big share of the next parliamentary elections. So Europe is 997 00:54:08,500 --> 00:54:09,290 Speaker 2: not only 998 00:54:10,360 --> 00:54:14,459 Speaker 2: kind of still stuck in its partial sovereignty, it's also 999 00:54:14,469 --> 00:54:17,479 Speaker 2: subject to all these foreign interests coming in because they 1000 00:54:17,489 --> 00:54:20,770 Speaker 2: are not kind of grappling with how to respond in 1001 00:54:20,780 --> 00:54:24,570 Speaker 2: a determined way. I mean, just imagine the Russians use 1002 00:54:24,580 --> 00:54:27,139 Speaker 2: an outfit for the voice of Europe to get their 1003 00:54:27,149 --> 00:54:29,060 Speaker 2: propaganda into, into Europe. 1004 00:54:30,179 --> 00:54:35,069 Speaker 2: And the, the, the US and Europe have nothing comparable. 1005 00:54:35,080 --> 00:54:37,199 Speaker 2: There used to be a voice of America that got 1006 00:54:38,010 --> 00:54:40,929 Speaker 2: the voice across and help people kind of see through 1007 00:54:40,939 --> 00:54:43,409 Speaker 2: communism in the old days. Right now, the shoe is 1008 00:54:43,419 --> 00:54:46,300 Speaker 2: on the other foot, but it's the influence against democracy 1009 00:54:46,310 --> 00:54:48,069 Speaker 2: that's kind of gaining 1010 00:54:48,770 --> 00:54:52,530 Speaker 2: and there's still no response to that. Um So 1011 00:54:53,340 --> 00:54:56,678 Speaker 2: I don't see how, how Europe gets to this point 1012 00:54:56,689 --> 00:55:00,259 Speaker 2: where they agree to be um a strong economy that 1013 00:55:00,270 --> 00:55:02,790 Speaker 2: can really compete with China and the US. 1014 00:55:03,469 --> 00:55:05,638 Speaker 2: And so as long as that's not happening, they're gonna 1015 00:55:05,649 --> 00:55:06,870 Speaker 2: at some point be 1016 00:55:07,750 --> 00:55:12,350 Speaker 2: either demographically outflanked or simply become less and less meaningful 1017 00:55:12,360 --> 00:55:14,520 Speaker 2: and then trade will shift away from them because they 1018 00:55:14,530 --> 00:55:16,360 Speaker 2: don't have as much to offer anymore 1019 00:55:17,120 --> 00:55:18,899 Speaker 2: to, to the rest of the world as they, 1020 00:55:19,929 --> 00:55:23,530 Speaker 1: right. Um Europe lacks a European mindset. I'm going to 1021 00:55:23,540 --> 00:55:28,459 Speaker 1: use that code Martin, that was very good. Um It 1022 00:55:28,469 --> 00:55:30,679 Speaker 1: evokes I think, you know, exactly what it needs to 1023 00:55:30,689 --> 00:55:33,929 Speaker 1: sort of underscore. Um Finally, Martin, I mean, you and 1024 00:55:33,939 --> 00:55:36,899 Speaker 1: I are both ex IMF staff, we would like to 1025 00:55:36,909 --> 00:55:41,649 Speaker 1: see this institution, you know, maintain its relevance and leverage. 1026 00:55:41,830 --> 00:55:43,219 Speaker 1: Uh But, you know, 1027 00:55:43,594 --> 00:55:46,195 Speaker 1: having these conversations with you and, and hearing sort of, 1028 00:55:46,205 --> 00:55:48,834 Speaker 1: you know, lack of progress in these important issues like 1029 00:55:48,985 --> 00:55:53,514 Speaker 1: quota uh and, and not much you know, progress in 1030 00:55:53,524 --> 00:55:58,254 Speaker 1: the common framework either. Uh Do you worry that independent of, 1031 00:55:58,264 --> 00:56:01,495 Speaker 1: you know, who's president today or next year that the 1032 00:56:01,504 --> 00:56:04,074 Speaker 1: relevance and leverage of this institution has sort of eroded? 1033 00:56:04,084 --> 00:56:06,534 Speaker 1: And what would you like to see for that to 1034 00:56:06,544 --> 00:56:07,215 Speaker 1: be restored? 1035 00:56:09,699 --> 00:56:12,510 Speaker 2: Uh Well, uh for the last one, it takes all 1036 00:56:12,540 --> 00:56:15,239 Speaker 2: members that are determined to um 1037 00:56:16,379 --> 00:56:20,070 Speaker 2: shape the institutions and the way um that they were 1038 00:56:20,080 --> 00:56:21,320 Speaker 2: supposed to, to be. 1039 00:56:22,070 --> 00:56:22,580 Speaker 2: Um 1040 00:56:23,629 --> 00:56:26,530 Speaker 2: that is not the case right now because um 1041 00:56:27,790 --> 00:56:28,570 Speaker 2: um 1042 00:56:30,729 --> 00:56:33,090 Speaker 2: I think the the the key issue here is that 1043 00:56:33,469 --> 00:56:35,659 Speaker 2: um there's a lot of um 1044 00:56:36,340 --> 00:56:39,439 Speaker 2: stuff going on elsewhere like in the climate discussions, right? 1045 00:56:39,969 --> 00:56:40,469 Speaker 2: The 1046 00:56:41,219 --> 00:56:46,759 Speaker 2: the the the the the industrialized countries are um being blamed, 1047 00:56:47,389 --> 00:56:49,729 Speaker 2: you know, rightly, in many respects for 1048 00:56:50,790 --> 00:56:54,370 Speaker 2: um getting the global climate to where it is right now. 1049 00:56:54,729 --> 00:56:55,969 Speaker 2: Um this is 1050 00:56:57,129 --> 00:57:00,189 Speaker 2: can be measured where the, the co two emissions came 1051 00:57:00,199 --> 00:57:00,469 Speaker 2: from 1052 00:57:01,260 --> 00:57:05,580 Speaker 2: and the global South wants compensation, wants help in meeting 1053 00:57:05,590 --> 00:57:06,949 Speaker 2: the challenges and 1054 00:57:07,639 --> 00:57:08,699 Speaker 2: uh they want money 1055 00:57:09,429 --> 00:57:11,850 Speaker 2: now, is this money all going to be used for 1056 00:57:11,860 --> 00:57:15,760 Speaker 2: climate projects and raising, you know, dams everywhere where there's 1057 00:57:15,770 --> 00:57:16,729 Speaker 2: a flood or 1058 00:57:17,449 --> 00:57:20,629 Speaker 2: I'm not sure. But the point is um there's this 1059 00:57:20,639 --> 00:57:23,870 Speaker 2: huge debate about um helping 1060 00:57:25,510 --> 00:57:29,780 Speaker 2: developing countries that have not contributed to the climate crisis 1061 00:57:29,790 --> 00:57:30,669 Speaker 2: in adapting 1062 00:57:31,649 --> 00:57:32,310 Speaker 2: preparing. 1063 00:57:33,020 --> 00:57:36,959 Speaker 2: So that's that and there's also the pressures on um 1064 00:57:36,969 --> 00:57:41,030 Speaker 2: governments to finance their own climate transition. Talk about electrification 1065 00:57:41,040 --> 00:57:42,159 Speaker 2: of the grid and all this. 1066 00:57:43,030 --> 00:57:43,629 Speaker 2: Um 1067 00:57:44,520 --> 00:57:50,020 Speaker 2: there is the need to um uh influence the politics 1068 00:57:50,030 --> 00:57:55,020 Speaker 2: of partners in developing countries that are geopolitically important 1069 00:57:56,060 --> 00:57:58,199 Speaker 2: and more and more and more of these kind of 1070 00:57:58,209 --> 00:58:02,870 Speaker 2: tasks that fall on advanced economies and they don't have 1071 00:58:02,879 --> 00:58:03,560 Speaker 2: the money for it. 1072 00:58:04,510 --> 00:58:07,250 Speaker 2: Yeah, because the budgets are, as we discussed, you know, 1073 00:58:07,260 --> 00:58:09,409 Speaker 2: they are already pretty stretched and a lot of that 1074 00:58:09,419 --> 00:58:11,729 Speaker 2: has to do with aging and social 1075 00:58:12,590 --> 00:58:17,090 Speaker 2: um uh transfers that relate to health and pension spending. 1076 00:58:17,929 --> 00:58:21,899 Speaker 2: So, where's money? Where's money left? Well, look at it, 1077 00:58:22,669 --> 00:58:26,639 Speaker 2: the IMF has a trillion lending capacity, a trillion dollars. 1078 00:58:27,479 --> 00:58:30,260 Speaker 2: Um The World Bank needs more and well, with the 1079 00:58:30,270 --> 00:58:33,659 Speaker 2: World Bank, we need to leverage um private money, right? 1080 00:58:33,810 --> 00:58:37,370 Speaker 2: So the the World Bank lends and then private sector 1081 00:58:37,379 --> 00:58:41,600 Speaker 2: comes in and fills the rest. So I don't think 1082 00:58:41,610 --> 00:58:45,280 Speaker 2: that leveraging is going so well, quite frankly. Um it's 1083 00:58:45,290 --> 00:58:48,000 Speaker 2: uh it's not from billions to trillions, it's from billions 1084 00:58:48,010 --> 00:58:49,679 Speaker 2: to a few more billions at best. 1085 00:58:50,729 --> 00:58:54,379 Speaker 2: Um but the IMF still has a trillion and for 1086 00:58:54,389 --> 00:58:57,979 Speaker 2: someone who comes from the developing work and to get 1087 00:58:57,989 --> 00:59:01,239 Speaker 2: into the, to the IMF to lead it, it's almost like, 1088 00:59:01,250 --> 00:59:02,919 Speaker 2: you know, a kid in a candy store all of 1089 00:59:02,929 --> 00:59:06,899 Speaker 2: a sudden we have all that money and um people 1090 00:59:06,909 --> 00:59:09,100 Speaker 2: are frustrated that they can't use it to the, to 1091 00:59:09,110 --> 00:59:10,750 Speaker 2: the fullest. So 1092 00:59:11,510 --> 00:59:12,070 Speaker 2: um 1093 00:59:12,949 --> 00:59:15,070 Speaker 2: the, the thing that's been going on for the last 1094 00:59:15,080 --> 00:59:18,189 Speaker 2: five years has been a steady expansion of trying to 1095 00:59:18,199 --> 00:59:21,090 Speaker 2: get more finance to developing countries from the IMF 1096 00:59:21,790 --> 00:59:24,929 Speaker 2: what's not so much kind of evolved in line with 1097 00:59:24,939 --> 00:59:25,729 Speaker 2: it has been 1098 00:59:26,449 --> 00:59:27,110 Speaker 2: um 1099 00:59:27,889 --> 00:59:31,489 Speaker 2: the conditionality and the debt restructuring that's needed to make 1100 00:59:31,500 --> 00:59:32,629 Speaker 2: these programs work. 1101 00:59:33,659 --> 00:59:36,179 Speaker 2: And that's where the biggest risk is for the institution 1102 00:59:36,189 --> 00:59:39,000 Speaker 2: in my view. Um You don't even have to talk 1103 00:59:39,010 --> 00:59:41,919 Speaker 2: about Argentina, which is, you know, are they ever going 1104 00:59:41,929 --> 00:59:43,780 Speaker 2: to get out of that 40 billion hole? We'll have 1105 00:59:43,790 --> 00:59:46,939 Speaker 2: to see. But um other countries also get a lot 1106 00:59:46,949 --> 00:59:49,699 Speaker 2: of money and, and the problem is also that developing 1107 00:59:49,709 --> 00:59:54,520 Speaker 2: countries get most of their money these days from multilateral institutions. 1108 00:59:54,850 --> 00:59:56,879 Speaker 2: So they keep on lending, which is good. 1109 00:59:58,199 --> 01:00:01,699 Speaker 2: They may not get so much in terms of reforms always, 1110 01:00:01,709 --> 01:00:04,610 Speaker 2: which is not good. And you know, the way things 1111 01:00:04,620 --> 01:00:08,300 Speaker 2: are going in five years, 10 years, there's a risk 1112 01:00:08,310 --> 01:00:11,520 Speaker 2: that countries can't repay their money to the multilateral institutions 1113 01:00:11,530 --> 01:00:12,580 Speaker 2: if things go badly 1114 01:00:13,540 --> 01:00:16,159 Speaker 2: and then there's going to be again, calls for um 1115 01:00:16,169 --> 01:00:20,290 Speaker 2: multilateral debt forgiveness and you know, another jubilee campaign and 1116 01:00:20,300 --> 01:00:23,919 Speaker 2: this and that and I have sympathy for that, but 1117 01:00:23,929 --> 01:00:26,129 Speaker 2: it should not have happened or it should not happen 1118 01:00:26,139 --> 01:00:29,770 Speaker 2: that way if, if countries want to transfer money to 1119 01:00:29,780 --> 01:00:32,320 Speaker 2: the developing country, well, it has to be grants, 1120 01:00:33,080 --> 01:00:36,419 Speaker 2: some countries do it, but there's just not more money around. 1121 01:00:36,429 --> 01:00:40,139 Speaker 2: So they're using the institutions right now as a substitute 1122 01:00:40,479 --> 01:00:41,979 Speaker 2: and it's going to blow up in the face of 1123 01:00:41,989 --> 01:00:45,939 Speaker 2: these institutions. And it's never been good, you know, to 1124 01:00:45,949 --> 01:00:47,540 Speaker 2: see that happen the last time 1125 01:00:48,290 --> 01:00:53,110 Speaker 2: um the IMF went through a huge restructuring in the 2006. 1126 01:00:53,739 --> 01:00:56,709 Speaker 2: Um lots of people left, it was written off and 1127 01:00:56,719 --> 01:00:59,479 Speaker 2: then the global financial crisis came and all of a sudden, 1128 01:00:59,489 --> 01:01:02,750 Speaker 2: it didn't even have the wherewithal to address all these 1129 01:01:02,760 --> 01:01:04,159 Speaker 2: issues overnight. 1130 01:01:04,790 --> 01:01:08,110 Speaker 2: So it would hurt to see the institutions go down 1131 01:01:08,120 --> 01:01:12,110 Speaker 2: that way again. And for that, we need responsible kind 1132 01:01:12,120 --> 01:01:16,199 Speaker 2: of leadership, the the the IMF and World Bank, I 1133 01:01:16,209 --> 01:01:17,770 Speaker 2: think need to be integrated 1134 01:01:18,679 --> 01:01:21,620 Speaker 2: better in a way how uh 1135 01:01:22,919 --> 01:01:25,620 Speaker 2: advanced economies help 1136 01:01:26,909 --> 01:01:30,810 Speaker 2: uh developing countries, there needs to be more than just 1137 01:01:30,820 --> 01:01:32,570 Speaker 2: monetary incentives. Um 1138 01:01:33,239 --> 01:01:33,439 Speaker 2: I 1139 01:01:34,600 --> 01:01:36,679 Speaker 2: the Atlantic Council that kind of goes into that a 1140 01:01:36,689 --> 01:01:39,479 Speaker 2: little bit. I think countries need to be convinced to 1141 01:01:39,489 --> 01:01:43,040 Speaker 2: do the reforms, right? And the populations need to see 1142 01:01:43,050 --> 01:01:46,060 Speaker 2: that it's not just the West also showing up with 1143 01:01:46,070 --> 01:01:48,949 Speaker 2: money like the Chinese do. Um There needs to be 1144 01:01:48,959 --> 01:01:52,030 Speaker 2: a real attempt at reform which can be difficult, but 1145 01:01:52,040 --> 01:01:55,270 Speaker 2: I think there's more incentives that the West can offer 1146 01:01:55,280 --> 01:01:57,139 Speaker 2: than just money to help countries do it. 1147 01:01:57,840 --> 01:02:00,419 Speaker 2: And if it's done in a smart way, the institutions 1148 01:02:00,429 --> 01:02:03,439 Speaker 2: could be really helpful. So I think that the West 1149 01:02:03,449 --> 01:02:06,219 Speaker 2: needs to make sure the institutions function, they need to 1150 01:02:06,229 --> 01:02:11,060 Speaker 2: be doing their jobs, right? Um They should be careful 1151 01:02:11,070 --> 01:02:14,020 Speaker 2: to dilute control at the moment. I don't believe the 1152 01:02:14,030 --> 01:02:16,689 Speaker 2: interests of China in getting more votes at the IMF 1153 01:02:16,699 --> 01:02:17,580 Speaker 2: are so benign. 1154 01:02:18,429 --> 01:02:21,850 Speaker 2: So there needs to be some kind of broader concept 1155 01:02:21,860 --> 01:02:24,310 Speaker 2: of how to use the institutions and you have, you 1156 01:02:24,320 --> 01:02:25,770 Speaker 2: need to have the leadership to do it 1157 01:02:26,379 --> 01:02:31,199 Speaker 2: um to really make them useful from a geopolitical perspective. Otherwise, 1158 01:02:31,209 --> 01:02:33,770 Speaker 2: you know, we have a multilateral institution that's just been 1159 01:02:33,780 --> 01:02:34,840 Speaker 2: used as a piggy bank 1160 01:02:35,560 --> 01:02:37,939 Speaker 2: and eventually it will have to be refinanced and that's 1161 01:02:37,949 --> 01:02:38,699 Speaker 2: going to be awkward. 1162 01:02:39,340 --> 01:02:41,989 Speaker 2: Um So let's be careful how to, how to use them, 1163 01:02:42,000 --> 01:02:42,800 Speaker 2: let's use them. Right. 1164 01:02:43,949 --> 01:02:47,639 Speaker 1: Right. I think the warning is very well taken. Martin. 1165 01:02:47,649 --> 01:02:51,330 Speaker 1: I I share your uh concerns. Uh We've done quite 1166 01:02:51,340 --> 01:02:53,850 Speaker 1: the trip of the world. Mart. I say, you know, 1167 01:02:53,860 --> 01:02:55,770 Speaker 1: thank you very much for your time and insights. 1168 01:02:56,800 --> 01:03:00,320 Speaker 2: Thanks for having me time. So whenever we meet again, 1169 01:03:00,330 --> 01:03:02,120 Speaker 2: if we meet again, we say the last one we 1170 01:03:02,129 --> 01:03:03,600 Speaker 2: did in our 100 twenties. 1171 01:03:04,629 --> 01:03:06,459 Speaker 1: Yes, but we're not going to wait till 100 and 1172 01:03:06,469 --> 01:03:08,780 Speaker 1: 80 for the next month. We'll do it much before that. 1173 01:03:09,459 --> 01:03:09,780 Speaker 1: Uh 1174 01:03:09,919 --> 01:03:10,699 Speaker 2: Thank you for having 1175 01:03:10,780 --> 01:03:13,179 Speaker 1: me. Great to have you Martin and thanks to our 1176 01:03:13,189 --> 01:03:16,030 Speaker 1: listeners as well. Copy Time was produced by Ken Delbridge 1177 01:03:16,040 --> 01:03:20,000 Speaker 1: at Spy studios, Violet Le and Daisy. She provided additional assistance. 1178 01:03:20,080 --> 01:03:22,510 Speaker 1: It is for information only and does not represent any 1179 01:03:22,520 --> 01:03:24,239 Speaker 1: trade recommendations or what 1180 01:03:24,364 --> 01:03:28,114 Speaker 1: 122 episodes of copy time are available on youtube and 1181 01:03:28,125 --> 01:03:31,925 Speaker 1: on all major podcast platforms including Apple Google and Spotify. 1182 01:03:32,205 --> 01:03:34,945 Speaker 1: As for our research publications, webinars and live streams, you 1183 01:03:34,955 --> 01:03:38,554 Speaker 1: can find them all by Googling devious research library. Have 1184 01:03:38,564 --> 01:03:39,294 Speaker 1: a great day.