 Welcome, everybody. Good morning, good afternoon, good evening, wherever you are in your world. I think we've got a great session today on redesigning trade and employment. It's really extensive subject that touches everything. Trade drives so much in employment that we're going to be hard pressed to get a lot done in the 30 minutes, but then we will have some follow up Q&A, which is great. And I look forward to it and hearing from you all. My name is Toby Switzer. I'm the Chief Human Capital Officer at Agility, a global logistics company. And one other thing is I'd like to mention that I've been a participant in the WEF Chief Human Resource Officer Forum that we've had that since the start of the pandemic, we've been discussing the people issues associated with the pandemic. So it's been very good to be a part of this group. Now on to our session. And our session really aims to examine the different ways of how COVID has affected the international trade and consequently, employment and the working conditions around the world. Early on demand and supply side shocks really led to trade falling significantly, especially starting in May. And it affected employment in the different countries through the global supply chain. Travel restrictions really hit the services sectors like tourism and the people that work in these sectors. Also, some companies are really looking at restructuring their supply chains, either to improve resilience because of the disruptions they experienced, and also to deal with the growing economic nationalism that we fear might be happening. But at the same time, on the good side, digital trade, e-commerce and remote working have accelerated and are providing new opportunities. So with that, we'll be discussing how to improve employment outcomes in this new context and the important role that trade policy plays here. I'm really pleased to be chairing this session and introduce our distinguished panelists. We have Beata Chvorshchuk, the chief economist at the European Bank for Reconstruction and Development. We have Richard Baldwin, professor of international economics at the Graduate Institute of International and Development Studies. And we have Martin Umaran, chief operating officer at Globalin. So before we start, I just wanted to remind people that if you're joining via top link that you can post your questions on to the panelists in the Zoom chat box. And we'll get to them shortly. We'll see how many we get, but I look forward to hearing a lot of them. Now, I guess we can get started. So Beata, if you don't mind, I'll start with you. And we'll talk about how is COVID-19 affecting employment through its disruption of trade and investment. And what do you expect to see going forward? Thank you, Tommy. It's a pleasure to be joining this conversation. Let me start with some figures. The effects of the pandemic are already clearly visible in the data. Last August, the EBRD has run a survey in 14 countries, a survey of 40,000 individuals. And we have asked people, have you lost employment as a result of COVID? And about a fifth of people in Egypt and Turkey reported that. About a tenth in Greece, Hungary and Poland. Our respondents have also told us about the need to close family business as a result of COVID. And the need to reduce consumption of not only luxury goods, but also staples. And what is very visible in the data is that these negative effects are much larger in emerging markets than in advanced economies. And that's partially related to the size of the fiscal packages that advanced economies were able to put together. Also, what's visible in the data is that these effects on employment, on closure of businesses are much larger than what was experienced in the countries where we are active during the global financial crisis. Our data also confirms what everybody has been talking about. That in terms of employment, it was young people, people with less education, people who are in less, people employed in SMEs and in private sector, as opposed to the public sector, who are more likely to lose employment. Now, going forward, in the next 12 months, things are not looking too rosy because we are not out of the woods yet. In Europe, we have a second wave of the pandemic and trade which rebounded in the last quarter is likely to remain subdued as is tourism, remittances and commodity prices. Also, I am concerned about lower FDI flows globally. ANKTED is predicting 40% decline in global FDI flows this year and they are expecting that FDI will remain at that level for next two years and this is a level below what we saw after the global financial crisis. But there are some positive development and one of the positive things going a few years ahead, so thinking more medium term in a few years, one is rethinking of global value chains. I think there will be a move towards great, towards diminishing dependence on China, towards building in resilience and as firms pick up investment, I think they will try to, when they assess locations where they are trying to source from, where they are trying to locate their new facilities, they will try to quantify the benefits or resilience. And in some cases, this is going to sway the decision towards emerging markets that have not been at the top of foreign investors list. So this is an opportunity for emerging markets to grab a larger share of global exports. The second positive development is remote work. We have all been thrown into this giant experiment of working from home. Going forward, all indications suggest that many firms will continue with remote work or with some form of hybrid working arrangement. And that creates opportunities for skilled workers who are much cheaper when they are located in emerging markets to be employed by firms in London or Paris or Berlin. Of course, there are some limitations. They are related to time zones. They are related to data protection regimes and ability to travel. But the exports, I would expect to see increased exports of services. And that's another positive development. So thank you and back to you, Tony. Thank you, Beata. That was really good. I probably myself have several questions from that. But we'll give Richard a chance now to talk. Richard, we've been hearing a lot about reshoring and nearshoring. Beata actually mentioned some of this production. How likely is this and how will it affect employment in developed and developing countries? You're on mute. There we go. So the way I'd like to frame this is I'm very willing to believe and easy to see how reshoring will happen in medical supplies. There is a national priority to increase the resilience of medical supplies and heightened awareness of over dependence on certain countries for some types of medical supplies. Although I think when we're done with the crisis, trade will be one of the heroes of COVID story. Just for example, the massive increase in personal protection equipment that's come from developing countries into places like the United States and Europe. Without that huge trade response, the crisis would have been much more difficult, especially for the medical personnel. But in any case, there's no doubt that people are going to start to think about medical supplies more like they think about food security. So in almost every country in the world, throughout almost every time period, governments have worried about food security and trade has been part of that. So systematically, we have a very expensive, very intrusive policies aimed at ensuring that people have enough to eat pretty much no matter what happens with the trade. And to a certain extent, there's been a realization that there should have been more of that kind of thinking in medical issues or medical supplies. So I'm quite willing to believe that governments will spend the money necessary and pass the regulations necessary to reshor or at least near shore some of that medical supply or put up networks of allies and work on stockpiles and things like that. What I find a little harder to believe is that that'll go to, and by the way, trade and medical supplies is about less than 10% of world trade. So most of the global value chain machinery is not really touched by this kind of thing. And I think that those companies are fully aware of shocks, whether it's tsunamis or floods or strikes or other forms of natural disasters that shut down, they're fully aware and they're balancing like a portfolio the risk versus the reward of placing it in the cheapest countries. So unless governments do something incredibly strong in regulation like they do in financial regulation, or they do something incredibly expensive like they do in agriculture, those companies are not really going to change things so much. With the perhaps proviso, again, picking up on what Piatta said, is that maybe quite a few countries are realizing that relying only on China or only India is not such a great idea. So I think this strategy which you'd heard before was China plus one, for example, that could go further on. But I don't think of that as a massive reshoring. And in fact, a lot of the alternative places, as Piatta said, are going to be other emerging markets, not necessarily any closer to home. So that's how I think about it. If I could just say one more thing, and that's about what Piatta said about the digital services, which I totally agree with. In fact, I wrote a book about it last year, and I called it telemigration. So I think COVID has accelerated this. And I wrote a paper last year on telemigration and emerging markets. And I do think that this is creating a new development journey for many emerging markets, opening up opportunities for lots of countries who've been left out of the global value chain revolution and the commodity supercycle. In essence, working from home when home is abroad is going to become a big thing in the coming years. And so I think that will change lots of things. And in some sense, what's happening is the service sector is seeing its value chains disintegrate, just like happened in manufacturing and certain parts of the service value added chain can be moved abroad. One of the interesting things about that, if I have one minute to say, is that much of the restrictive regulation and services is based on the final delivery between the company and the consumer. But the whole value chain behind that is basically unregulated, because until recently, it was assumed to be all done by the same company in the same building. So the digitalization of that, this integration of the value chain has sort of opened up lots of possibilities that aren't really right now subject to too much regulation. So the door is open. I think I hope I didn't go on too long. But very good. And I see, I see what the two of you, well, you also gave a good lead in, I think, to Martin's area. But I see this lessening the concentration of or the risk of your production or where you're sourcing from is going to be a big factor. And hopefully provides opportunities out there. But since Richard talked about the digital services, that great lead into you, Martin. So if you want to, the question I have for you is how are technological innovations and new business models enabling shifts in services trade? All right. Mute, Martin. Martin, you're on mute. There we go. Nope. Still on mute, Martin. Martin, you're mute. Hello. Sorry, but give me a second. I have a problem. I need to, I need to stop. Sorry. Sorry. Give me a second. Sorry. Okay. We saw Martin in the car. So maybe he's getting a ticket. I don't know. If I may react to what Richard said. So I fully agree with Richard that companies have been aware of shocks and flooding in Thailand and earthquakes in Japan. But I think this time is different. And this time is different because we also have uncertainty about trade policy. The WTO has been weakened. Europe is very committed to low carbon transition. And this will have to mean carbon taxes collected at the border. And that creates a lot of uncertainty. And climate change is going to bring extreme weather events. So all of these forces are changing the equation. Shocks, there are more shocks coming our way. And that's become very clear. And then, you know, there is automation which lowers the importance of labor costs. So I agree with Richard. We will not see massive reshorang, but I think there will be near shorang. Well, it is. And that kind of leads when we talk about some of the protectionism that might be coming into effect. I know one of the things that Richard talked about, or one of you said, that the PPE and the medical services, we were heavily involved as one of the logistics company in moving goods around the world. That helped us as an industry, but also we were able to provide those services out there that really made a difference. So I think you're right on the countries are going to be looking more and more to the near shoring, having it available, so they don't have to be dependent. But you also throw in the environmental cost that's going to be playing in this. Richard, you look like you had, you wanted to say something more on that. Sure. So let me just spin out what Beate said, but Beate has a great essay on this reshorang thing in voxyu.org, which is a website that I run. So if you want to see her early predictions on this, it's all there. But what I want to spin out is a little thing that she mentioned en passant was about the automation. And that's where I'm very, very much in agreement with her. So in essence, we offshore to save labor costs. That's approximately it, because the materials don't cost much difference. The differences in cost of materials aren't much different across countries, except in a few things like natural resources. And the equipment's the same. The technology, at least in the big players, is relatively the same. So the real reason that companies are producing in China or is mostly for labor costs. Now, as automation reduces the labor cost share in the product's cost, it becomes less worthwhile to offshore. And at some point, when the labor cost share gets small enough, you'll make it in Germany, even though you're paying Germans 10 times as much as you would pay Vietnamese, because it's just not worth paying the delay and the shipping costs when the labor cost gets down. So there is a very strong technological trend to local production. And whether it's near shoring or whatever. But clearly the idea that you put factories in far away countries with low wages, that's based on the fact that wages are important costs. And automation is lowering that. So ultimately, factories will be jobless. And therefore, all the production will be local. And so it's not just reshoring, it's going to extinguish trade to a certain extent, because things will be made locally by robots all over the world. I think that'll be another topic is employment. What does that mean for employment? And so in the developing countries as well as the developed, Martin, are you back now? You're on mute though. Now, can you hear me? Got it. Got it. So I'm sorry. I'm sorry. Was a very difficult day today. And I didn't want to miss this. But I'm back. I was hearing what my colleague said about automation and all this stuff. I agree with him and I agree with my two colleagues about what's happening in the services, especially in the professional services, more than because service industry is quite big. But talking about the type of services that can be what we usually call the professional services. I think that this pandemic has accelerated the path to digitalization in people said about that it's in moms happen what should happen in years. I was talking about 25 times faster. I think this is amazing. And one of the most amazing things that we are not using, you are not using anything new. At some point, the technology that we're using to communicate was in the market because it was impossible to make it happen in just days. Some industries like my company, we went totally from our office to work from home in two days. So that's impossible. The logistic of that. It's impossible. You don't have all the infrastructure in place before that. The only thing that was like we weren't using that technology. The way we're using right now. So I think that the impact. The major impact is that we are proving that we can do that in a different way. And this is what Beata and Jacob was saying. It's like now there is no doubt that you can deliver. We're going to see in some months or years or in the very next year, we can measure if we are as effective as we used to be during working from home and working from office. It's a metric that is still there. We don't we don't know yet. But what's true is that today we are delivering and we're working very well from home. So I think it's a big change and the way that we're going to deliver our services or at least leaders have to think about how to deliver that services is going to change because this is a natural proof. It's a test that things can be done in a different way. No, very, very, very profound on that because we experienced the same thing. We were ready for it and we have the technology and then we just applied it. So it really worked well for us as you described. Thank you, Martin. Let's go to a second round of questions before our time runs out here. But again, we'll start with you, Beata. Because I think this is important. To get the government or other organizations, what kinds of supports to firms and workers should governments and development banks be focusing on in their response and the recovery phases? Well, thank you, Toby. As Martin said, we've had the technology, but not everybody had access to it. So in order to reap the benefits of exports of services through remote work, people need access to broadband infrastructure, reliable connection. And that's something that governments and international institutions can provide. And there's a lot of variation in digitalization across countries. So for instance, prior to the pandemic, three quarters of people in the UK, about 15 years of age, purchased something online. In Poland, it was 50%. In countries such as Mongolia, Armenia, Tajikistan, the number was in single digits. However, as in another survey that we did at the EBRD, we've seen that even in those countries where e-commerce was not wildly spread, more than half of SMEs has moved some of their sales online. So the trends are indeed accelerating even in places which we're lagging behind. In emerging markets, there is lack of trust. So often, you do not want to make a payment online because you think you will never see the goods. But that's solved in a different way. You make a purchase online and you pay to the courier upon delivery. And I think that the pandemic is an opportunity for many businesses to develop a reputation, to establish themselves as a reputable business. Now that brings me to another area where the governments can be active when it comes or multilateral development banks can be active when it comes to promoting trade, trade finance. Crises create uncertainty. And during crisis, exporters are worried about sending their goods and being paid for them. Importers are worried that if they repay for goods, they will never see the shipment. And so we need trade finance instruments that allow the trading parties to ensure shipments. And you know, during the global financial crisis, when we experienced this big trade collapse, about 10% of that trade collapse could be attributed to the inability to insure shipments. Things are different now because over the past decade, many corresponding banking relationships between banks from advanced countries and banks in emerging markets have been cut. According to the WTO and IFC, about 20% of these relationships have disappeared. At the EBRD, we did a survey of banks and we asked them, have you recently cut such relationships with an emerging bank market bank? And about 60% of banks said yes. And their explanation was that the cost of due diligence are not large enough to cover the costs of due diligence are too large relative to the benefits of business they get. And in particular, they were mentioning anti-money laundering legislation. I can imagine that. And that's the turns to this. But we can talk about that more in the Q&A, I hope. Just that we're getting into our final minutes. Richard, you have a couple thoughts. One of the things I was going to ask you again is more on what governments can do to help employees and workers shift here. To me, that's one of the toughest issues here as we go to digitalization. Right. So let me continue with the theme of the service and professional sector. And what I'd like to point out is that these changes are nothing new. People are having to change jobs. Jobs would be changed, but there is absolutely nothing new about that. So really, the government policy we need is exactly the policies that the best countries are already doing, active labor market policies that help workers find new jobs, that help new firms create new services to demand them. And we just need more of it and faster. So that's what I think, really, it's worthwhile saying this is not a brand-new situation, but we will need more of it and we'll need it faster. So I'll just put it back. It's how rapid it's going now. Martin, any last things? I was going to ask you anything that you can suggest for policymakers to... Of course, I'm not a policymaker, but I think that there are three things that are very important. One is that all the investments that... We need to invest in basic infrastructure. Internet, we need that. Without that, there is no way to digitalize society if you don't have internet. So we need to invest on that. Second, we need to invest in education. All the changes that we are suggesting are impossible if we don't have an educated population. I'm not talking about the young people. I'm talking young, old, everyone. Today, one out of two old persons cannot use digital tools. So it's very important. We have to prepare our society for long lives. So we need to continue to educate them. And third, I think that with governments and politicians, we need to avoid the catastrophic view of the world. It's that thing that the computers and robots are taking all the jobs and no one's going to work in the future. That's not going to be true. That's never happened in the past. And now we have a great opportunity to tackle this transformation quite before it's happening. So I think that this is my view. Super. Without this going on, like I think several of you've said there for a while, I think it's just how fast we're now switching over because of the pandemic. And the governments and other organizations have to respond.