 Okay, welcome everybody. Thank you for joining us. I'm Sarah Eisen. I'm an anchor at CNBC and I'm thrilled to be here again at Davos, monitoring the session on global debt. Just want to introduce our very esteemed group of panelists. We have the Minister of the Economy for Brazil, Paulo Guedes, pronunciation. Perfect. Thank you. We have Daniela Franco, who is the also Minister for the Economy, but for Italy and finance, Minister of the Economy and Finance. We have Gita Gopinath, who is the first deputy managing director at the IMF. And we have Patrick Dillamont-Mini, who is the CEO of the Development Bank of Southern Africa. Thank you all for discussing. We have many of the regions of the world covered. We have a lot of hot topics to get through when it comes to debt. So I just want to dive right in and maybe start with you, Gita, because you have a good global outlook and the IMF does a ton of work on this stuff, like debt levels, which are high right now. So can you just give us a sense of what kind of issue we're looking at when it comes to rising debt levels and where we're going? Happy to you. And a real pleasure to join this panel. If you look at the debt numbers in terms of public debt for advanced economies, it's close to record of 120% of GDP. If you look at emerging and developing economies, it's not as high as it was in the 1990s, but it has gone up significantly, especially during the pandemic. A useful reference point is to remember what debt was at the start of the previous interest rate hiking cycle. So if you go back to 2013, you had emerging and developing economies debt. The median middle income emerging market debt in 2013 was around 40%. And now it is at 60%. And the median low income countries 2013 debt was at 25% and now it is at 50%. Now, so clearly debt levels are much higher at the start of this hiking cycle. But at the same time, I mean, there are differences. A lot of the emerging market debt now is also in local currency as opposed to foreign currency. And they have more foreign exchange reserves. Now for low income countries, we have about 60% that are assessed to be either already in debt distress or in high risk of debt distress. So what about for emerging markets? As of now, firstly, we as yet do not see a systemic sovereign debt crisis. But the risk of having much more debt distress in the future is certainly very salient. In terms of the countries among emerging markets that have been affected by high levels of debt and debt distress at this point, it's mostly the countries that were already in a difficult position before Argentina, Lebanon, and adding Sri Lanka in there. So I guess the bottom line I would say is that we have high levels of debt and importantly at a time when interest rates are going up in the major economies of the world. But you don't see a debt crisis. As of yet, we do not see what I would call a systemic debt crisis. But we could certainly see an intensification of debt distress. Brazil has a good story to tell, doesn't it? Well, you're a commodity exporter, so that's helped. Yeah, well, like Gita said, there's a problem. There's one dimension which is the external dimension. And indeed Brazil has $360 billion reserves and the external debt is much lower than that. So we're in a very solid position. We have a huge trade surplus. The trade balance at the moment, but with a surplus, for instance, I think Brazil is probably the only country with a trade surplus against China exactly because of agriculture, food and agricultural products. So we are in a very balanced, very comfortable situation when you talk about external debt. Then we go to the internal debt. What happened? When the disease came, when COVID came, our debt GDP ratio was 76 and a half. And then everybody, even the IMF, forecasted a collapse in the Brazilian economy. They estimated the drop in GDP of 9.7% for Brazil. And then let's say, as an example, UK 4%, happened exactly the contrary. I had, I had, I alerted the IMF mission. It was not to keep that herself. It was somebody else that was removed from the position. It's not there anymore. I remember, I remember telling them, listen, you are underestimating our ability to respond to the crisis. What happened? UK dropped at 9.7%. The number they assigned to us was UK. Italy more than 9%. France more than 7%. Germany 5.6%. Japan 4.5%. And Brazil 3.9%. So Brazil dropped at last, recovered faster. And at the end, the initial forecast is that our debt GDP ratio would go to 100% from 76.5% to 100%. Well, last month, we just closed the number, 78.5%. So we did better than all other countries on the fiscal front. The only country that did as good as we did on the fiscal internal, that dimension, is a city state, a Singapore. It is a city. So except for that, we have no problem. And we again surprise it on the positive side. So our debt from 76.5%, 78.5%. Some people say, well, it's because inflation went up and then you had extra revenue. Well, it happened many times in Brazil that inflation going up and the deficit going up because expenditures also go up when you have more inflation. Problem is exactly that the solution that we implemented is that for the very first time, we have frozen other expenditures. So we spend more on health, but less on all other accounts. So the final result is that we fought a war against the virus. We fully vaccinated 94%, 98% of adult population. The GDP is quite above the level of when the disease came. Last year, final, the end of last year when we were meeting and talking about perspectives for this year, I also said, you keep reviewing downwards. The growth forecast for the world, it's happening. They are reviewing downwards. It was five, now four, now it's three and a half. People are talking about 2% for the U.S. And they'll keep reviewing upwards for Brazil. They thought Brazil was stagnated. We have grown four and a half last year. This year we go above 2%. And the key idea is we made a lot of reforms. Instead of growing six, seven, 8% with a huge deficit, we removed all the stimulus, all the fiscal stimulus during the recovery. So we made a fiscal, contrastionary fiscal policy, a contrastionary monetary policy. The central bank is quite ahead of the curve. Wait, we're going to get there. No, but never waste a good crisis, right? Yeah, no, never waste. So Patrick, the debt levels in Sub-Saharan Africa have shot up during COVID. Where do they stand right now? Absolutely. Actually, the Sub-Saharan African region, even before the pandemic, the debt levels were already on the increase. And the pandemic just made it worse because governments had to respond to the pandemic. And by ensuring that the hospital systems and the health system in totality was attended to and was actually bolstered so that it could be able to cater and look after the sickly. And also you had lockdowns being declared across many countries. And government had also to make sure that they provide some level of cushion to the low-income communities to make sure that they're able actually to survive the lockdowns and making sure that there's some basic income access. But if you look at how now things are for the region, we've already seen maybe about six countries that have been downgraded by the rating agencies because of the rising debt levels. Also part of the G20 initiative, some countries within, even SADEC, are on this debt service suspension initiative that we're trying to manage because the debt levels actually have reached alarming levels. We're going to see defaults? We are very much worried that it might happen, provided there's some proactive management of government debts. But the other thing is private sector and non-finance corporations. We are also seeing their debts increasing, both households and firms, which also says we cannot afford to see a simultaneous delivery of both government and the private sector as that will impact on the economic growth. Already the trajectory by the IMF is that things are going to look quite bad. And issues already around the food prices and inflation within Sub-Saharan Africa, it has shot up from 11% to 12.2% projected in terms of inflation for the Sub-Saharan Africa. So it's very, very worrying because the monetary authorities are also tightening. So the hike cycle is going to bring about quite a lot of pain to the economy, which also is not going to help the global income inequalities. No, I definitely want to dive into food inflation and hikes, but also just sort of set this scene here, Minister Franco, for your debt problem. So Brazil is at what, 78% debt to GDP? Where is Italy? Italy is always a problem here. Last year it was 151, but let me recall that in 2020 the debt ratio increased by 21% of points up to 155. The point about that is that expansionary fiscal policies in Italy as well as in the other countries prevented a huge damage to the private economy and allowed our economy to survive the pandemic without halting. I agree with Gita that there is no systemic debt crisis. This applies, I think, to all European countries and to most developed and emerging countries. One consideration is that in 2021 that that ratio in many countries declined. I think in just seven countries declined by four points in Italy by four and a half points. All these countries are projecting a further decline in 2022. That is, we are on a downward trend. Another point is that by cushioning the private economy in 2020, we prevented the private sector, household, and companies to get very much indebted. If you look at the Italian figures, you will see that household debt between 2019 and 2021 increased by only two points, from 41 to 43%, while household deposit increased by seven points. Companies debt increased by five points, while companies liquidity increased by eight points, meaning that companies and households in Italy, but as well as in many other European countries, were protected by the downturn of 2020, which means that they can now face, for instance, the increase in interest rates from a more solid position that would have been without the expansionary fiscal policy we all implemented in 2020. Looking at the future, I think public debt is a powerful tool for economic policy. This we should keep that in mind. The problem with public debt is that it's powerful to face adverse circumstances, worse pandemics. The point is public debt management or fiscal policy management in good times. This is the time where public debt should be reduced, and this is the time when in many countries mistakes are made. Now, after the pandemic, we were all looking forward to a period of decline in debt ratio. The point is that we are facing after the pandemic, the surge in energy prices leading to a surge in inflation, accelerating monetary policy reversal, which was interest rates have been very low for a long time. We were expecting an increase. The acceleration of inflation is speeding up the process, and then we have the war. All of this is making, let's say, fiscal policy return to normality more difficult, but still we must move in that direction. For many countries like Italy, we should keep in mind that the average cost of public debt, in spite of rising interest rates, are newly issued bonds. The average cost of public debt is still declining because we are replacing bonds which were issued 10, 15 years ago, which helped us in running, let's say, our budgets in the coming year. Having said that, we all need prudence, fiscal prudence, and we need policies to boost growth. Tough time for fiscal prudence. Gita, is Minister Franco right about Europe that it's not looking at a systemic crisis because interest rates are going to rise? The ECB is moving closer and closer to ending its stimulus program and raising rates, and already we're starting to see spreads widen out a little bit. I'm sure you know on the Italian versus the German bonds. I saw Klaus Regling. I don't know if he's still here. I flashback to European debt crisis, which wasn't too long ago. Could we see something like that? I agree that, as of now, we certainly aren't seeing a systemic debt crisis. Yes, and the combination of a fast recovery after the collapse in 2020 and inflation also, the combination of those is reducing the debt to GDP in Europe. But that said, of course, interest rates are changing. Now, the current trajectory of interest rates is still keeps the nominal rate fairly low, and real interest rates could stay negative for a while depending upon how fast inflation comes down. So, yes, as a financial conditions, maybe slightly of tightened, but more closer to neutral, the bigger concern is what happens if the inflation that has become more broad based in Europe rises even further, and then that triggers and calls for a much stronger monetary policy response in Europe. And, yes, there is a lot of heterogeneity in the levels of debt in Europe, and Italy has one of the high levels, and there are countries like Germany where debt to GDP is much lower. So I think there is the question of what will happen to sovereign spreads of these different countries, and whether one could see tantrums, which is what happened the last time around. So I wouldn't rule out anything at this point, but as of now, it's clearly the case, yes, that there is no systemic crisis, yes. Mr. Franco, how much is the ECB going to hike rates this year and next? You are a central banker, and clearly you have to deal with that on the debt servicing front. Now, how much do you expect in terms of rate hikes from the ECB in the next year or so? Well, as it has been announced by the ECB, we are moving out of negative interest rates, moving gradually to positive interest rates. The speed will be decided by the ECB, which is fully autonomous in that regard. Obviously, we should keep in mind that we have lived through a prolonged period of extremely low interest rates, which is something extraordinary. I think, never in recent history, we saw a period of nominal negative interest rate lasting so long. Real interest rates were often negative in the 70s in the period of high inflation, but nominal interest rates were never negative for so long. It's fully normal that we go back to a situation in which interest rates are much higher than they are now. Now, the issue is the speed of the process, and there I think the ECB will have to balance the need to control inflation with the need to avoid another recession in Europe, and this is a difficult balancing problem. How close is your up to recession? Well, still seeing our projections and the projections by the commission point to the fact that we are not going to have a recession right now. We see risk, we all see risks related to developments in Eastern Europe, related to energy prices. If energy prices were to remain very, very high, then again, this would not help. The issue of inflation obviously is important for central bankers, but we should try to understand the underlying factors, because if you look at the United States, their inflation is largely driven by demand. If you look at Europe, inflation is largely driven by supply energy related problem. In Italy, the inflation rate in April is 6.3, 6.2, 6.3, but if you were to net out energy price, it would be less than three, and the same more or less applies to all European countries. If inflation is caused by energy prices, I think we should focus on energy prices first of all, and this should affect the speed of the increase in interest rates. Obviously, rates are going to increase, we all know that. We only are discussing about the speed of the process. In the U.S., we would call that a dovish answer on rain hikes. Minister Gettys, what about the you mentioned that the central bank in Brazil has gotten ahead of the Fed and the inflation fight, so what is the outlook there as far as rates and inflation? I want to reinforce the importance of the fiscal front, because when COVID came, the federal spending over GDP was 19.5%. When COVID came, we digitalized and assisted 68 million Brazilians with minimum income so that they could face the crisis at social distancing, so the guy used to sell things at a soccer stadium. There's no games, there's no soccer anymore, so how will this guy survive? He's informally employed, he's not at the formal job market, so we created a lot of programs. The first one is this minimum income, 68 million people digitalized it, receiving money every month, $120 every month to 68 million people. Then we created a job preservation program, 11 million jobs preserved before firing someone, phone us. Instead of paying full unemployment, which is a minimum wage, I pay half unemployment, half minimum wage, and then you keep the guy. You just reduce the shift hours, use the guy half of the day, I pay you the other half, and his job is preserved. So it worked beautifully, we preserved 11 million jobs. Was that your idea? Was that your idea, that policy? Yes, it cost us a lot of money. So we went from 19.5% to 26.5% of GDP, but what happened next year, bounced it back to 18.7% of GDP. So it's not that we didn't spend money. We spent a hell of a lot of money on health, but we cut everything else, so that as soon as the disease faded away, we immediately collapsed all expenditures, and they were temporary health expenditures instead of permanent expenditures with the machine. So this result on the fiscal front and the central bank moving ahead of the curve give us the assurance because when the economy was recovering, instead of letting it go 7.5%, 8% growth, and the fiscal misfunction and negative interest rates, we did the other era. We went ahead of the curve so that we expect that probably we'll get rid of the inflation problem before the advanced economies, and probably we'll be growing faster before the advanced economies because I think they are largely behind the curve, all of them, central bank, federal reserve, BCE, because they're not alert to one problem I've been emphasizing when we met. There was a 30 years, 30 years, global cheap labor arbitrage agreement. Allen Greenspan wrote in 2005 a book, The Age of Turbulence, and then he says, beginning of the 20s, the baby boomers will retire, China money will get back to China instead of financing US deficits, and inflation will be higher because I was happy enough to preside the federal reserve in a period when 3.7 billion people jumped into global labor markets. That's 1.5 billion in China, 1.4 billion in India. All these guys jumped into labor markets, they muted the inflation, and the central banks think they're doing a great job. They're not doing a great job. They're just taking advantage of the global labor arbitrage. So as this global labor arbitrage now was interrupted, China now cannot get more jobs in other countries because the economy is disconnecting, rupturing the chain values and the value chains. So China is decelerating, and wages are going up all over the world, especially in the US because the unemployment rate is very low. So you have a formidable combination of four negative shocks. Wages going up because of the end of the global labor arbitrage. At the same time, disruption in the value chains production, and that's a negative supply shock. At the same time, war, which Ukraine is grains, Europe, Russia is about energy. So food and energy going higher. So all this combination and the central banks on my view, sleeping at the wills. Except for Brazil. Well, I'm very sorry to inform you that except for Brazil on the monetary front and except for Brazil in the fiscal front. Patrick, we're facing the shocks as minister get us laid out and obviously you're feeling the food inflation. What is what are food prices doing in Africa right now? They are actually running havoc because the geopolitical situation between Russia and Ukraine is causing serious food price increases as well as I mean that also I mean this is just actually if you look at the wheat supply as well as the sunflower oil because these guys are the biggest players globally. But on top of it now you have the energy prices that are also skyrocketing and not helping the inflation levels. So you're looking at the the sub-Saharan Africa. As I said, 2022 is projected to its inflation to hit about 12.2%. And if you were to look at the growth rates projected by IMF actually to really come down. But the issue is sub-Saharan Africa has about 39 of the 46 least developed economies. And that tells you that these economies we are not going to recover or get into their pre-pandemic economic output levels. And actually as we speak we are focusing that there might be between seven and nine percent below their pre-pandemic output levels. So and now you also have then the increase in interest rates which is not helping their their debt service costs. And as a result now how are they going to prioritize? The basic necessities are in trouble. The the wiggle room within the central fiscal just does not exist. You can imagine what that that means for many economies in South Saharan Africa. So what what do governments and central banks do there? Well the the central banks the monetary authorities actually already down a hiking cycle because I mean in South Africa alone I think two weeks ago last week we saw a 50 a 50 basis point hike in interest rate because the inflations are forcing them to to respond. So now how then do you strike a delicate balance? It's not easy but how then do we globally get to look at how do we manage the the the the debt situation in emerging economies? IMF actually their SDR initiative there's 650 billion that has been touted actually I think if well managed and decisively utilized can go a very long way in really bringing about some space within the central fiscal for many economies in the emerging markets. Gita I mean how how what does the IMF suggest for countries that don't have the fiscal monetary space to deal with this? They don't have the growth and they do have the inflation. It's a pretty tough mix. It's a tough mix because you know they're hit by the pandemic first and now with at least if you're a commodity importer being hit with rising prices of all your necessities. So we are at the IMF closing tracking very closely the countries in terms of how much of spending do they need on food and oil and gas and what their financing needs are. In terms of what needs to be done unfortunately given the fiscal situation in several of these countries you know I would say that the first practical step is to prioritize where you you spend because you can't really raise your revenues at this current juncture. IMF has been giving financing to countries that also helped the SDR allocation was one such instrument but I want to focus a little bit on the countries and there's several of them that are already in debt distress and that will need debt restructuring and a problem with the international financial architecture is we don't have a good debt resolution mechanism. The G20 came up with the common framework to address exactly this issue and it provided the promise that for the first time we would have a resolution mechanism that wouldn't involve official creditors, private creditors, bilateral creditors and and then we would get a proper resolution of the high levels of debt in these countries. Now there have been three countries that have applied for the common framework. There's Chad, Zambia and Ethiopia and that was over a year ago and we have not so far not a single case where the resolution has been done so I would say that what's absolutely needed urgently at this point when we are in a somewhat pleasant situation of not yet being in a systemic debt crisis is that we create the infrastructure that we create the architecture that's needed that if the world were to head into such a crisis that we have it. Now what would that require? I think first and foremost it requires that the common framework is much more clearer about timelines about the steps that are needed to make progress on the framework. The second is when the common framework was designed it was at the time and we were thinking of countries that were hit by the pandemic it did not include the Sri Lanka's of the world so we need the scope of countries that can be addressed to include even middle-income countries that could be at high distress like Sri Lanka and it's you know it's it's hugely important to put this architecture in place and to make sure you do it in a timely fashion and just one last point in this particular game nobody is doing charity for anybody else there's a huge body of literature that shows that extended debt restructurings are terrible for both the lenders and for the borrowers so it is everybody's interest to get to fix this architecture. Minister Franca? No I would agree with what Gitta just saying that the common framework which was started in the end of 2020 by the G20 is in principle a powerful tool bringing together all creditors public and private the point there is I think the main point is that some countries which are important creditors are not really cooperating with solutions the solution of the problems especially for the three countries which have applied. Who's not cooperating? Well talking about China basically which which is not really supporting the the implementation of the common framework so I think we all agree that it is an important tool but it would require a broad consensus which is not till there we should recall the debt service suspension initiative of 2020-2021 which helped many countries during the pandemic it was rather effective it came to an end at the end of last year and also the SDR the SDR is a big success story I mean and I think one general consideration about say the pandemic is the fact that it was a terrible obviously terrible for the number of people who suffered from a pure economic point of view it was a big experiment I mean and policymakers reacted rather quickly sometimes with innovative tools Paola was mentioning some tools used in the national level in Brazil but I think all countries in a way invented the new tools to pay benefits to citizens in need to allow workers to work from home the cooperation among a country was very tight and decision were taken very very rapidly I think this contributed to innovation for like the common framework but within the G20 it was it also contributed to a number of important they say decision taken together first of all on the taxation of profits worldwide this was an issue I mean open since 10 20 years but it came to an end last year and I think the pandemic in a way put pressure on that let me also recall the initiative taken for the vaccines I mean the ACTA covax where new initiatives started rather quickly and now the G20 is working on the future to make sure that we are all better prepared for future pandemics so having said that I mean the pandemic was a terrible development but it pushed a lot of us to innovate to cooperate and I think especially at the international level it was really important if I think about Europe I mean the next generation EU project was started during the pandemic is for the first time Europe has a common debt it's nice to hear because actually there's a lot of talk this Davos I find about lack of coordination on a global level I want to open it up to the audience for questions but just a final one because China was mentioned Patrick for you which is how big of a creditor is China for African debt right now and how how has that changed and is that a good thing or a bad thing China is a huge creditor to many African countries I must say that in the DSSI or the debt service suspension initiative IMF actually helped quite a great deal in reaching out to China and I must say that actually they've since agreed to be part of the team looking into the resolution of this because given the sheer size of debt by these economies they are very central because there is no sustainable resolution that could ever be brought about without their involvement and without their concurrence or consent so but we are really now I'm hoping that we are going to be making progress in trying to bring about some resolution and and indeed and as I said if if you have 39 countries out of 54 being least developed or called them fragile economies this says these economies are dependent largely on donor countries so if you are dependent on donors and you have your debt levels that you're sitting somewhat at unacceptable levels it becomes a very very very painful situation for for the citizens and that's where you start seeing a lot of migration people trying to look for greener pastures just to try and survive and and the and also what is expected out of these countries in the emerging markets in South Southern Africa is that we begin to start our journey towards the net zero by 2050 and that calls for serious investments in the sustainable infrastructure and as we speak we still have massive infrastructure gaps so we have some possible green shoots that we're seeing in the continental free trade area that ought to be taken advantage of but there is a lot that needs to happen just at the basic level to make sure that the continent is able to begin to create sustainable jobs for its populations questions from the audience I've got more maybe for anyone who wants to answer how would a Russian debt default impact the global economy and and all of these these debt issues and the debt pictures for the various regions maybe Gita kick it off yeah sure and when is that going to happen on your first on your first question if you look at direct exposure to Russia's financial assets for most of the major economies of the world I mean it is small and it's concentrated I mean there are there are I would say it's concentrated in Europe there is Austria and Italy which has more exposure than the other countries do but again it is manageable in this in the size the part that we don't know about are the indirect exposures and you know we could see a situation where if there's a you know the further escalation of tensions or we start seeing the defaults even when they happen that you could see much more tension in the markets than what's visible at this point because of the indirect exposure now there are also you know non-bank financial institutions in the US and Europe that have exposures to Russia but if you look again at the size of the exposures and even if you say well you know you look at the very specialized desks in terms of those who invest in emerging markets this is a small fraction of their exposure of their total asset situation so in the sense of at least directly if there were a default would it then lead to a big reduction in money available for other emerging markets given just size just the sizes it seems less likely but what we are concerned about are the indirect exposures which is the part that is very hard to get to data on get visibility on is it still a question of if and not when well I mean these are developments that are changing on a on a daily basis the question of whether payment can be made on rubles versus in dollars and so on and what's acceptable and what's not acceptable so I don't want to jump ahead on this but if you just look at market pricing of Russia's debt they all show that a default is a pretty high probability then looking at market pricing what would happen to Europe minister franca well I mean if I get a mention that Italy is among the country most exposed towards Russia I mean loans by our banks to Russia at the end of 2021 amount to 21 billion euro then these our banks had liabilities vis-a-vis russian counterparts of 13 billion so the next exposure is 8 billion which is not a big amount of money this for the direct exposure then there is the research stemming from loans to companies heavily exporting to Russia and Ukraine so we had a look for that and the loans overall loans to Italian companies exporting at least 10% of their sales to Russia and Ukraine amount to 4 to 5 billion euro that is again not a big amount so we don't expect a big shock from that third issue is where is in case there were a big downturn a big new recession induced by this new crisis then the story might be different but this will be a more general story minister I want to explore your question you are looking for something which I think is a result of past investment decisions and what would be the impact on the outstanding debt I want to explore a future dimension of your question which is what we heard in a meeting in Washington some 30 days ago secretary of the treasury Yellen saying the investment landscape will never be the same after what happened with this invasion of Ukraine when Russia invaded Ukraine they rise they're rising the the the geopolitical risk dramatically and then the requirements for future investments for receiving money in the future secretary Yellen was saying they now have to meet two requirements the first one is the the near short the idea that your friend had to be close to you because if you have semiconductors in China and there is a war they will locate the south pacific and then you don't have 5g telecommunications you don't have anything automobiles everything stops because you don't have the semiconductors because it's too far so it has to be near but there is also the French shoring because it is not enough to be near Russia is very near and very close to Europe but they're not friendly so they have to be near as a logistic requirement but they have to be friend as a geopolitical requirement and then Brazil is very well positioned because we are very close to the Europeans and to America and if they have to reconfigure the value chains and Brazil is a candidate we are a democracy we are going to a market direction we took advantage of the never-wasted crisis as you said we took advantage of the crisis exactly to accelerate the regulatory frameworks so cabotage 5g and telecommunications infrastructure oil and gas sanitation we changed all the regulatory framework the result of this is that we have already investment commitments for the future of 200 billion dollars that's two martial plans for the next 10 to 12 years that's why Brazil is out of sync with the rest of the world we are out of sync we stayed out of the party there was a 30-year party of globalization everybody took advantage everybody integrated the value chain and we were cursed because we were out of this thing so now we are blessed because the vectors the future is going to be around digital Brazil has a hundred unicorns new bank as the most valuable digital bank in the world we received the price of the world bank as the most digital government in america's ahead of the u.s. ahead of canada seven in the world we digitalized 120 million brazilians we supply digitally the services of retirement of license renewing corporate licenses and everything everything digital so the second axis for the future is the green economy so the future is green the future is digital we'll be there we are talking to the danish companies to the spanish and the german companies they want to produce 15 percent of our energy is wind and solar so we're gonna double that we have 65 is hydroletic power clean energy then 10 percent is wind five percent solar five percent nuclear so 80 percent is clean energy so who is going to produce green hydrogen for europe because they cannot rely on natural gas from russia we are the candidates so these guys who produce wind yolic energy they're going to brazil uh because even the wind and the north sea the wind is very regular so the maintenance cost of capture of this energy is very high in brazil with 25 kilometers of the beach the wind is regular and you have also sun in some countries in africa you have sun but they don't have the wind some countries like north sea around the north sea you have the wind but they don't have the sun so brazil is bound to be a giant on the energy future of clean energy and cheap so what the european companies are doing is a two-fold move first let's spill over our brands because the demographic is in europe is perverse just before you're having an idea uh emerging seven which is bricks plus indonesia mexico our gdp is 52 trillion and then you have g7 the big guys the gdp is 42 trillion so uh belgian france uh they keep retarding the accession of brazil uh to o w cd because their protection is with their agriculture and then talking to them i say hey accept us before you become irrelevant to us we used to trade two billion dollars a year with france and two billion dollars a year with china at the beginning of the century we now trade 120 billion dollars with china and we trade seven billion with france is irrelevant to us so during the pandemics the imports from europe to brazil collapsed 30 but the imports of asia from brazil went up 40 so what is going on is that i i told europeans you lost russia and now you're losing latin america you'll be by yourselves all alone if you don't understand that we must integrate the ones that were left behind we were left behind at that time but now we can grow on the new axis renewable energy digital so food security we are ready we are opening just as i was coming here i made the second round of tariff reduction 20 tariff reduction everybody's trying to protect their jobs now we are opening we're reducing tariffs getting more efficient so we came later at the party but we are very animated about it clearly because we're like 10 minutes over time and i'm going to miss my live show so thank you thank you all for being here i thank you for the audience uh participation as well there's going to be a qr code i did not forget on the screen for more you can get from the world economic forum the chief economist outlook and it covers a lot of these debt issues and obviously the the global economic issues as well thank you so much thank you