 Hello and welcome from London. I'm Gideon Rachman of the Financial Times. By the magic of Zoom, I'm able to bring you a global panel on restoring economic growth. We have an incredible panel all over the world. To briefly introduce them, there's Taman Shanmugaratnam, the Senior Minister of Singapore, Shreethi Irani, the Minister of Women for India, Haruhiki Koroda in Tokyo, the Governor of the Bank of Japan, and Andrei Kostin in Moscow of VTB Bank. We've only got 45 minutes. You're watching around the world and welcome to participate, so do send questions to the chat function and I'll get to them later. But let me get straight to it. Senior Minister Shanmugaratnam, we've had this incredible pandemic-induced global recession. The sessions call restoring economic growth. What do you think the prospects are of a rebound in the global economy over the next year? Well, thanks, Gideon. I think we have to pay less attention to projections or, if you like, central forecasts of growth and think more in terms of the range of possibilities. In other words, think of uncertainty when we shape public policy, when we shape the way we think generally. Last year, we had a very wide range of possible outcomes and I think governments acted forthrightly through both monetary and fiscal policies to at least put a bottom to the possible collapse, both in economies but in public morale as well and the public health measures, of course, took first priority. I'd say this year the code of possibilities is not as wide but it's still very wide. No one can pretend to project what global growth or even national growth will really be like over the course of the year because so much depends on the virus, not just within our own countries but internationally. And I'd say the key uncertainty that we face now is when are we going to achieve herd immunity internationally and if it's not achieved internationally, no one is safe within individual nations either. Vaccine rollout is proceeding, I would say, much faster than expected in the advanced economies than was expected even six months ago but we still have a huge challenge in the developing world and for much of the world's population, vaccine distribution is nowhere where we'd like it to be. But even in the advanced countries, a key question remains as to what the tick-up rates are going to be for vaccines. I think they will eventually have supply. I mean the US, UK, France and so on are going to eventually have enough supply but it's a very serious question as to what tick-up rates will be because to get herd immunity you'd need, I mean I'm not the expert but the medical scientists tell us you need something like 75, 70% of the population at least and now with a more transmissible variance of the virus you need significantly more than that. And if you need let's say 80% of the population to be for herd immunity it means you've got to vaccinate more than 80% because it's not a 100% effective vaccine. So we're quite far away from being able to talk about the end of this crisis. The light is there at the end of the tunnel but it's still a long tunnel ahead and we have to expect shocks along the way. We've already seen a shock in this first quarter. We're seeing further setbacks and further lockdowns in many economies. It's not going to be a smooth path. So think in terms of a world of uncertainty, be prepared for further setbacks and ensure that public policy is still there to protect the weakest. Okay, thank you very much for that. Minister Irani in Delhi, I mean we just heard from Singapore there the view that vaccination is the key. Is that how it seems to you and how things going in India which afterwards producing a lot of the world's vaccine? Thank you. I think that when nations are faced with challenges such as the COVID-19 pandemic there were positions from which fear spoke. And today with the advent of the vaccine and specially the presumptions made of a nation as diverse such as ours that the numbers who will die because of the pandemic in our country will be so large that it will be difficult for governments to come together and adapt to challenges or adapt and bring about solutions. I think India has effectively projected to the world that when the citizenry and the government come together much can be done. I also feel reflecting on the proposition of Minister Singapore that when you look at policy creation we have in the past one year learnt to adapt to these kind of disruptions and I feel that this is the ability to adapt within administration within our citizens and our communities is what gives me hope that further disruption can be qualitatively met. Yes, when you speak about India producing the vaccine apart from ensuring that our frontline workers are vaccinated we are also committed under the leadership of the Honourable Prime Minister to help our neighborhood come to terms with solutions with regards to the pandemic but I think policies be it fiscal or health COVID-19 has brought the world together in sharing best practices in reaching out to each other and in ensuring that this disruption does not engulf in its wake every economy but I also feel that the distinction between so called advanced economies and developing nations is a distinction that is being slowly eroded today competence is being measured by citizens globally and best practices like I said have been shared willingly by administrations across the world so when I speak of my country I think one of the greatest support systems that came through for the administration and our citizens was the use of technology to ensure that services reach far and wide technology to ensure that government and citizens communicate effectively and also the rollout that you see of the vaccine right now is also enabled and supported through our frontline workers through the pharmaceutical industry and like I said those who have dedicated themselves to fighting this pandemic with the aid of technology so I think time has come to recognize that we have faced this disruption very bravely the fact that we are united in our fight against this pandemic and yes we are picking up the pieces of an economy that has been shattered across the world but nonetheless we are hopeful and we are buoyant that we will set the house in order Thank you very much Minister Governor Koroda in Tokyo I mean it seems in every crisis recently a lot of the burden of coping falls on central banks looking at COVID-19 and what's happening now what do you think the appropriate monetary and fiscal policies are for responding? Yes you may know that Japan has been affected by this COVID-19 pandemic although the total number of infection as far as total number of fatalities stay left below compared with other developed countries for instance total number of fatalities is about 5,000 within the population of 120 million however the economy has been significantly substantially affected by the pandemic and we experienced significant negative growth in the second quarter of last year then in the third quarter the economy showed recovery but then the resurgence of COVID-19 pandemic and the state of emergency declaration by the government just a few weeks ago would again tend to dampen the economic recovery in this kind of situation of course the most important economic policy is to maintain employment and avoid unemployment and corporate failure and so forth so the government already implemented a huge amount of fiscal support maybe totaling to around 40% of GDP at the same time the Bank of Japan provided huge amount of liquidity to the banking sector and also we tried to stabilize the financial markets and both the government policy and the Bank of Japan monetary policy I think have been fairly successful in stabilizing the market and avoiding corporate failures and maintaining employment at the relatively high level unemployment rate is still about 3% only so far the combination of expansionary fiscal policy and monetary policy have been successfully maintaining the situation stable but of course basically we have to overcome, contain this pandemic as Minister Haman emphasized through vaccination and creation of immunity in the country and that is a challenge still faced by Japan as well as the Japanese government Thank you Governor Karota, Mr. Kostin in Moscow how have you in the economy been coping in Russia? I mean obviously everybody's taken a huge hit, have you managed to contain it do you think? Can you unmute I think? Hello, yeah, do you hear me? Yes, good morning ladies and gentlemen, it's my 25th annual meeting in Davos and of course it's quite unusual for many years we discussed viruses as potential risk for the global economy but to tell you frankly I think we underestimated those risks over the last couple of years we more focused on 5th industrial revolution on digitalization and we didn't even notice a tiny virus which destroyed all our expectations for profits, for economic growth and now we have to deal with a quite unique and new situation and I think we should focus more on this now I think that as the financial crisis 2007-2008 led to a decision by G20 on Basel 3 to provide financial stability I think similar effort should be done within G20 and other international institutions not only World Health Organization in order to create a new order to protect for health protection, for cooperation in the world coming back to your question about Russia I think Russia is doing quite reasonably well if we can say so if you come to Moscow you will find all the shops, all the restaurants all the theaters starting from the Bolshoi are opened unlike many other countries so Russian economy is unlocked after we have a lockdown in April-May and our health system is coping with this but I have to add that I think it's important lesson for business as well I think private medical care showed quite an impressive results many private hospitals were very quickly converted into Covid hospitals the famous Moscow maternity hospital was within two weeks converted into Covid hospital and some businessmen I think wisely enough built for their own employees they built Covid hospitals like Russel company for example built 6 or 7 hospitals for their employees in Siberia and I think we just showed that we definitely need more common efforts in order to combat the virus and we very much hope that for example we will not have the geopolitical competition about the vaccine Russia invented vaccine quite quickly and there are many debates about who's the best, who will be the first I think that's not the issue I think just as the minister earlier mentioned about the problem of vaccination and particularly for less developed for developing countries I think it's quite important now to find a solution for these and to produce as many vaccines as possible and to achieve the equals distribution of this vaccine and make it available for everybody and of course it's good news that Madam Merkel recently spoke to Mr Putin about the joint efforts we hope that that will result in a more cooperation between Western Russia for example on this issue but for Russia is planning to come back to economic growth this year about 3.7% probably after the negative growth last year of 4% driven mainly by the resource economy of course the prices you see international prices are good starting from oil and finishing with aluminium, nickel and others so we feel reasonably optimistic about this and we hope that by autumn the Russian economy will return to the pre-crisis level Thank you very much now Taman in Singapore I mean one of the most extraordinary aspects of this crisis is something we've all had to get used to particularly a Davos audience which I assume is always on a plane is the almost complete cessation of international travel and for Singapore which is a kind of global hub a trading hub, a travel hub that must have been particularly a stark shock I mean how much can the world economy get back to something approaching normal without travel, is that absolutely key and when can that be restored and do you think, sorry this is kind of a portmante question is it realistic to think from Singapore's point of view or from the world point of view that eventually we'll go back to where we were or do you think we're looking at permanent changes and how we do things I think it'll be a long time before we get back to normal which also means economies at full capacity everywhere in the world travel is part and parcel of the modern world and the flow of knowledge and it's not just leisure it's part of the productive global economy for countries like Singapore of course it's critical it's how the blood flows through the economy but what's important I think is that we recognize too that globally no economy including the most advanced economies are going to get back to normal until the large part of the world that we call developing particularly the developing world outside China recovers from this crisis in the last 20 years the emerging world outside China contributed about a third of global growth with everyone benefiting from it and if you look at the next 10 years, next 20 years that's where the largest opportunities for growth are so it's in everyone's interests that we first get past this crisis in the developing world second very importantly that we invest in infrastructure we invest in international networks we invest in globalization for the developing world so as to create a whole new phase of growth for those economies as well as for the global economy Okay, thank you very much and Minister Irani in Delhi on this question of scarring of the economy perhaps we're too much still in the middle of the crisis to be able to make an assessment but do you worry that a lot of businesses will never come back from the shop that's been visited upon them? I think what needs to be said is that India was habituated to administrative and economical pronouncements annually in our budget and in the entire year that went by because of the pandemic we had our finance ministry and our government on a monthly basis come out with aid and support for businesses big and small additionally I think one needs to flag the fact that one of the biggest challenges that was foreseen in March 2020 was the day-to-day needs of the poor citizens of our country those who are a part of our rural economy and I believe that the pronouncement by the Honourable Prime Minister in late March that over 800 million Indians will receive free food for 8 months brought a lot of respite to specially rural populations additionally recognising that the needs of women specially those in poor families need to be met cash transfers were given by the government to over 220 million women across the country for 3 months recognising that people spend on clean fuel that is why the government also additionally supported over 80 million households with access to clean fuel free of cost for 3 months so I feel that the economic approach with regards to this pandemic was multi-fold on one hand the government ensured that there was health facilities in the government structure adequate enough to meet the needs specially of the poor or the lower middle class also like I said the free ration, free fuel the cash transfers aided in terms of solutions the disruption or for that matter the kind of challenges that the government had foreseen on the rural and the poor population but I must here add that when it comes to industry we saw a plethora of financial aids and packages given we had over and I can just say as per the figures available currently over 2000 billion Indian rupees were sanctioned to around 8 million borrowers in the SME segment alone we also had in our farm economy over 5 million credit cards given specially to our farming community so that they have working capital available to them during the time of distress additional capital funding for farmers was made available through other non banking financial institutions and companies across our country so I feel that one cannot look at solutions from a particular silo to understand that to meet this pandemic and to bear the brunt of the economic fallout of the pandemic globally our government ensured that we are dedicated across all facilities of governance to help shield our citizens but as minister Singapore has said that till such time we do not look at those nations that envelope as I said before the definition of developing countries global economy and its resurgence post pandemic will continue to be a challenge we need to work not only as a global economy but as a global family and when you talk about the global family then you understand that there will be restrictions yes there will be challenges yes but at least our minds will be met in terms of finding solutions that are applicable and viable for all okay thank you very much I mean Governor Corota we heard an incredibly impressive array of emergency measures coming out of India and similar things have been done around the world how quickly do you think governments and central banks should be aiming to get back to more normal monetary and fiscal policies is that even going to be possible yes we expect that fiscal 2020 ending this much would see negative 5.6% growth that is 5.6% contraction but then in fiscal 2021 we expect nearly 4% uptown positive growth and in fiscal 2022 nearly 2% the economic growth so we expect probably by the end of fiscal 2021 or early fiscal 2022 the Japanese economy would recover and come back to the level prevailed before the pandemic started but of course two points we have to remember one we have to avoid what you call scarring effect by many measures I think and second we have to encourage post-COVID new economic way of doing business and so forth for instance under the pandemic situation started telework and so on so forth and universities also started education and so on so forth so I do think that digitalization must be further promoted and that would provide some impetus to further development another is greening the economy or what you call sustainable economic development that is of course quite important even before the pandemic but now it's more important and also it would make our economy more sustainable and at the same time it would provide some growth impetus to the economy so I think two points I mentioned are quite important I mean Mr. Kostin how are you at BTB and in Russia more generally thinking about how things are going to be different if and when this pandemic emerges I mean Governor Karota pointed to a couple of things digitalization more emphasis on the green economy are those the kinds of themes that are also important where you are I'm sure definitely during pandemic we saw a very quick development of digitalization in banking very much not only in trading in many other areas the companies which provided those services they grew 25 percent sometime during this year but people are telling me that's how good we can work from home we can save expenses on office space it's very convenient you shouldn't travel in bad traffic to meet the guy to meet anybody you just have to talk online I don't believe that the humanity would like to leave such a way I know that my staff for example who spent six months working from their offices at home they hated why when we come back to the office I think again my opinion that we should more focus on how to protect ourselves from viruses and to live a normal life rather than trying to focus on how we can live more comfortable under pandemic that's my issue but definitely yes many many things became evident that we can do we can save on expenses we can save time on different digitalization processes on the other hand I think there's also some some threats and some risks for example we see that some digital companies which never had any positive financial results are traded now or released at the stock exchange with the value of billions of dollars though they produce as I say no positive results and a lot of expectations and a lot of speculative I think expectations which might lead to the financial bubbles of such companies digital companies which are now exploiting the situation when everybody think yeah next year there will be another growth of digital products and digital companies and so on and so forth I think we should be very careful about this while having positive expectations for the digital processes so I think I don't think that we will have a very different life after the pandemic I think the digital process it's taking place for some time already but definitely the crisis, the COVID crisis they speed up all these processes and show that so many issues some business issues with digital solutions okay thank you very much now we got a few questions coming in from the audience so I'll put a couple of those to you now the first one from Luisa Chang at HSBC she says are we going into the fifth industrial revolution when workforces can no longer be working together due to social distancing and we all need to adapt to a new way of working now Mr. Crossen just expressed his opinion that he thinks people won't want that and that that's probably overblown but who wants to have a go at that time in Singapore you've always been a very plugged in digital techno advanced society do you think that's where we're going well we were already going there and what COVID has done is to fast forward that process I don't think we'll ever be going back to the old world of retail the old world of a whole range of human facing services but it's not going to be like the last year when you literally had a lockdown of large tracks of the service economy I think some hybrid economy is already evolving we will need to be with each other and see each other ever so often but remote work is here to stay and we've got to ensure that doesn't lead to greater inequality between the knowledge professionals and others who can easily adapt to remote work and the blue collar workers and others who really have to be at work so it has implications in terms of job opportunities and pay but even for the quality of life so adapting our whole workforce to this new hybrid economy of the future particularly its services I think manufacturing will get back to normal and is already back to normal for many parts of the manufacturing sector but adapting a whole workforce to the use of digital technologies to be able to make the most in their own jobs of these technologies is extremely important so a central task of government everywhere in the world working in partnership with unions with corporates, with industry associations and with training institutions is to continually give people across our workforces to these needs of the future so that you get a new phase of inclusive growth rather than one that favours one group and leaves out another Thanks and there's a question that's quite closely related to that and then I think it's a good one from Minister Irani in Delhi because it's from the question is those who are able to adapt new ways of work are readjusting to what we call the new normal but what of the unskilled and least educated segments would love to hear what your respective governments would like to support them and that's from Secanda of the forum Global Shapers Community in Karachi I think I'll join with what Minister Singapore said with regards to the challenge that as technology expands in our workspace we have to be diligent to ensure that those who don't have the technological skills are not dispossessed of opportunities and I feel that the pandemic what it's done in India has been quite amazing because six years ago the Prime Minister had given a clarion call for digital India and then since it was a new solution, it was a new pathway there were many Indians who are circumspect as to how many Indians can possibly come into the technology fold and I think what the pandemic has thrown up is surprising results we have now digital transactions only in the month of December which peaked at over two billion transactions on a financial instrument called UPI and most of the transactions have happened in the rural segment of our economy where people presumed they will not be technologically adept so I think that challenges such as the pandemic have given human beings an opportunity to test their resilience and in so far as skills I also feel that with the disruption in manufacturing segments and various other segments of our economy offer that matter economies worldwide there will now be an introspective methodology there I think which will come to the fore with regards to how we need to upskill some of our workforce I'll give you a very small example in the month of March there was a need prescribed for PPE suits for our frontline workers in India had never ever produced manufactured even one PPE suit in our over 70 years of independent history and in just 30 days we turned the entire PPE suit manufacturing processes we reoriented our apparel industry to manufacture PPE suits and in three months we became the second largest exporters in the world and in three months we gave rise to an industry over a billion dollars from zero companies we went to 1100 companies now that is because the challenge brought an opportunity that was converted by the industry by technologists by scientists and government so I feel that wherever governments are not only assertive with regards to ensuring that the skill needs of the industry and of our citizens are met you will see that the adaptability with regards to the pandemic has been much faster but I also second what our representative from Russia said that nobody likes to always sit at home and type away at the screen they have human beings have thrived always in contact and conversations so as minister Singapore said we are looking forward to a world with a hybrid model possibly but what is incumbent upon us is to ensure that that skill set is made available to all citizens most of all in India under the prime ministers leadership we have an entity called a common service center which has reached to every rural block in our country and provides digital literacy now and close to over six million citizens have already been made digitally literate under this program so there is hope for the digital future of India in those citizens and that administrative establishment thanks very much Governor Karoda I didn't know what you think about this question that we just been talking about about a more permanent shift to remote working if you have comments on that and also another question perhaps a slightly more philosophical one from Leslie Johnston of the boards foundation it says in our natural systems continuous growth is not possible why then do we as global citizens continue to see growth as the answer given that we are exceeding the environmental boundaries is degrowth a more sustainable option yeah maybe as I said this digitalization is quite important quickly important in coming years and the government has decided to establish a digital agency within the government which would promote digitalization in the private sector as well as in the public sector and I think this shows how important digitalization or application of information and communication technology to every aspect of economic activities but now one of my university professor my friends told me that in the last 10 months the university of course used a remote way of lecturing and so on and so forth and that was quite efficient according to his assessment but at the same time he told me that face to face discussion education would continue to be quite important so he said that the mixture hybrid of remote education and face to face education would be the way his university is likely to go I think this kind of hybrid as again Mr. Karman emphasized is inevitable although in many aspects of economic activities digitalization remote way of work and so on and so forth develop further but at the same time we think that face to face communication face to face service would be quite important now on the second somewhat philosophical question I I tend to think that of course we have resource constraint environmental constraint and so forth but those constraints human beings the world has been overcoming through technology and scientific development I'm relatively optimistic about the ability of the human being to further make progress in science and technology development so that we could continue world growth in coming years and decades Thank you very much Governor now we've got about five minutes left I'm going to put two of questions to Mr. Kostin and he can perhaps choose the one that he'd like to respond to and then hopefully we'll all have like 30 seconds to have a last thought Mr. Kostin one question is is there a risk that global supply chains are nationalised to ensure national control and then the second one is something you've alluded to already it says that the world economic forum risk report highlights asset bubbles as one of the top 10 risks and is that risk even greater because of the expansionary fiscal and monetary policy that everybody is using at the moment if you're not to either or both of those questions The first question is a quick answer I think not but the second question is very important and I think yes there's a risk because continuing the policy like we have today very very soft monetary policy should last for too long we already since the crisis 2007-2009 we have this policy but it should stop one day because there's too much money to cheap money and on the other way on the other side we are losing the value of money because for investors for people who have money it's ridiculous that you keep money in the bank or you're buying the government bond and you have to pay for this that is not normal money should have some value on the other hand there's too much money to cheap money and of course I mentioned before there's some bubble it might be on the high-tech companies with the great expectations of the further growth but purely on speculating on the further stock price growth rather than anything else so I think we should be very careful we faced a situation in the mortgage 12 years ago I think we should be very careful again now okay yeah well it has been one of the stranger things of this year at the time when we've got this unprecedented crisis okay we've got about too much money yeah let me just give you all a chance to summarize and perhaps a sort of start a question but take it where you will we've had this unprecedented year do you think we're going to get 2021 is going to look something more normal or not are we still going to be in the middle of a crisis Taaman I'll take the question as going beyond 2021 because I think 2021 is just a transition and the question is what new normal are we getting to the failures that were evident in the last year were not new their failures of the international system that we've understood for a long time but they point to the priorities for the future we must shore up the multilateral system we must rebuild some forms of cooperative internationalism not just out of the goodness of our hearts but out of every nation's self-interest there is such a thing as mutual interest and we have failed to act in our mutual interest on global healthcare we are still failing to act in mutual interest on climate change we are failing to act on mutual interest on a whole range of global public goods they are global public goods because they don't just benefit one country or several they benefit all countries and that's the key lesson coming out of this crisis we have greatly underfunded global public goods and healthcare is a classic example greatly underfunded reacting only after the crisis and reacting in a very fragmented fashion so we've got to address that forthrightly because this is not the last pandemic we're going to have it's not the last global crisis we're going to have and it's going to be far less costly to invest in multilateralism and to invest in global public goods it's going to be far less costly than having to pay the cost of the crises that keep recurring because we have failed to invest in international cooperation it's just far more costly if you look at how much this crisis has cost countries individually it's huge multiples of the cost that was required to simply make our due payments for the international system okay Minister Irani is that the question of the conclusion you draw to more international cooperation absolutely I think those who made predictions about the year 2020 they're tongue before making pronouncement for 2021 but as the only lady on the panel let me say this in India we learnt very richly from our experience of cooperative federalism as an Indian let alone a Minister I'm extremely proud of the fact how citizens and government rallied together that there was no sense of despair however a sense that we will overcome no matter what the challenge the pandemic throws up and I second what Minister Singapore says that this is a time for us to invest in each other because year after year we lived as a global community from one achievement to another and there was absolutely no recognition of the fact that the future can be so uncertain that throughout the window every achievement be it in technology and science or for that matter in areas of defence and I think this pandemic has given many economies and communities an opportunity to introspect that it is as wise to invest in your own resources your own nations as it is to invest in the global community so I'm hopeful that this introspection that has been deliberate because of the pandemic in 2020-2019 late 2019 is giving us an opportunity to come together to recognise that yes technology is important but as important is that human interface that has benefited us as economies as countries and I'm grateful for this dialogue because I think that it leaves that telling question behind is the pandemic and its impact really still behind us are we really looking forward to a new normal or are we still adjusting to the despair that was thrown out by the pandemic I'm hopeful that we will go from despair to new hope Thank you very much indeed and I should apologise to Mr. Kostin and Mr. Karoda because I'm getting urgent messages from the World Economic Forum Headquarters that I've got to wrap it up before we crash some digital barrier so let me just thank you all for a fascinating discussion it's been really great to be able to link up and let's hope we can all meet in person next year but for now thank you very much all