 Hello everyone! Thank You so much for being here. Sorry we're starting a little bit late. My name is Mehreen and I'm very glad to be here with the esteemed panel. Also going to get a little late attendee but I'll introduce them later. We're going to be talking about the idea of global debt to being on the brink and I will read out some scary numbers to start off with. According to the I and A F global debt levels will be reach $310 trillion at the end of 2023. Ewaen am derbyn iaith bod y ddim yn iawn i chi gwrs yma i gael онfydlennu gweithredu yr rhoi heltigfyrfion ar gyflodau cyflogol, ond wedi bod wedi bod we can dweud o phoethaf yn i gael hefyd. Mae Bank of the world has also said that for lots of emerging and developing economies, the state of their servicing builds will balloon to about $450. And this is among one of the highest on records, that figure is from 2022. We also have a landmark election year where 4 billion people, a rhoi fyddai cenderddol yn gymhwy largely o'r cyfnodau sydd wedi rhoi'r cyfnod yn cyfnod. Byddai'r sydd yn byw'r cyfnod o'ch blannuwyr, mewn gwneud cyfnod i'r ffordd yma i gywe, ac rwy'n meddwl ar eich gwelodau yn cyrraith i'r cyfnod a'r angen i gael yn cyfrifiad. Cardiwch â'u gwreidio'n bawsfyn yn ddefos ar hyn o bethau yn cyfnod. felly'r idea ar y cyfwyrd ychydig iawn i'r dynodraeth a'r hyn yn cyflawn i'ch gwneud o'r ddyddau ddaeth, ac mae'r ddweud o gynnwys ar gyfer ddau cymorth a'r dynodraeth yn ddweud. Rwy'n credu beth ydw i'r ddweud o'r ddweud ynglynig, rwy'n meddwl i'r 2022, sy'n gwybod i'r prif. Yr hyn, rwy'n meddwl i'r ddweud, rwy'n meddwl i'r panl, o'r ddweud ymddangos ar y ddweud. Ac yn y ddweud o gynllunio, rydym ni'n byw ymwinell yng Nghyrgrifennid Gweith ejadolol, yng nghyrch yn gallu gwybodaeth yng Nghyrch yn dod i'r rhan, mae wedi'i bod yn gallu'n defnyddio Llanca, Ronil Wydgrometh-Syngar, ac yn hefyd yn gweithio ffyrir Sngwyddiol, cyfnodd yn ymgwymoedd Llyfrgellfaenol Llyfrgell, Llawera Al-Farro, cofnodd Alpert, yr Ardgrifennid Gweithwyr, a Ken Rogoff, chair of International Economics at Harvard. Ken, I'm going to start with you and maybe just problematise the notion that there is a looming debt crisis because it seems that we often in these types of circles talk about some moment of reckoning for global debt. So will it actually happen in 2024? I think the big issue is not just the size of the debt but what's happening to interest rates. We had this period after the global financial crisis in 2008, 2009 where interest rates just fell off a cliff. Now inflation fell but interest rates fell even more than inflation fell. And everybody got this idea, let's make everything, everything's free. So that's certainly the case in my country the United States and it took a lot of pressure off everybody. And now I believe that there are very good reasons that that era is over, that COVID was a turning point. But it wasn't just the pandemic, a lot of things. We have much higher debt which eventually feeds into higher interest rates it has. There's much more populism in politics which is good. It redistributes income but that pushes up interest rates. We have the green transition much talked about here. I don't know if it's happening on the scale that we need but it's probably going to keep growing and that's going to add to pressures on spending and interest rates. And I'm very sorry to say defense spending is almost certainly going to go up all over the world. And I could list some other factors. So that's the problem. Now it's not the same for everybody. So the United States, I can tell you that whichever side wins if they really control things, they'll spend like crazy on their constituency. The Republicans will cut taxes, the Democrats will raise taxes a little bit, raise spending a lot more. And we already have 7% GDP debt which is fine if you're in an epic recession but we're actually in a huge boom at the moment in the United States. So that's going to end up in inflation. So in the countries where a number of advanced countries eventually it's going to feed into inflation but in emerging markets and developing economies many of which were in trouble before interest rates went up. The World Bank I think had said that half or more than half of all developing economies were effectively bankrupt before and it's just an untenable situation. I actually don't think there's a resolution that doesn't involve a lot of debt write downs and transfers and debt forgiveness. We'll get to emerging markets I think a bit later. But just to push you on the US, you're sort of putting a bit of an equivalent on even if it's the Democrats or the Republicans they both carry with them fiscal risks it seems to be an assumption that Trump carries more fiscal risks because of the future of the tax cuts which are due to expire that he generally will come with a big attitude of fiscal irresponsibility and perhaps Biden having done his splurge in his first term won't actually present so much of a looser fiscal policy. I don't know about that. I mean Biden didn't do his whole splurge. He just had a very thin majority senator mansion in Christian cinema. I don't know if you remember the names but there were these two sort of Democratic senators but they sort of cut off probably half the spending that he wanted to do and there's lots more on debt that they wanted to do. No, no, no. I mean I actually would guess that if the Democrats went big you're going to get a bigger splurge but it's immaterial. I mean to be honest if Trump wins I just have no idea what the policies are going to be. I suspect he has no idea what the policies are going to be but I bet somehow it ends up in a lot bigger debt. Lara, would you make of the issues around sovereign debt and perhaps is there beginning to be a bigger differentiation even among the markets or economists about richer countries trying to raise debt to meet new policy areas of spending like climate change, defence, sort of the advanced economy challenges and what emerging markets are having to go through right now? First, let me thank the organisers and for the participants. Let me just mention that I am humble because I have next to me Ken Rogoff who is one of the persons in international economics with Cameron Reinhardt that not only have contributed to the theory of everything I know on this subject but also to the empirics but also I want to also refer to the practitioners who are here also in this panel and are battling with this issue every day and so again I just want to be humble because I have theory and practice next to me. I don't want to say that in emerging markets we don't need to be careful because there's a lot of heterogeneity. My husband is from Brazil, I'm from Costa Rica I always use this as an example that in this basket that we call emerging markets we do have many types and many kinds and many colours and many flavours but broadly I think within emerging markets we have two big buckets one is the ones that have maintained access to private markets I would put Brazil in this bucket and then a subset that for many reasons haven't and so they continue to borrow a lot from multilaterals and bilaterals and let me put perhaps Ecuador and Argentina on this other bucket but there are some other examples. On the ones that have remained with access to the private market and again this just goes back to the fact that sovereign debt is a lot about willingness to pay so if you made an effort to stay with the private sector you were actually putting effort to pay your debts an interesting thing happened we have seen actually debt to GDP levels go down through a mixture, despite the fact that they were spending through a mixture of growth but also surprise inflation so because of the surprise inflation the investors now see these countries having lower debt to GDP and some are like it's not as bad as it used to be and again the numbers do give that sense it's a little bit interesting because it's not as bad as it used to be because they had inflation which is a form of default but perhaps not in your face default but many are of the view that it could have been worse and everyone is bad so let me continue to spend to lend to these countries and again there might be a reckoning but many see like I need to be in this asset class and they're all bad so I'll continue to give them money despite the fact as Ken mentioned that many of these countries now are in good times they're growing, if you're a Keynesian you're spending bad times you have to save in good times and many are not saving in good times but you do see investors there and since there's a lot of bad apples out there I actually do think that they're going to continue to lend to these ones that are putting an effort and then there is these other ones that again are complex and that is the Argentina, the Ecuador and some other countries and this is more difficult because a lot of this is not private debt it's multilateral debt and it's bilateral debt it's also interesting that a lot of these countries increase debt after a round of debt sustainability and we have found out that the solution which may involve forgiving debt is not enough things have to happen, there has to be export promotion there has to be fiscal promotion and that is the part that is trickier because we have not found a way to create that so easily in Costa Rica when I was in government I remember it was the time of very low interest rates and I kept telling the vice president which was in charge of infrastructure look we don't have a problem with lack of money we don't have good projects and we don't have capacity to implement those projects effectively and quickly and that continues to be the challenge how do we create incentives for countries to use the money in ways that gives them growth and productivity and also distributed among all their people President, Lara sort of laid out the two types of countries I think Sri Lanka falls into a batch where it has had to go through a period of debt relief and have negotiations with bilateral creditors including China and is now facing the idea of how to pay this money back so what is the outlook for Sri Lanka after its debt relief was negotiated and so where do you stand now on the ideas of destiny? I must say we have performed well so far and for the first time we have got positive growth I would expect about 2% growth this year and maybe on to about 4 or 5 next year but as I mentioned the main issue we have is how do you repay this because we've had a balance of payment issue and secondly we have a question of budgetary issues also revenue is not enough for the expenditure so on the revenue side we've worked with IMF we are increasing revenue and as growth comes in there should be more revenue we are also revamping our total revenue collection system and we want to have a revenue authority replacing the individual departments far as balance of payment is concerned is how we attract new investments and what are the areas we've looked at as a new short term we have looked at tourism agriculture modernisation which will also lead to exports and renewable energy we have a fair amount of solar and we are in power far beyond our needs how do you utilise it at the moment when there is a demand and we are also going to sell part of it too India but you have a bigger problem here one is populism you have the expectations of the people that have to be met with these United States or with this Lesotho and most of us are living beyond our means if you look it in the conventional way then your bond markers others are at the moment you have to operate on the conventional rules now how do you have these two together if you are going to apply the strict rules or governments will collapse so there is demand you want housing you want education you have health and this is not enough so this is why in my view you have got to sit down and take a view on this how are we going to do it otherwise this issue will go on your government must at the end of the day provides a minimum facility that is expected then in all our areas all our sun they want electricity into the village they want roads into the village we have to give water so how do you my Sri Lanka has done that over a period of time I mean it's not so bad for us we got into this problem because we took the loans on non-tradable goods no way of paying back but all our villagers today have paved roads we have better buildings in schools so at the end of it I can still say that part of it will help us for social development but you have to resolve these issues you know Sri Lanka, we can manage it it's a question of all I think of Africa you could say most and Africa needs that money they need the money just on this idea that you say Sri Lanka can achieve this about revenue collection talking about taxes on households and businesses you have an IMF schema do you think this will breed any seeds of resentment amongst Sri Lankan populations later on or do you think the countries... We've already had foreign investments it's nothing new basically from the time that Dutch came they were investing then the British invested now we are investing we've got others I don't know if that means the IMF is a quasi-colonial power in Lanka but I don't think that's what you mean so in any case we can live with foreign investment and people are expecting foreign investment so it's an open society that's not a major issue for us we think we want to make it on our own but we don't want to add any more burdens I think but I am for debt relief for Africa just because we can handle it doesn't mean that African countries we are for debt relief for Africa Thank you so much for joining us at the last minute it's much appreciated I don't think you missed too much of the beginning but talk us through the situation in Nigeria First blush Nigeria is not a country which has an exploding debt burden it's probably the envy of lots of richer countries in the world in the region of around 40% of GDP and even that is seen to be higher than it was in the years previously so how is Nigeria navigating an environment of high interest rates and when you look around the region so the President has already mentioned other countries in Africa what sort of role are you taking in that debate? Thank you very much indeed and apologies that I came straight from another function a bit late it is an honour to be honoured to sit next to Prof Ken Rogoff and the rest of this distinguished panel you know it's a new administration in Nigeria from May 29 and even as a president-elect we've listened to and been part of the international dialogue right from the Paris financing summit G20, the World Bank, annual meetings, spring meetings and then the autumn meetings and the refrain was always the same interest rates are elevated and are likely to stay that way while the rich world fights inflation and therefore you cannot look to debt as a means of financing growth development industrialisation and we took that on board and realised that the answer had to be domestic resource mobilisation the answer had to be fiscal prudence managing expenditure better and that's exactly what we've done as you say our debt levels are not too bad at all about 38% is a percentage of GDP and this year's budget has boring coming down it has some element of privatisation but chiefly we have a 77% increase in government revenues right now our figures for government spending are too low we do envy Sri Lanka with a talk of their modern infrastructure so government spending 10% of GDP is way too low it has to be raised but it can't be by debt so recurrent expenditure it should do to go down because we've just made the cuts in various recurrent costs capital expenditure as a portion of the total expenditure excluding debt service has gone up from just under 30% to over 50% so that's where that kind of spending on infrastructure part of it will come from what essentially it's been all about really ensuring and this was the promise of President Bola when he came when he was campaigning he said look things are very lopsided I'm going to do two things follow the rule of law, the sanctity of contracts and in addition I'm going to confront I'm going to engage and I'm going to use state power to subdue the vested interests that give us this lopsided picture and as a result those vested interests aren't just private sector oligopolis they include within loose spending within public corporations so just in January we've linked up digitalized, computerized and automated the financing system of government enterprises such that the share of their revenue that is due to government is taken automatically and it's made a big sea change so our answer is to avoid where we see other people have got to as Sri Lanka and some African countries they're having to renegotiate they're there, they're having to go to this common framework we're committed to staying away from that because we believe we have the resources to walk our way out Thank you Vera, there's an idea that not all debt is equal some debt is good and some is bad from the perspective of the markets if you're a government that can say that you want to raise a lot of money it's to do things like investing in productive assets so the green transition even defence because it's become such a major policy issue for richer countries that the market is willing and generous enough to apply this discretion what they don't like is the sort of sugar us short term paying for your tax cuts obviously maybe politically motivated type of fiscal plans is that true and is there a differentiation that's made in financial markets about the types of sovereign debt that the governments want to issue and for what that money is going to be used for Thank you, thanks very much for this panel and for sitting here with all the distinguished friends and colleagues Listen, I think on this question of debt there may be three buckets that we want to look at and as we're preparing to come to the panel I was thinking to myself I went and looked a little bit very quickly at NPLs in Europe and the United States and on performing loans in the banking system to just get some sense of so okay sovereigns in emerging markets are not doing so well but what's happening in some of the emerging market economies in the household debt in Switzerland it's the highest it has ever been in the last 30 years in Sweden, in Denmark it's almost 128% to 221% debt to income levels on the household side on the banking side however and this is an important point that I want to take on in the whole of the ECB NPLs are only about 2.2% they've actually gone I think slightly up or slightly down by 0.02% that shows that the sort of supervisory and regulatory conditions that were put in in 2008 to sort of manage the financial stability and the soundness of the systems in Europe are working and so it means if you have the right kind of infrastructure around debt, issuances then you can actually maybe manage some of the pressures we saw a spike a little bit in Europe on NPLs in 2021-2022 but then it started going down again in the United States the data just came out yesterday hitting record levels of 7 trillion the US has one third of the world's debt Japan has 255% debt to GDP we have the average debt to GDP levels in the G7 countries is 128% so this is just sort of but why are we not talking in Spain Greece is doing a good job they have actually come down but they are still at 128% debt to GDP levels all this to say that one of the things that is happening right now is that the global economy is being hit by exogenous shocks and just continuously buffeted we don't have the kinds of instruments we don't have an instrument to manage an Argentina and Sri Lanka some way because there is some very isolated crisis but when we have systemic global crises it becomes very difficult to have instruments through which to manage them it has also been the case that a lot of developing and emerging market economies have gone to the capital markets without the right kinds of instruments a secondary market for example one of the reasons why the corporate sector and even the sovereign sector in the United States is doing well is that they have repo markets there is a secondary market for the bond issuances and so people are willing to buy more paper because there is a way of getting liquidity and coming back in in the emerging markets you don't have that and I have with a team founded and created what we are calling the liquidity and sustainability facility to allow for repo markets in emerging the existence of repo markets for emerging market economies what does that do it means that the people that can issue is debt price that debt at much higher cost and so essentially when the cost is high and 2024 is going to be an important year we have over 80 billion dollars in debt service payments coming due in emerging market economies many of these economies are economies that are projected to grow and grow well but they have this bullet payment in 2024 that they may not be able to meet until something else is done I am working now with the finance development lab in Paris to see whether we can issue or maybe bring into being something called a debt service suspension initiative too which is to say there is a group of countries that are projected to grow at 5-6% so they are going to grow but they just don't have the 6 billion today to pay that bullet what do we do with them do we send them into default and into a three year G20 common framework that will not work or do we help them over this hump and we are providing immediate liquidity which is needed to keep going and I think we need to look at that and see how we can pass that conversation so that not everybody exactly as you said gets into this bucket of oh you are going into default and so I think if we begin to look at it that way we begin to see that some of the lessons that we take from the financial sector the soundness of the financial system the instruments that we are putting in liquidity coverage ratios are standing two standing repo facilities that are being provided to sort of I would say oil the corporate sector in the United States and provide a lot more liquidity for financing investments to continue that growth at the end of the day the only way we bring debt down is we grow and how is that message landing when you are discussing this idea of building secondary markets is this the worst possible time to be trying to build these types of instruments a bit of lingering fear around the global monetary policy environment and fiscal risk generally or are you finding that people are much more receptive we are finding that people are much more receptive because again as I said there is a group of countries that is actually growing because of the climate transition there is a lot more investment going into the energy sector there is a lot more investment going into green ecotourism there is a lot more investment going into EV vehicles and batteries a lot of that is coming from the emerging markets like India, Sri Lanka I mean I am seeing Canada is also doing some of it but we are all growing because of that the IRA huge boost to that sort of research and innovation that will deliver that growth and so I think we are seeing that there is interest actually from bondholders to come and get the paper but what they are facing also is constraints on limits to exposure a secondary market allows for that to happen and one of the things that the DSSI 1 the debt service suspension initiative did is for a country like Côte d'Ivoire we are not talking about Côte d'Ivoire they are doing well but that is because the debt service suspension initiative acted like a fake repo market we gave them liquidity they went to the markets they restructured their debt they came back they did better and they are doing very well and they are doing very well and I think there is a number of countries we are seeing the Kenya case now is Kenya going to do a swap is Kenya going to go to the common framework they have a 3 billion bullet payment they are projected to grow at 6% but they may not be able to make this 3 billion bullet payment if they don't make it they don't grow at 6% they start falling backwards and I think there is a very important cost to not helping those countries that just need to get through 2024 and continue growing but we cannot do it in a sort of you know I am going to pick Kenya because I like Kenya today today the global community is putting about 12 billion dollars behind Kenya why not behind Ivory Coast why not behind Côte d'Ivoire or Senegal I think we need to have a standard format and that's why we are proposing a debt service suspension initiative 2 through the institutional framework through the markets framework and sort of the monetary policy side I think repo markets swap markets for emerging economies needs to become something that becomes the norm one of the things that has happened with a lot of the work that we are doing a lot of these emerging markets go to the capital markets but without the infrastructure that is needed for them to survive those places and so what we've ended up doing is we've been up on the credit rating agencies but they're just doing their job they're just saying are you solvent or not but if you don't have all this swap windows open for you repo markets that are available so that you can actually do something maybe an IRA eventually with some subsidies not to survive an environment where there is 4, 5, 6, 7 crises hitting you at the same time Ken, we don't have a central bank representative on the panel but at previous wefts they've very much been under scrutiny and maybe it's 2024 the year to give them some credit so if we said in 2023 2022 interest rates would be above 5% in the US they'd be close to 4% in the euro zone and this would happen in an environment where not too much has broken in the financial system although we have had little scares and SVB and some sort of panic around American banking was in the spring but we sort of got over it the fact that we've managed in richer western countries to raise interest rates at a very aggressive pace without necessarily triggering classic sort of debt crises isn't that a reason to sort of celebrate and give them credit or has this all this happened almost not because of their intentions but it's been a happy accident instead Mary and I think that's very well put I mean I think you're absolutely right it's a different country by country but in the United States this is basically the second time knock on wood if there's a soft landing that we've had interest rates raised and haven't had a recession Alan Greenspan was celebrated as the maestro in the early 90s because he was the one who did that the other time I don't know what Jay Powell's fate well he was celebrated as the maestro until he became the villain of the financial crisis so maybe Jay Powell should you know step down after this term he got the chance and so absolutely right however I do think this is a little bit part and parcel of the fact that the economy wants a higher interest rate so investors were thinking oh zero they're raising it well if they didn't raise it to something more sustainable you know we would have inflation and I think just to reinforce that point the economies are surviving I'm talking about the rich economies here pretty darn well with these high interest rates why there isn't a recession and I think that's partly well because we should get used to these higher interest rates for all these reasons I mentioned populism high debt defense green transition this is where we are and that's what something normal is going to look like now I mean I if I talk about long term interest rates I actually think they're about where I would guess they're going to end up but of course short rates will come down although not maybe that fast I think precisely because things aren't falling apart or running a major central bank I'd be taking my time about things because they're trying to feel out where are they going to where are they going to end up and I don't think they know so just to push you on this you're saying that maybe we're getting used to a world of high interest rates which we need and that also comes with it we already quite high levels of debt so have we not just normalise a situation where richer western countries will have high debt ratios and sometimes inflation will help them wittle away and inflate away that debt that makes the ratios look a little bit more sustainable than they might not otherwise be so actually are you describing a period of a new status quote rather than this idea that we're on the brink and there will be a reckoning and at some point something explodes or something gives first before I directly answer that I should say that clearly this situation is very painful for a lot of people the interest rates are higher so if you're a young person and the advanced economy forget about buying a house I mean it's really stunning how people have been shut out and we're talking about emerging markets but you know it that's a the question of what happens with inflation or we go into cycles a political economy question central banks are going to be under a lot of pressure to keep interest rates down I think if they bring them down too much for too long we will get these cycles of inflation but it has to stop at some point because this time even though the United States effectively defaulted on 10% of GDP worth of debt and we heard about how many economies benefited this I mean Italy has a big debt they were a huge beneficiary of the inflation we had in Europe but remarkably it hasn't got built that much into interest rates yet next you know full of me once shame on me or shame on you full of me twice shame on me I think that's what we're going to see with interest rates so eventually governments have to adjust but it may take another cycle of this before that happens thank you in this another cycle as you say can emerging markets in particular Africa was shot out of the capital markets last year no African country issued any paper last year it was just too expensive so you can compare us almost to the young new home buyers in the United States the market is just too high and so we're hoping that there will be some kind of at least tapering maybe not to zero interest rates where we were before but hopefully that we begin to see you know a little bit of a drop that allows a re-entry into the market for those countries because they cannot continue to grow without access to new capital whether it is from the most lateral development system or the capital markets I also just want to mention the example of the rich countries but who was first increasing interest rates successfully and in my view at the right time was Latin America was Brazil was Chile and I do want to give credit because sometimes we only hear about our basket cases and I think this has been extremely successful cases of going first and in fact because they do know that who pays for inflation are the poor people the history of inequality and poverty in Latin America is a history of hyperinflation so that's probably why they acted first but also as Ken said if they don't act eventually they're going to have to pay a premium I mean the term original scene not being able to issue your own debt was going by Latin Americans and again Brazil, Chile, Latin America has been very successful in issuing a lot of domestic debt so we're talking now about countries that have a lot of that but it's domestic debt and I do think it's different than dynamics when they manage but that is also why they want to keep all the good things they have been able to do and thus acted fast and again it does require and that is the sad thing about development if you forget it it's every day you have to do the right thing because the day you don't you get punished twice for sins of the past but of course likewise in Nigeria we do have that ability we do have domestic savings domestic financial savings to raise funds locally you know the elevated interest rates of course mean that in order to attract foreign portfolio investors in especially on the debt side you now have to elevate your own interest rates and that's where the pain comes in and that's where we really feel these elevated interest rates even though as you say everybody stayed out of the international markets last year because it was just too expensive So Ken is basically saying that it would be very risky to do major easing this year but for a lot of emerging markets do they actually want to see big cut from the Fed because it would provide them that sort of a bit of breathing room after so many years of having to deal with the environment of type monetary policy I guess I don't know how much the Fed is often accused of being as you would imagine very US centric in the way it thinks about monetary policy because it has a domestic inflation target but of course this all has consequences for the rest of the world I'm going to open it up to questions and we will take them in a batch if possible and I think somebody will come round hopefully with a microphone and if you could just let us know who you are so we have one gentleman there and another gentleman at the front row and if we got anyone wants to add one more if not we can we'll get back to the panel so this is a gentleman in the orange tie Thank you very Thank you very much I'm Khatib Basi, former minister of finance of Indonesia I would like to give a comment and I would like to hear the response from the panelist I think it is inevitable that the government spending will increase due to the transition, the scarring effect of the pandemic and also the health issue and also to protect the vulnerable groups so one of the solution is to look at on the poster of the fiscal to improve the quality spending let me give an example about the fuel subsidy the face out the fuel subsidy is very significant because the one who take the benefit is middle and upper income group and we can use this money to protect the vulnerable groups also health or anything at the same time we probably need to improve the tax revenue so listen to all the panelist with the possibility of the relatively high interest rate will be very difficult for the emerging developing economies to realise so much on that so I would like to hear the response from the panelist thank you thank you very much and just here at the front as well just here at the front hi Brad Olson I'm a global shaper and also a New Zealand economist I guess particularly for the politicians on the panel who pays because I mean yes we might be on the brink with debt but we're going to need more of it either for the next crisis or for all of the other investments that need to be made who actually pays for that either in terms of higher taxes or services that don't get funded because there's just not enough money to go around and there has to be prioritisation is that low income people is that high income people how do you make that choice thank you okay so the first question on sort of smarter spending by emerging markets and also the idea of energy subsidies which is something that Nigeria has made progress on trying to phase out so who wants to minister you can either tackle that one and also open it up to the rest of the panel basically from a finance minister said you've got to cut the wasteful spending and in Nigeria nothing was more wasteful than a 2% of GDP spending on subsidy only 4% of which went to the poorest 60% of the population so I think we agree with you in fact that's the playbook that we follow that I'm glad you give me a chance to sort of highlight that but together all that wasteful spending that we have dealt with is a range of incentives waivers on import duty, tax exemptions and so forth worth another 1% of GDP so those are the ways in which the fiscal side has been built up and of course in terms of revenue as you say as I mentioned earlier it is through digitisation and through basically first of all doing better with the oil sector to raise oil revenue but in addition to that all the other aspects of government federal government revenue enhancement we focused tremendously on it and in six months time we will see the results and hopefully it will be that we do hit our budgetary revenue estimates and therefore have some have some funds to spend as a government on the social sector education and and health but the main aim and I think you must say where will all this end the main aim is that it's a bet on the private sector it's a bet on investment domestic investment and foreign investment, foreign direct investment in particular and so all the attempts to build government revenue back and stabilise the economy try and get it growing, get inflation down particularly food inflation all that attempt is really in order to make the country a viable destination for investment because as we've said here we basically see debt markets blocked off international debt markets see Lanka subsidised which meant you also subsidise the electricity last year we withdrew all the subsidies and now the petroleum corporation is running at a profit the electricity board is running at a profit our from we had a primary deficit of 5.7% at the GDP 2021 there's a budget surplus of 20 in 2023 our spending on social welfare we have a programme called a new one that's about we are spending about 2.5 times than we did under the old one and the numbers have also increased by about 40% or 30 yeah so it's worked in Sri Lanka some are able to sell it to the people final question was on maybe the honesty or dishonesty of some of our politicians by not really confronting the idea of who's going to pay and the idea that this means future generations are paying back for the current policy decisions through higher taxes and impacts on their public services is anyone actually doing this well I mean I just say there has been some learning about that of course the answers that in most cases the poor suffer the most when you have a death crisis but I think particularly in Latin America and some other emerging markets part of the reason in the large emerging markets we haven't seen a death crisis is they've seen that movie recently enough so I particularly look at Mexico where Amlo Lopez Aparador I don't really agree with my policy but you know he was not going to have a death crisis on his watch because he knew it was his people who were going to pay for it we don't have too long left so I'm going to end with a sort of nakedly journalistic question which is one word answer we haven't spoken too much about politics but I want to ask the panel the one country maybe in their region or generally from a physical perspective which is having elections that they are most worried about you get special points if you don't say the U.S. because that's the one that I imagine most people will want to say so maybe Vera let's start with you and then we can go around counterclockwise we don't have to elaborate South Africa I'm trying to think in Latin America was having an election that Mexico I'm actually not a worry about Mexico I think I'm sorry but I'm paralyzed by the U.S. I don't expect anything else I didn't expect it Syria alone and finally president Sri Lanka That's probably the right answer and we have Pakistan and India Exactly, Paul is just worried about his own country's election that's what we like to hear that's the end of the session thank you so much everyone on the panel I think that was a very wide-reining discussion and luckily unlike a lot of the chats that I have in Davos it was not entirely Europe or western centric which is always very good thank you everyone for being here and hopefully we'll see you