 So many people have been speaking about the climate crisis, but the real question is why is it that we're still not acting at the scale and speed that is necessary? For 150 years we built up a world based on the assumption that we can exploit the planet for free and it translates to very dramatic impacts happening right as we speak. The climate crisis is a threat multiplier, which means it exacerbates existing inequities in our society. We need to remember we're on the same planet and this is the planet that we need to make sustainable for the whole of humanity. Making much faster progress toward all 17 sustainable development goals is the best pathway to adjust future for all and public-private partnerships will be absolutely crucial to this transition. We know that as this transition we require a fast adoption of a lot of new technologies and the question today is how to find the appropriate way to finance this technology. Younger generations are demanding a sense of purpose. They want to look at companies and say I am investing with you all for this reason. The solutions are there. What we need is governments to regulate, to invest and we need business to act with values. History will look at us people, politicians, corporate leaders. These times require not only solutions but speed. There is nowhere else to look than the mirror. We are the ones that need to do this. Good morning. Welcome to the sustainable development impact meetings here in New York at the World Economic Forum and this particular session on the economic outlook and the SDG agenda. My name is Sadia Zahidi. I'm a managing director at the World Economic Forum. Welcome also to our online audience and if you are following the conversation please use the hashtag SDIM23. I'm absolutely delighted to have with us a fantastic panel that will be able to share more on the economic outlook and tell us a lot more about what that means for the SDG agenda as well. Welcome to Minister Hala El Sayed Yunus, Minister of Planning and Economic Development of Egypt. Welcome Minister and welcome also to Neila Richardson, Chief Economist and Environmental, Social and Governance Officer for Automatic Data Processing ADP here in the United States. Welcome Neila to you as well. Thank you. Good to be with you. Thank you for joining us and you were of course involved with the Chief Economist Outlook that was released last week and that shares a fairly grim picture for where the world economy is headed and then specifically what that means for the SDG agenda. We're going to try to show you just a few quick highlights of the data from from that report. So first when it comes to the overall outlook, politics seems to be a big driver of the uncertainty that's underway. In fact, nine out of the 10 chief economists find that geopolitical factors are going to be a key source of the volatility in the year ahead and 79% said the same about domestic political factors. So geopolitics, geoeconomics and local politics is going to be a huge driver of where we end up. Now of course unsurprisingly what that has meant is a very different outlook around the world, both in terms of growth and in terms of inflation. I think we have a visual that provides some information on that. So the strongest growth is expected in Asia with the exception of China with a lot of that growth coming from South Asia, particularly India and East Asia and the Pacific. There are expectations of moderate or strong growth in China from only about half of the chief economist surveyed and back in May when we produced our last outlook that was 97% of the chief economist that believed that this would be the case. 77% are still expecting weak growth in Europe, which is almost no change from the last time we did the outlook. But for the first time in a number of years there's a much stronger positive expectation of growth in 2024 in Europe. For the US a very sharp improvement to about 82% of chief economists now expecting moderate or strong growth and that was only about half back in May and broadly the same for 2024. And then finally when it comes to the Middle East and North Africa their slight improvement in terms of expectations. So 79% are expecting moderate growth at least versus 64% back in May. But of course the Middle East region is quite varied with between the Gulf countries versus others in the region and Latin America and Sub-Saharan Africa present some of the weakest points in terms of that outlook. Now what you see there in the visual you can also compare that to the expectations around inflation and where some of that risk of stagflation which was a key term that I think most chief economists were looking at over the last couple of years where that risk exists. So we'll move on to getting your views in terms of the economic outlook and as I'll start with you Nila you were of course involved as one of the key chief economists in that community. Tell us your views because of course in addition to what you've contributed here into the survey there's enormous amounts of data that ADP looks at and that gives you a very good sense of where the economy is headed particularly here in the US. Well thank you Saadia for that question I mean I think you have to look at the world as we do regionally because we know the growth outlook is very different but when you combine all the data that you show and you highlight you see a growth picture that started really strong after the pandemic the world really catapulted out of the worst of the COVID-19 downturn but you're seeing not just a normalization but a weaker growth from the trajectory we were before the pandemic. So there wasn't that institutional impulse maybe it's back to the political fragmentation that you highlighted that kept that growth at least at normal levels or maybe even more elevated in fact we're seeing a pretty weak growth picture when you look around the world but when you you rest in certain pockets of the world you're seeing something like in the United States which is a very resilient labor market that kind of cuts through some of the slower growth outlook so in the US we're looking at a second half of the year of two percent growth now two percent used to be nothing to cheer about but it's been a big upgrade from what we were expecting at the beginning of the year and the reason for that is really the labor market it's been impenetrable when you think about the causes of what would really drive up unemployment you know higher interest rates slower growth uncertainty we're still seeing unemployment in the US about where it was before the pandemic and that was near record lows and if you look at ECB those 20 country members unions regions are actually seeing the lowest unemployment on record so those really strong labor markets in the Europe and the US are kind of carrying the day even though the growth outlook is a little bit slower in Europe it's higher than what we expected in the United States thank you thank you Nila and of course things look very different in other parts of the world with of course much higher unemployment especially Utah unemployment in many parts of the so-called global south minister what is the picture in Egypt and and the broader economic outlook in the region well thank you Sadia thank you for inviting me here well when you look at the the whole the global picture and as you mentioned the world has been facing unprecedented challenges multiple shocks these multiple shocks have severe impact on different aspects of the economy as has been mentioned of course the pandemic when we started with when we were hit by the pandemic the disruption that happened in international trade with the increase that happened in prices this has been severe and acute in most of the developing and middle income countries what happens in middle income countries is that with high inflation and you are import most of your strategic commodities now what happens is that central banks rush to increase interest rates with increasing interest rates you are faced with on the fiscal side with a budget deficit and a limited fiscal space with a limited fiscal space while there is high inflation and you need to mitigate inflation with increasing of interest rates at the same time you need to increase social safety net social protection for less privileged and poor people in most of the developing and developed countries fortunately enough that in Egypt we have been coming out during the pandemic we have been coming out from an economic reform program so the economy was growing heavily we had invested a lot in infrastructure we had invested we had the fiscal space at during the pandemic to invest in health to invest in digitalization which was crucial during the pandemic so this helps the economy whether the impact the negative impact of the pandemic however it is now we are facing some difficulties with the geopolitical tension because of course things this multiple shocks also put the policy makers in a perfect perplexed situation this perplexation usually you try to coordinate between monetary and fiscal policies now it's even more challenging we cannot with the increase in the strategic commodities you cannot transfer this increase to your people because you had to we offer people conditional cash conditional and non conditional cash cash transfers some of the commodities are subsidized so it's it's very very fragile and very tricky to balance this type of monetary and fiscal policies at that time however what is important is that Egypt has also embarked on a structural reform agenda and one of the main pillars of the structural reform agenda is to focus on the real side of the economy focusing on the real side of the economy will make the economy more resilient so we're focusing more on manufacturing ICT and agriculture food security in a country with 105 million people is crucial so you had to focus on the real side of the economy to increase the weight the other important pillar of the structural reform agenda is the efficiency and efficiency of the labor market with the country with a 60 percent of the population under the age of 35 so working hard on having the working on the supply side of the labor market on the graduates on the technical and vocational side of the education working on the multidisciplinary programs that help narrow the gap between the supply side of the market and the demand side of the market thank you maybe just very briefly is your outlook for 2024 for Egypt more positive than the one this year it is yes it is because we have started the structural reform agenda a year and a half ago we're moving we're expecting to have a 4 4.2 percent growth however what is important is where does this growth come from which sectors the growth come from so we have the tourism sector we have the agriculture we have the real estate sector we have the logistics all these have positive economic growth so growth is coming from a diversified sectors and the other important thing is the impact unemployment so till now we have a decent unemployment rate which is about seven percent thank you and nila if you were to point to other bright spots in the global economy you mentioned already the fact that there are relatively resilient strong labor markets in north america in europe certainly any particular sectors that you think are potential future growth hotspots it's an interesting question and if i could just reference the minister's remarks because those touched on the ties that bind the global economy sustainability that the reforms are focused on a green element in innovation the social piece of young people and getting the proper skills in education and then the good governance piece that you referenced earlier those are the the instruments for a harmonious global economy and so when you look at the sectors that are doing well or at least have done well it's those customer facing people facing services like the care economy those were so important during the pandemic but they've been hampered in a lot of ways in many countries the care economy is something i i care deeply about when you think about the educational support the medical support the health support that working families need just to go to work just to make sure their children are educated that's true no matter where you live and it's true no matter what your income and so that is a place where we've seen some improvement in the united states but not nearly enough to fit with demand and i would risk vetting that that's very important for egypt as well we're seeing interest rate sensitive sectors like manufacturing start to come back even with higher interest rates but it's been slow um i think the focus on services have been both a a a risk and an opportunity an opportunity because that's where we've seen so much growth in the us it's been really the stalwart of the labor market recovery but the risk longer term very opposite of egypt's demographics is in developed nations we have an aging population right and so services are going to be one more important especially in that medical health care space but two labor shortages will likely be more persistent and so the risk ahead is something to keep an eye on even in sectors that have kind of pushed us out of the recovery there's so much investment has and and policy making has been focused on trying to build in the kind of um industrial policy that will work in both advanced and in emerging markets and getting the right kinds of green investments um crowding in capital public and private towards that green agenda do you think enough is being done on other elements of um human development and off the real economy one of the data points that we find from the chief economist outlook is that especially developing economies are likely to face a growing tradeoff essentially between responding to climate change and their wider development agenda which is critical if we're to lay raise living standards do you think is enough is being done on some of those other elements beyond green and climate well let me say that um of course climate agenda is very important and recent years we have been faced by disastrous climate actions recently we had floods in libya we had the earthquake in morocco we had the heat waves in india we had also a hurricane in pakistan so the past few years have been really disastrous to the whole world so the climate agenda is crucial but the issue is that developing countries spend about five percent of their gdp on adaptation only and according to recent estimates of the un environment report developing countries need yearly between 150 to 300 million us dollars for adaptation and mitigation this is a huge amount of investment developing countries are struggling to develop are struggling to invest in their talent because talent investing in talent is key for these countries with the young population as as she was mentioning other countries are aging but developing countries have young populations so you need to invest you need to invest in education you need to because if you don't invest in education and you don't offer jobs this is a sort of a bomb that is going to explode anytime so you need proper education you need healthcare and you need you cannot sacrifice the issue of climate on the agenda of development that's why finance is key in the climate agenda finance is key and it's not we cannot afford after all these multiple shocks to have more debts debts and most of developing countries have soared so we need more investment we need more concessional finance and I think investment is a win-win situation because most of the developing countries and I talk here about Africa specifically have all the ingredients if you talk about green hydrogen if you talk about renewables we have the ingredients for wind for sun we have the young talent that you can utilize to localize industries so it is not a sort of we're supporting the developing countries or we're giving them a hand no it's a win-win situation you are because otherwise the negative impact will fall upon us so I think investment is is key in in the climate agenda so let's talk a little bit about the the second element of of this discussion we did get into the the questions around stg's already I think we've started touching upon that you know here we are alongside the UNGA at the halfway point to the goals that were originally set for the stg's and yet when it comes to progress out of the 140 targets that can be evaluated at present only 15 percent are on track 48 percent are moderately or severely off track and 37 percent are actually stagnating or or regressing in some form or the other so the successive crisis of the last years have taken us off track in addition to that there is this uncertain economic outlook in addition to that there are much more much more geopolitical fragmentation than before and yet the needs for investing around climate human capital to your point around care around the social infrastructure around the digital infrastructure are higher than ever where do you see some bright spots on when it comes to public private cooperation around stg's I think the journeys between multinational companies and governments are a little different and it's different mainly for the reasons that we've already discussed around human capital the labor shortages that we're seeing in advanced economies today will turn into skill shortages tomorrow and we're living in an age where technology and technological advancement are making everyone's job change and so we need a workforce that can keep up with that change and often a workforce that is mobile or at least accessible across borders and so while multinational big companies and I would argue median and small companies are looking at their workforce and their talent trying to make it less have less friction looking across borders benefiting from the wider acceptance of hybrid and remote work and all of the technology that aids human communication on demand on our cell phones we are living in an age where there's geopolitical fragmentation right so companies want a frictionless environment at least when it comes to their talent and governments are more fragmented coming out of COVID than we would have expected so the first question I think is aligning what benefits good growth good job creation and all of those goals that have been so well itemized well it's a more frictionless ability to trade to invest to share knowledge and innovation and so I think the first partnership allows for that mutual multilateral sharing of of capital knowledge and people and that is back to the kind of skill development you were talking about this is this is a very interesting thing because talking about the public private partnership and especially in localization I think localization is essential in the sustainable development goals if you talk about SDGs you have in developing and middle-income countries you have to localize and if you look at the 17 targets 65 percent of them have to be implemented on the local level so we have a very interesting experience in Egypt which is the Hayekarima initiative or the decent dignified life initiative this initiative for the first time we started in development targeting the rural areas so we started offering services developing the rural areas rural areas in Egypt are more than 59 percent of the population we talk about 60 million people and the rural areas we're providing them with upgrade of all quality services sanitation clean water decent houses fiber optics everything decent jobs so this upgrade of of the quality of services is not done with public money alone of course public money is important and it has to be the the start to crowd in the other private and NGO's money but now this we through Hayekarima through the decent life we were able to mobilize capital from a private sector so each one each businessman in his village he wants to upgrade the level of which and it's becoming a sort of a competition you know also the NGOs are there on the ground helping offering jobs offering capacity building providing decent jobs so I think in localization is a very important parameter in achieving sustainable development and it had a very good impact working on the private public partnership but also public private partnership and investment is very important and we in a countries that were not very much receptive at the beginning to the private sector or worked through different types of economic development we have established the sovereign wealth fund of Egypt which acts as an investment arm to crowd in the private sector so we look into different investment opportunities we look into these investment opportunities and we transform them into an investment product and we offer this to the private sector and we do a sort of a de-risking to the private sector we sometime we enter with a minority stake and sometime we do not enter but in the climate and the energy the transition specifically it became a very attractive tool because private sector need the push and need to find the product where they can invest thank you such an important point there about how some of that private sector investment can be localized we're going to put up for you one of the findings from the chief economist outlook which is really around how private capital can be unlocked specifically for use towards SDGs and most of the chief economist find that some of the best wins can come towards directing private capital towards digital transformation second exactly to your point minister around energy access and affordability next food systems and nutrition broadly around climate biodiversity loss and pollution and only then more of a focus on social protection and decent jobs transformation of of education systems and economic equity but I think to your point done right that focus on digital energy and climate related investments can actually unlock a lot also in terms of social progress any particular examples that you would like to highlight where you think there is a possibility of taking that best practice and scaling it in other parts of the world well I think we just heard an amazing one from Egypt but how do you de-risk the opportunity of investment and how do you channel that capital into local resource building that eventually translates the local economy into the global economy I think that's a fantastic way to start but this digital transformation is really the when beneath the sales of the global economy because what it promises to do is to provide all that social capital that you need to reinvest in itself when you educate a child when you educate a group of students that is just an investment that keeps paying off but when you do so in a way that's sustainable and that actually improves the environment then it just compounds and continues and investment is all about compound growth I think the examples of channeling both the social and the green is really important because it's the climate disruptions that have really been people shocks it doesn't just affect the climate of residents it affects the climate of actually producing goods and services it lowers the productive capacity of the world of the region of the local economy so figuring out a way to harness both the people and the sustainability goals I think is the direction forward but the example you gave is one of the best I've heard we have replicated the decent life due to the success that happened because it reached the people people find their house have become decent they have access to clean water so we during the COP 27 presidency we have launched the decent life for resilient Africa in order to with support of international organization the U.N. organizations and some of the African countries we're going to replicate that in order to help the 30% less privileged in the African continent so I think examples and initiatives can be replicated but coming to the issue of digital we have a major digital divide between women and men in developing countries and I think talking about job creation and talking about employability you have to decrease this digital divide so we're investing now we do through one of the institutes we do a lot of capacity building for women she for digital divide and we do a lot of also a capacity building for students at school it's called an initiative called green minds so this green minds we started educating young young students in the schools at at the universities on the importance of restoring their resources and the importance of different initiatives so I think investing in the young people I think is sorry it's the right and and if you can partner community colleges education facilities and corporate institutions into that investment in people that also expands the knowledge set on innovation and sustainability I think that is the winning ticket thank you as as we were saying before this conversation started we could easily discuss this subject for at least a couple of hours we unfortunately only have 30 minutes so we're heading towards the end of our session thank you Nila Richardson thank you minister Eunice for a a good tour as we kick off this week as to where the focus needs to be when it comes to investments big focus on human capital especially for young people and taking into account the gender divide big focus on the digital transformation and ensuring that the 2.7 billion people that still don't have access to digital services have that third big element around climate both adaptation as well as everything that needs to happen around the energy transition and then finally care health and social infrastructure to ensure that both developing and developed economies both aging and young populations have the services that they need thank you very much to both of you and for those of you that are online please do take a look at our economists outlook and follow the rest of the conversations through the rest of this week thank you very much