 Good afternoon. I'm Nadine Hani. I present the business news on Al-Arabiya news channel Thank you for joining us and welcome to the outlook on the global agenda 2015 panel discussion as The theme of this session indicates we will try over the next hour to discuss some of the most important global issues of our time And its outlook on the global agenda the World Economic Forum brought together experts who are renowned Not only for their thought leadership, but also for their commitment to find solutions that will improve the state of the world Their aim was to identify the top trends that will shape the world in 2015 and the key challenges that face the world's regions the findings of the 2015 global outlook publication were different from previous years at a time when global concerns about the financial crisis seemed to have Subsided the participants identified worsening income inequality as the top trend shaping the world in 2015 the divide between rich and poor became part of a widespread public debate Following the publication this year of Tomah Piketty's capital in the 21st century Where he argued that capitalism may permit the wealthy to pull ahead of the rest of society at ever faster rates Bloomberg recently published a feature article debating whether quantitative easing exacerbated the divide between rich and poor at a time when monetary policy Spurred growth but failed to create the needed jobs Hence the heightened risk of jobless recovery another trend on the outlook for this year as a result We are seeing a backlash against globalization and a retreat to nationalism Which takes us to the political landscape Where the rise of extremism as seen in events across the Middle East this year Constitutes one of the major regional challenges for our part of the world Exacerbating this challenge is a lack of global leadership instead of innovating and collaborating to tackle societal and economic challenges Nations and leaders are retreating into isolationism Of course 75 minutes are not enough to cover those topics, but we will try as much as possible I have with me a panel of experts. Please join me in welcoming them I will introduce them in the order in which they are seated next to me is Mr Kevin Rodd senior fellow at the Belfast Center on International Relations at the Harvard Kennedy School and twice prime minister of Australia previously Miss Amina Muhammad is assistant secretary general and special advisor on post 2015 development planning at the UN Dr. Rula Deshti is chairman at the Faro International and she was minister of state planning and development affairs in Kuwait And the first female member of parliament in Kuwait Mr. Majid Jafar is the CEO of Crescent petroleum here in the UAE and Dr. Adam Pozen is president of the Peterson Institute for International Economics from the USA. So thank you very much for joining us today Mr. Rodd, I would like to start with you as we said the outlook I outlined a very important trends That will shape the agenda of policymakers in 2015 But when you you are you are a contributor to the to the outlook But when you look at the list of topics like that, which do you think will worries you the most? And which do you think should be at the top of the agenda of policymakers for 2015? Well, firstly, I think it's a very good thing that the World Economic Forum goes through this annual exercise Most people engaged in public policy around the world do not have time to think Therefore a disciplined exercise to look beyond the radar and to look beyond the horizon is very important So contributions like this, I think are useful as a foundation point for the global discourse Because there is inadequate planning Nationally globally on the challenges that we face in terms of the vast spectrum of of challenges that we face in the decade ahead and the and the The World Economic Forum has produced 10 of them. I take a very simple premise is that politics matters And it can either be an enormous problem solver or a massive problem producer And that is either politics nationally or internationally So I when I look at the unfolding challenges of the year ahead look first and foremost at What are the extraordinary? new phenomenon in geopolitics, which we now face Because politics and geopolitics if it's go wrong goes wrong can undermine everything else and Parallel to that if I was in identifying a second one It's it's handmade in this exercise is the rise of nationalism Let me speak just for a little bit about those two thoughts And I'm sure colleagues here will have different perspectives given their different professional prisms On geopolitics if you stand back and look at what has unfolded in the last year or so We are looking at such a radically new geopolitical landscape Compared with anything we thought was possible even five years ago, even really three years ago I think we'd reached a conclusion that in our hearts and in our minds that the days of aggressive geopolitics Lay with a previous century and not with the 21st century Yet now what we have is massive challenges across the world and we we know the principal zones of engagement we see the Huge geopolitical challenges across the Middle East across a number of states and the potential fragmentation of states within this wider region Secondly, we see the enormous new geo strategic tensions arising between Russia on the one hand And the European Union in the United States and other countries on the other on the question intrinsically of the Ukraine but more broadly as well and Here we are 25 years after the Berlin Wall came down and we are looking at Mikhail Gorbachev warning us yesterday literally of the return of a second Cold War And then thirdly just lurking beneath the horizon and the hemisphere that I come from which is Asia and the Pacific in our Hemisphere we have a collection of 21st century globalizing economies sitting on the top of a bunch of 19th century geopolitical and nationalist Realities where territorial tensions remain as acute as we've ever seen them And so when you put those three things together We are faced with a radical new geopolitical landscape and let me just elucidate a little further on the question of Asia and the Pacific Because often it's not as acutely visible either in this part of the world or more broadly in Europe or in the Americas When we see the rise of China something I've been engaged in for 30 35 years as politician a diplomat a business man This is a earth Moving event. It's it's changing the tectonic plates In the sense that depending on how it's countered if you accept the calculations on purchasing parity pricing Or you accept market exchange rates calculations of gross domestic product Somewhere within the next decade possibly this year possibly a decade's time China will be the largest economy in the world and Therefore when we think of what that will mean in terms for the first time in a couple of hundred years For a non-western non-democratic non-English speaking state to be the largest economy in the world Frankly everything that people have assumed as being the normal state of international relations is going to have a whole new set of dynamics within it That's at a global level Then you go to the sub regional components in terms of The unresolved territorial disputes the Korean Peninsula the disputes between China and Japan The disputes obviously which continue in relation to Taiwan the South China Sea which brings together six or seven different states The unresolved nature of the Indian-Chinese border the unresolved state of India Pakistan And in that region alone You have something like six of the world's nuclear weapons states as well and Asia for the first time in the last year Having come the largest consumer Becoming a larger consumer of defense products than Europe in aggregate And so this is the new emerging reality and therefore The level of statesmanship that's going to be required in Managing these sort of drivers of change is more acute now then in Any period that we have faced Since the formal end of the last Cold War and a final footnote on nationalism and This goes to those who will speak on the question of where goes the global economy and the globalization project as well There's political nationalism not just something which exists in a person's head. It actually it is driven by forces either deep unrequited anxieties about other states or Deep unrequited anxieties about my own lot within my own state And so therefore what we see for example with the emergence of the far-right parties in Europe But also Developments not dissimilar in many other parts of the world is a deep questioning of which Piketty is simply one Articulation of the politics of inequality and the reality of inequality, but frankly the reality of the absence of opportunity Put all those things together As I said at the outset There's always a danger we talk about politics and international politics too much, but it is the mechanism and the means by which we set International structures International frameworks for dealing with the raft of other challenges be their environmental social economic So my overall point is these geopolitical challenges nationalist and international Geo strategic and geopolitical and partly geoeconomic are going to require the most careful handling So they don't bring down the whole house of cards by accident on the point of nationalism Of course we have noticed that in the European elections very clearly but it's it's always a Question of whether what we are seeing in those nationalist movements. Is it a societal backlash and again? to the economic realities and As I had mentioned this Muhammad in my introduction We always knew that income inequality is brewing somewhere underneath But this year it was the year where it came out to the public debate and it's not anymore an elitist Conversation it became part of why it's a widespread debate because also the figures are are scary So why has it suddenly become part of the top top agenda for 2015? Thank You Nadine and congratulations on the at the forum on the outlook report for this year incredible I think we're talking about Shaping a new agenda for one So there is a conversation out there About how do we move from an agenda that reduced poverty to one that eradicates it and then as we go along in that Conversation reviewing what we've done over the last decade or so it becomes very clear that it's not just about eradicating poverty that the inequalities issue is very big on the agenda if anything It's probably the greatest threat that we have To to the next agenda that we put together So I think there are many factors and I see them in the trends leadership is one But from a practitioner's point of view, I would say that not having the right policies that it really address The way in which we inform the plans that we have to invest in these agendas is probably one of the biggest causes for these rising inequalities that we see Economies growing and they're growing without people or consideration for the environment and both of those are Big factors for the tensions that we see today in many of our societies I think we do need to take a look at those the way in which we We craft policies public policy itself in many countries the institutional capacity to address the multi-dimensional aspects of it that all around public policy is not there and I think That we have a number of tools that are missing that the whole data issue of where you begin to even address policy and know Which groups are you talking about? for us today the We clearly see that the policy choices that we have Don't focus on the the broad range of challenges that we have so when we're talking about gender or age Discrimination the rights of genders we have it. This is all missing from what we're doing And I think that that's really where we need to come back to come back to that drawing board and and say You know this is what we need to do to inform plans and then perhaps we target better clearly The redistribution of wealth is a big part of this and how we do that at all levels Inequalities rising not just within countries, but across countries as well and it it's global It's a global issue that we all have to deal with it isn't a cookie cutter for this But but it is some very important that we do less also about targeting symptoms and really begin to do a little more about the root causes of exclusion in What we what we're doing? I'd like to bring in dr. Pozen to this discussion because As miss Mohammed said inequality is everywhere However, probably the reasons are different from place to place, especially the difference between the western world and emerging economies Doctor, do you think that in the United States? It's it's there was also in the Occupy movement lately, which is also anti globalization and capitalism Do you think that it has become part of the debate the issue of inequality? Versus the calling for globalization and capitalism. Do you think that it's taking its necessary? Place in the in the public debate I think policy makers. I think it's very important that the outlook on the global agenda that the forum put together Has identified not just inequality as one of the top issues, but the other economic issue is so-called jobless growth And these two go together I mean I completely agree with minister Rudd that in the background, you know geopolitics true triumphs Overall, but as he said, it's a question of anxiety And I think this has been part of the problem with the inequality debate as the assistant secretary general said We need to unpack inequality and be very clear about what we mean So we toss around income inequality wealth inequality Let me try to put to you what I think are the key developments The first is actually the good news that on a human scale Fewer people are in absolute poverty in the world today than at any time in human history This is not just China. This is Eastern Europe. This is India This is we hope starting now in sub-Saharan Africa and and we have to recognize that this was absolutely impossible to disentangle from globalization We moved a billion people out of actual poverty because of globalization And and it's very hard to argue on human terms that anything is as important as that However, that doesn't satisfy the local anxieties the nationalisms the the issues within countries And that's the second point we have to look at that We talk in this sort of abstract way and even Piketty and others who are ostensibly Coming out a very radical point of view talking this abstract way But to pick up on a term the assistant secretary general used exclusion is actually a huge part of this This is about specified minorities. We know about the people in France and the banlieu This is about specified minorities in various parts of the world. This is about women This is not really about some disembodied thing that inequality is just sort of this generic trend It really is about specific groups The third point that I would talk about is taking that is sort of one of the more negative aspects That as larry summers says in his essay in the in the four in the outlook book, which is well worth reading obviously About jobless growth. This is about lack of education and more importantly lack of demand for low skilled men Low skilled young men in rich countries And it's not and you have a mirror image in this region Which we saw play out politically in the events of the last few years Where there's insufficient demand for high skilled young men in this region But in the end what we're talking about are fundamental shifts Of technology and society that mean this precisely the type of people who are most likely To be violent or prone to nationalism or prone to unrest are the people who are being most displaced And this is this is a key part of the political economy. We have to address From a more purely economic point of view, however, the news isn't as bad as you might think Not only do we have this progress in human terms across the world But we also have the fact that we know we can do something about income inequality If you look at europe for all its failures and their failures are myriad right now The fact remains that these outbursts of of right wing politics these outbursts of intolerance Have actually been relatively contained Despite enormous unemployment comparable to the 1930s And why is this this is in large part because there is a well functioning welfare state in europe We the actual post tax income inequality is much lower and this is of course where the us is so perverse The us has extraordinary income inequality not so much because it is That different in economy than everybody else's it's because it does not support any redistribution Or any sizable redistribution And you can say well, that's a political acceptance the part that you can't easily agree to Any more is the idea that oh this leads to much better performance by the us There's some sort of dickens straight off that if you look more like 1870 you outgrow everybody else The us is outgrowing people but not by a huge amount and so it's not like they're doing well by sacrificing inequality One final point I think it is very important as we look around the world that we pick up on one of the few on two few constructive things that the Perhaps not the people of davos, but the leaders of the g20 have done We've seen two things advanced on the international economic agenda that should help First is the the push and the change in language that came out of the fall imf world bank meetings A push towards infrastructure a push towards public investment That is a global push. That is something that is needed There's a lot of discussion a lot of groups within this conference that are working on aspects of that public private partnerships Gordon browns leading a group, you know, there's a lot going on But I think that that is one of the places where we can all agree There's huge benefits to be had it would employ these men It would provide better benefits and productivity going forward. It would help with the short term growth problem We really have to act on that and the final piece Is to think about some of the global tax issues the oecd has shown some real leadership on this There's new initiatives about avoiding trying to limit tax avoidance both corporate and personal Again, this is not to say that everybody has to be taxed at french rates. That's not going to work But it is to say that That's not It is to say that we there is a danger to everyone when there are small let us call them off shore places That provide distortions and escapes from legitimate taxation And these are two areas where I think the international economic community can move forward I think you touched on two points that I will be going back to miss mohammed with which is the issue of education And the issue of taxation on whether these can be a viable solutions for the widening gap between rich and poor, but I'd like to actually Draw on the point of inclusiveness that you mentioned doctor to talk about the region the middle east dr Deshti We have seen I mean we have all witnessed what has happened in the Arab world and initially the the spark Was because of non exclusive non inclusive growth Do you agree or because there is a certain link that this The lack of jobs, especially youth unemployment, which featured high on the outlook for middle eastern policy makers agenda That this triggered the societal backlash and the political events, but then there are also the other theories So I would like to hear your thoughts on that No question nadim that the issue of inclusiveness that the Citizens of the region have seen that they're not beneficiary of this growth And you see it in egypt you see it in tunisia the countries were growing at eight percent nine percent, but the people at the masses They're not reaping these benefits. So it was only targeted to a certain a group let alone the expectation of the future People didn't see that they have their future is bleak The opportunities countries are not creating opportunities for a better quality of life and standard of living and People are dispersed to the to the extent that they're impatient There's no more patience to give governments time to do any reforms And this is what we see in countries the uprising that happened in Indonesia other countries in egypt libya and other places of it Unfortunately, we're seeing chaos That came and managing the expectations of the people who revolted Is a very big challenge now with the governments who are handling Now they're coming into power and I And here we come we Are in a time where there's so many complex issues and challenges that confront our region And we never decided to take them serious and take serious reforms thinking that we have ample of time And time is on our side Unfortunately, it's not We have our population. We have a young population In this region's gcc we're talking about almost 65 percent is under age of 29 So you have this youth bulge Have a lot of energy But they have a lot of expectation for a better standard of living And if you're not and you're educating them At the same time, you're not reaping the benefit of the education So we're seeing a negative return on investment on education. Unfortunately in this region But at the same time, this is energy. There is talent energy And it's not been utilized So where do you think this young kid will go? When it's this energy is not utilized in a productive activities And you're not creating opportunities for them But dr. Dasty, we keep on talking about education that you have an educated population Yet there are no jobs. So there seems to be a missing link there. Yes So the mismatch is is very important now. We're talking about We moved into quantity Investment just get people to be educated. We ended up becoming a credential societies vis-a-vis a knowledge societies People just want to get a college degree the content in the college degree. It's irrelevant. It was So you're getting a societies that are credential societies. We just want to have a college degree But real life you need to have content knowledge so that you can produce you can be A person demanded for their services are productive now It's it's an issue that the region will have to again invest in training and vocational training and on job training So that it becomes this A pool of adults are recruitable So that the private sector can recruit them because now we're also coming back into the private sector and you have to play a role And you're getting the chicken and egg I don't have a good qualified people and then you tell the private sector you need to invest in them Into it and now we're having another rise Not only the masses and the citizens are frustrated from the regimes But now also they're frustrated from them From the private sector itself Because they're seeing now that the transformation of the wealth is going from the state of any reforms going on and economic reforms It's going to go from the state to a group of people called private sector and certain families And they're not going to see the benefits of it. So you're going to see also a big backlash from the citizens if you're On the private sector energizing the private sector unless we're we're going to have a very Concerted policies that takes into account that we're going to energize the private sector Making sure and ensuring that the masses are beneficiary of this growth But private sector by definition looks for profitability For the bottom line Dr. Pozen very He's giving you a sign very quick intervention because I'd like to hear mr. Masjid Jaffar's view on this point and what you said Nadine about the missing link that you're not getting the right demand This even for the educated The greatest shortfall the way the region this region stands out in the world is its lack of globalization It's lack of integration with the world economy. It's lack of investment from abroad At my colleague at pierce institute marcus noland has done a bunch of studies on this And we find that those economies in the region that are more integrated with the rest of the world are the ones Who do manage to generate the jobs? So it's another piece of this globalization process that the private sectors in this region Except for obviously the energy sector tend to be very inward looking and not open and that's part of the problem But I can't I can't disagree a little bit in this What save got some countries in this region? Is there limited globalization when the financial crisis occurred in the world? Also, it saves that country. You can be globalized like china was without being exposed to international credits And since most of the economies in this region are net savers, that's okay Let's let's hear mr. Jaffer's view on this especially the debate about the jobs the Youth unemployment in the Middle East although now it's it's much worse than it was before the political Events happening in the region Yeah, you're absolutely right. I mean It's been listed as persistent youth unemployment, but actually It is not only the highest Region worldwide with youth unemployment now getting close to 30 percent and I think that's actually under Stated, but it's the fastest rising But I think in terms of the role of the private sector just looking at all the priorities that came out the 10 key issues in the report All of them are universal I mean all of them apply to every part of the world Of course, they apply differently But they are universal challenges and I think all of them Require a multistakeholder approach. There isn't a single one that can be handled by just governments or just the private sector or just you know academia or international governmental intergovernmental International organizations they all require a multistakeholder approach Turning to the Middle East and the issue of youth unemployment Unlike some other regions such as southern europe where it is emerged post the financial crisis It's been a chronic problem that we've been talking about for decades and warning about in this region but Overlaid we've had the political upheavals then and the Global financial and economic crisis and now open conflict. I mean there are some wars going on of course In our region So it's gone from that chronic problem now to an acute crisis and there's a sense of urgency That unfortunately isn't being reflected because And the media and so on Prioritized when you have a war on going the the priority becomes that instead of the underlying That that and it's actually hard to show On al-Arabi or any tv station Youth unemployment. I mean how do you have the I think we have the biggest space for business news among All the channels in the region. Absolutely, but I mean how how do you how you know How do you present those millions of people sitting at home who can't find opportunity? It's a challenge and the the causes in our region Are not unique. They're the same as everywhere. Uh, it's insufficient growth The education skills mismatch To what the market requires which is what we heard about and rigid labor markets in many of these Countries, but there are a lot of focus then ends up on you know entrepreneurship and reforms, but actually We went from Growth that was not inclusive To now no growth at all in many countries in the region. So actually we You know without the engine of growth Uh, you know, we can't we'll worry about the distribution If we can actually achieve some growth many many large economies in the region now are either flat or or shrinking As a result of all this I do want to echo the point on infrastructure and the infrastructure gap It's very clearly defined in our region the world bank estimates between 75 and 100 billion dollars of infrastructure investment requirements annually Is very little spent most government spending in the region Is on recurrent expenditure of subsidies and government sector salaries And you're talking about resource-based economies with with a lot of resources the and oil wealth I mean it The gaps are across the region not just in the resource Economies in fact more more in in perhaps economies that aren't as well end up But if we look at the region overall You're absolutely right. There are trillions of dollars in state coffers There's also trillions of dollars in the private sector But the right mechanisms need to be put in place to unleash that within the region on productive investment That's going to create sustainable Job creation for the next generation. Otherwise, we'll keep chasing our tail We'll never achieve the the political stability unless we start tackling some of these economic priorities now Before taking your comments, mr. Rudd, I'd like to point out that later on I will be taking questions from the audience I'd like you to interact with our panelists. So please start preparing your questions so that we can Give you the chance to address them to to the speakers a little bit later your comments, mr. Rudd I think the conversations are very rich one because we're dealing with the totality of the global challenge Now before I spoke about geopolitical challenges and national political challenges They are real and they're foundational If something radical goes wrong and there's a few things out there which should cause us Some real concern Then in the second level we've had this discussion and I certainly thank adam posentry's contribution about the state of global growth and the global economy because It's ricochet effect around the the global system is profound as well But the summary point is this our existing global system our existing global order Is in a state of increasing crisis In terms of its ability to cope with all of the above That is what we require a focused discussion and conclusion on Not just in the weft but in the international community. Is it lack of leadership? That's leading the world It's not a time to bash the yanks or to bash anyone in particular Let's all just reflect on ourselves for a moment wherever we've come from And just get to some some basic realities here take for example the core question of global growth If you look at the institutional mechanism for managing global growth at present, what is it? And we have the britain woods architecture, which remains and you have a g20 overlay And of course you have national institutional arrangements Well The truth is If we are looking at the current state of global growth, whether it is sustainable or not and inclusive or not We have an extraordinary global economic growth deficit now Why is that the case and what can be done about it if you look at the G20 five years ago it identified the need for a new global growth agenda And it basically challenged the international community to respond in terms of what could drive growth in the future Item number one at last bring about a global trade outcome on doha Five years later. No global outcome on doha the opposite. There's protectionism increasing It's it's it's it's out there But what i'm saying is that if you're looking to add a new increment to growth And depending on which calculations you believe you're looking at In the direction of almost a percentage point of global growth over time, which can be Produced by a genuine global trade of liberalization outcome political will doesn't exist for that The wto hasn't got there the g20 hasn't got there other institutions Including the various bilateral and plural at all arrangements haven't got there as well result It's not a growth driver number two infrastructure The the only encouraging sign i see on the infrastructure front apart from the fact that we're all still debating it is this that When you look at the availability of global public capital to deal with the infrastructure deficit in the world In asia alone the calculation i think i'm looking for my chinese colleagues and japanese colleagues It's a couple of trillion as recently calculated The availability of global public capital through the asian development bank Even if you add the chinese proposal for an asian infrastructure bank is way south of that even if you roll in the world bank So here is the key challenge for the global system How do we actually use global public capital To make it possible for the vast quantum of global private capital either in sovereign wealth funds or in major private investment Institutions to be unleashed in the direction of the global growth agenda And i think a whole creative Re-examination of how you leverage infrastructure developments across the world Cocktailing financial products using global public capital to reduce the risk profile either of the project or in the country concerned To make it possible for the tens hundreds of billions and trillions of dollars necessary to unleash this new growth drive Public capital won't get there oda won't get there But together you can cocktail this in a remarkably positive and constructive way. What's the third one? If we're serious about climate change And for god's sake at this time In the 21st century i'd hope we were And if we're serious about it and bring about an outcome in paris and let's hope we can The transformational opportunities for the global economy through the renewable energy sector massive also in terms of its capacity to generate new growth Now there are the pathways forward trade liberalization massive infrastructure revolution new sources of finance and rather than being permanently frightened by the Adjustment challenges of climate change turn it into a massive economic opportunity Our systems at present globally aren't grasping that effectively And so the challenge for us as an international community without pointing the finger at beijing or washington or anybody Is to use our collective voice through the institutions the international community The crux of which is the united nations system to make it work in which we all have a voice I'd like to hear your comment miss mohammed. Do you think that this is where it starts for to find the needed jobs? Mr. Larry summers as Dr. Pozen has mentioned in the outlook argues that actually We should make use of low borrowing costs of underutilized labor forces to spend on infrastructure And this could be the the trigger for creating the jobs that are needed So where are you from that from that argument? We're saying the same thing that kevin is saying in the discussions that we're having on financing and resourcing the sustainable development agenda right now I think what we do need is that leadership All the way through to bring that collective voice with commitments We've talked about it. We've I think we've realized that this is what we need to do But to do it really needs that collective voice. Where is that collective voice going to come from? Well, we hope that in the next six to eight months we can bring that with business Will the multilateral system And member states to to the four and really make that happen I think if it doesn't then the implications will be a continued discussion on on the rising inequalities that that we can see What that what that does But I want to go back to the education question because I think that that's something that we've underestimated We've all spoken about education as a building block the cornerstone Everybody buys into that's what you need for sustainable development, but we've not done it In a way that we That we need to to really underpin everything that we're speaking about It's been discussed in silos. We've talked about goals that have really addressed access and even in terms of access We looked at some of the gaps that we had that we didn't know very well But we just knew girls were not getting educated So let's put a focus on girls and I think in the last 10 years we've put a real focus on it We have shifted the needle, but in doing that we left the boys behind And and even those that got through the education system have passed through education Education hasn't quite passed through them And so what we ended up with is a lot of young people without the skill sets very basic skill sets If you look at the statistics in Africa in fact, not just in Africa across the globe reading and writing and math all deficits And this is basic skills and without that foundation even though you talk about the certificates I'm afraid those certificates ought to be questioned So there's a whole retooling that has to be done for a generation of children that haven't had the education that they need The quality is totally missing out of that and in many cases they haven't completed education The the The right set of skills that we talk about to meet to meet the marketplace There's also a disconnect there when we sit at the table planning The investments that we make in education. We do them outside of what the economy wants to achieve There's no connect there with it at all It's not addressing the the needs of the economy of the job market doesn't address it Do you ask a child what they want to be the last thing in the in the room is nobody wants to be a teacher You need teachers. Nobody wants to be a carpenter. Everybody wants to be a banker a doctor I mean, it's it's it's a discussion that you don't help inform Even at the level of making those choices about what we need That that'll be beneficial to empowering children as they leave School that's at the basic level get to so I think we we need to big focus on what teachers are doing Knowledge and learning curriculums curriculums that are fit for countries at the level they are And not that we cut and paste them because we think this is the best for around the world So that you've got skills that you can exchange across globally I mean, you have to think about the national level most national curriculums are not functional And we're missing citizen education Many of our countries that have fragile states and coming out of conflict Don't educate that population that have been through a different environment that need different skills We miss there's a mismatch of technology There's so much of it available. But how you use it you miss the teacher and give it to the child technology Is not going to teach the child you need to see it as a tool There are many levels of this at the very basic level that we're missing Sciences is not there. We're talking about transforming economies Technology science, but at the very basic level we we are not investing in that So I think that we we do have to find the the kpi for the minister of finance has to be What impact they get in terms of educational outcomes, but how that's linked to to the to empowerment and job And then, you know, just making sure that You you aren't leaving anyone behind it's too difficult To reach everyone know it you have to reach everyone and it is possible Dr. Darshti, I would like to move on from the economics to the political Angle of what is happening in the in the region But I would like a comment first on what miss mohammad mentioned that we do have the the education But for example, we are lacking the vocational training Where's the vocational training in the in the Arab world? Everybody wants to be a government employee because That's the easy way out and even though you mentioned the the problem That the private sector is also to blame partly, but How do we start solving this issue before I move on to the political angle of what is happening in the region And whether you you said also in your contribution that you think that These economic problems and the lack of jobs is creating the sectarian tension that we are we are seeing in the Arab world There's no question the team. Yeah We we need to energize the economy. We need to have a growth But at the same time at least I'll say the specificity of the gcc region Capital expenditure infrastructure investments will not create the jobs for The required jobs for the nationals And this is where we come to say we need now to revisit We need to have a responsible private sector. We need to have a responsible citizens now to look forward to the issue Because now when you get all these big mega projects Require labor what type of labor we're going to be importing labor So it's all non-nationals And the jobs we are looking for the creation of the jobs is we're talking about there is nationals The demanding jobs now looking at the nationals also There's the issue of the value of work the work ethics now They have to become responsible. So it's not only the issue of job creation is not only hindered on government itself But at the same time we need to have responsible private sector that also take The initiative and spend some money to invest in hiring nationals To play its role It's required role as a private sector at the same time nationals also needs to invest so that to get out of Is is happening because now we will see in the gcc region at least We have voluntarily unemployment People will be willing to not work and be unemployed until they find the right job In the government space Or a right job in a certain private sector And will not be willing to take other jobs Because of of the culture of value of work and now we're saying this compounds the problem And it compounds the problem not from economic loss of The energy and the resources itself, but it compounds on the social and the political will truly come back back to it So we do have to To start managing the issue of unemployment. It's not only education vocational training. It's unfortunate We we have lost it We have lost the investment in the vocational through vocational training now you're ending up have to do it Now on the training and retraining of the graduates itself You invest in them and then the job training with the private sector have to start investing on the job training To start picking up the required talents Into the into the labor force Mr. Jaffer, there is a today a new Input let's say it's the what's happening in the oil markets. There is a new element to take into consideration We are talking about the problems in the gcc at a time when oil prices were at $115 per barrel and the governments have A lot of savings But now we are entering a new stage in the world where the united states is producing more than 8.5 million barrels a day Today we are seeing every day in the news the announcements of how the Gcc producers are shifting to sell their oil in asia because of what is happening in the united states So and we saw this drive for nationalizing jobs in the gcc. Did it pay off? What kind of challenges are we looking at now with the new norm of oil prices between 70 and 80 dollars probably? so Despite the fact that oil prices have been stable at 110 dollars or so for the last few years Um talk of a collapse. I think is a bit premature. I mean it wasn't that long ago oil prices were 12 and 15 dollars And even as low as nine dollars. I think most of the Well, many of the governments in the region budgeted lower than than where the oil price was and closer to where it is Now and as you mentioned have significant savings There are some countries in the region that don't have that luxury and or getting through term oils such as iraq And budgeting at a higher oil price And there's been a lot of focus on you know, the geopolitical considerations and the supply and is is it within opec Is it about us shale? actually Not enough attention has been given to the demand side and that's actually the most important driver in particular china And the chinese economic outlook is probably the number one factor that's going to impact oil prices now in terms of the the role of the private sector and and Hiring absolutely. I mean governments across the region whether in the gcc or in the wider middle east north africa region are at capacity in terms of state provided jobs And the the new ones that are being provided the state by the state are less productive as a result But there is this expectation and it is an issue around the world when we talk about You know rising incomes Also lead to higher expectations and so the type of jobs that people would accept changes It's not just in this region. We've seen countries like brazil and turkey with very good economic results And then suddenly unrest in the streets because people's expectations are higher now Uh in in this region. We we do have this challenge that on the one hand governments asking the private sector To hire more people but the private sector operates in a market And you know you you can't artificially somehow expect that they're going to Share in the burden if the government is doing distortive things such as just Raising salaries or hiring more The two are somehow at odds. We actually analyze that the the regional business council of the middle east north africa In the world economic forum that I had the honor to chair over the last year We focused exactly on this issue these different dynamics How on the one hand the new jobs are going to come in the private sector on the other hand There are things government is doing in the short term today that's going to make that more challenging Over the long term. So it does need to be once again a collective action I want to open the please go ahead For the issue of the oil prices And I think this is the big challenge now on on fiscal budgets For the governments of this region at least the gcc regions all exporters And I think the problem be rest on Regimes in our region if they think they can still maintain the middle income class that they created which is fake to me Okay, it is the questions now because there will be a lot of pressure on the fiscal Budgets and maintaining this middle income class will not be sustainable with the current Policies we have and if not we're going to reform it We do have a middle income class which is creating the social stability in in the in the gcc countries because the governments have created them And these middle income class are consuming of the oil wealth Oil and gas wealth, but they're not generator of wealth for the state At the end of the day if the oil wealth is shrinking and the income coming generates from them This growing middle income class because we have a huge population growth rates almost 2.7 percent in in this region Okay, how do you sustain it? So you're ending up going to end up if you're not going to transfer your middle income class from a consuming middle income class to Wealth generating middle income class you're going to end up seeing a shrinking middle income class and you're going to end up Seeing a starting a social instability social unrest in the in the gcc region as we go along That's why we say there is an urgency of reform Time is against us if we want to sustain the stability of of the countries already we started hearing of many governments in the gcc saying I mean preparing the people about cut in subsidies and Such measures. Um, I want to move on to the issue of of oil. There are so many So many, uh, I mean ideas out there that it might be The that the oil producers in the gulf are happy with lower prices because it helps with the The sanctions on iran Some think that it's better because of the sanctions on russia right now that it's a good tool and and we're starting to hear for the first time the use of oil as a tool for the Political agendas and some say it's good for the united states because it will stop the investment in shale So the gulf producers are happy with that. I will get your point of view on these issues But first let me take some questions from the audience I would like to welcome we have with us eight young people from dubai who are part of the world economic forum global shapers They are sitting with us here today. So thank you for being with us Please raise your hand if you have any question for our panelists and We can we pass on the microphone and kindly introduce yourself first And what you do before you addressing your question. Thank you very much. My name is isham yusuf and i'm from the organization of islamic cooperation Uh, just a very very brief remark regarding the trends I think there are two very important trends that I was hoping to see in this report that I did not see in the 10 In the list of 10 priorities The first one is in relation to our failure in early warning or translating early warning into early action and as a result we have a situation whereby Isis or Daesh is controlling large parts of both iraq and syria and with very little to show in relation to Being able to predict that or being able to act on it in an effective way The second point is in relation to humanitarian crises We are having now a huge gap In financing humanitarian crises in syria, iraq, yemen, sudan, sumalia, central african republic and now Ebola And I think this will result in a huge Problem affecting even peace and security and lebanon and this fragility is one example of how things can deteriorate in this regard. Thank you Mr. Mohamed, would you like to comment on the humanitarian financing? It's become a big discussion for us on whether how far you include that That part of the investment on the development agenda Clearly it has been with us and it has been with ODA But you know the background to which we are dealing with the humanitarian crisis now is not only expanding But it has come into the development arena where we've got years Of of trying to contain that That environment and many of the countries coming out of conflict also pose the same challenge I think it's it's clear that we are looking for innovative ways of bringing in the private sector to deal with the humanitarian Funding crisis and and how we do that because the public funds are certainly not enough We're not going to even the ODA that we talk about now does not meet the commitments and and so therefore The argument that we continue to invest in what would be perceived as a symptom and rather than get to the cause And put more into ldc's and investing in in development becomes that tension I think one of the things that we've we've been able to to see as An argument for better investments more targeted Deeper than we've had before in health systems and education is clearly the Ebola crisis That's just a reflection of states that don't have the capacities or systems to respond Budgets and and the personnel that are needed for it. And so one should should see that Better reflected in the next agenda The early warning system if I could add to what Amina has just said And she's absolutely right about the crisis we face with the available Supply of global capital to deal with the multiple multiplicity of challenges And by the way to acknowledge the excellent work which the OIC does in the field, which I've seen in many parts of the world I think the UN is now doing a lessons learned in terms of the failure of EWS early warning systems on Ebola But it is broader than that We can also point to areas where the UN has succeeded with EWS think of the the The emerging drought in Somalia Some years ago where the WFP succeeded in actually Ford positioning large food supplies in critical areas because the meteorologists indicated We're about to have a big drought in East Africa or a certain in the Horn of Africa So there are positives and negatives. We've seen a very big negative most recently But here's the core challenge And it's goes back to a system problem and goes back to An order problem a global order problem Humanitarian crises of one form or another are not getting less They're getting more and they're becoming more complex And it's partly a product of the globalizing world in which we are in And partly because of the impact of climate change and partly for a whole bunch of other reasons as well To do with fragile states and geopolitics And so when you look at 140 billion or a bit less now, I think Amina in terms of global ODA The call on the ODA budget globally just to deal with humanitarian crises is consuming this Hugely Valerie Amos is with us at this conference. She does a terrific job in trying to With UN ochre and trying to pull together the the call for funds each time We have a new crisis and she will constantly tell you how thin The the the biscuit barrel is on each one of these things Now my point in system terms is These humanitarian crises can't be waved away. They are simply there and becoming larger in number and more complex Therefore, we have to have the funding flexibility to deal with them if we don't have the institutional Caves capability of dealing with causalities in terms of fragile states. So then what about education? Where's the money lie then for what should be, you know, the global education organization the geo There's a new term it goes back to prioritizing. Well, that's not a prioritizing thing We've got to actually be creative about how we deploy new lines of capital For example in the necessary education revolution, which must occur worldwide for basic educational opportunity Can't all come from ODA Obviously national budgets are critical. Well, how do we leverage new private sources of capital for this as well? How do we leverage the new technologies? We see evidence of with digital utilization and parts of Africa But what I'm saying is the traditional view that a bucket of ODA each year Will basically be that which exists in finite form to solve the extraordinary challenges Which the un system now faces is wrong the system actually has to embrace a systemic change In order to open up new lines of capital to deal with it Before taking another question, dr. Pozen, I'd like to go back to you with the question that I had raised earlier There is a feeling in this part of the world that there is a US disengagement from the region On one hand, we waited till September to hear that the Obama administration doesn't have a clear strategy to deal with ISIS All kinds of theories are out there. One of them is the pivot to Asia that we have heard from the Obama administration earlier Another one is that there is the result. This is the result of Self-sufficiency in terms of energy needs for the United States So What is your take on this discussion? I mean, I should not wander too far into geopolitics because it's not my expertise I will say the following every region, even the legendary Asia Feels like the US has pivoted away And why is that and I think it's a combination of fatigue That for all the goods and bads Of direct us military intervention in recent years There is as there's been repeatedly in us history A sense of fatigue and disappointment that we put out lives in treasure and we didn't get what we wanted now That may have been completely unrealistic But the fact remains among the people of the us among the voters of the us and among the political class of the us There's a there is a repeated cycle of that sort and we're seeing it now I think secondly, the energy independence or sufficiency or that is is a marginal effect I think it's there, but I don't think that that should be over exaggerated I think the other thing behind besides the sort of geo military fatigue Is a sense of frankly economic uncertainty That the us has come out of the last few years Looking like it's won a least ugly contest You know compared to a japan a france a uk Perhaps not in australia. You know the us feels like okay We're still better off than a lot of these other rich countries. They've really messed up But it's hard to beat our breasts about our performance the way the us Prayer probably exaggeratedly did in 2000 2002 So you put all that together It's it's an internal lack of confidence increase in sense of Of limitation on the us. It's less. I think region specific frankly than this region perceives it Does anyone here think that it has to do also also with this geopolitical competition that we are seeing in the world this Polarized world that we have between the western powers on one side and now russia on the other let's say How much are these things interlinked? I don't know who would like to answer that mr. Rad To build on what has just been said by dr. Pozen We the rest of the world have got a responsibility to step up to deal with our regional problems and challenges I mean, it's not the universal responsibility of the united nations and not the universal responsibility of the united states Whether it's in europe Whether it's in the middle east or whether it's in our part of the world as well And this is not just national security challenges. It's economic And developmental and humanitarian crisis challenges as well. I think that's a really important point On the challenge of geopolitics I think This is an extraordinarily Complex time we are now living through I think when we look back in the history books We're going to point to 2013 2014 as big change years for the emerging structure of the the global order Kissinger didn't write a book entitled global order for nothing This year Kissinger wrote it because he's worried about it And if there's one bloke who knows a bit about the global order whether you like him or love him It's henry and he's saying that the global order and the global international system which exists within it is under challenge Partly because of reasons of us national political fatigue Partly because the array of global problems is now of a density and complexity And frequency Which is frankly defied the system that we put together back at the san francisco conference So I think to go back to my continuing refrain Rather than one which says well, what are the americans going to do about that? Or what will the chinese do about this? To place the burden on my good friends from beijing. It's what are we going to do about all this and we actually have a system You know people mock the united nations all the time You know, I'd like to say to this audience If not the united nations, then what then what exactly the alternative is really bad Let's hear from the voices from the region on on that Are you worried about changing in the in the map of the region as a result of all of this So looking look, I mean looking at this region and and indeed globally I think what mr. Rudd said is is very true And it's a very very strange time because economically It's more globalization and companies are are acting more globally in particular in in in this region I think in every region and yet governments are you know So companies and the economy is sort of 21st century and going forward Governments everywhere seem to be going back to 19th century Fault lines whether in asia whether in the middle east and even in europe They're not equipped to deal with the new reality. It's very difficult for whether a large multinational or or regional Private sector player to be planning on investments when when you know, these things are occurring I do think and the outlook shows that there is a crisis of confidence There's a crisis of confidence in in national governments only 55 or 55% didn't have confidence in in the transparency and accountability of their national governments And this is across worldwide But then even worse at the global governance level whatever that concept means to people There is a sort of sense that there should be Whether you and other institutions or the way that that state players and other Stakeholders engage at the global level. There should be a sense of global governance tackling some of these issues 85% of those poll thought it was being very poorly Translated in this Outlook on all of the priority issues and others. So there is this crisis of confidence in in leadership I'll just add to what What's been said about reshaping our region. I think With the rise of societal polarization And if governments in this region Doesn't stand up to tackle the challenges that confronting us in a serious manner We will be ending up redrawing and reshaping our It's us not from the outside It's not someone else or some other institution or countries will redraw to draw it for us We will end up redrawing it with the societal polarization that we're seeing now And the challenges that is confronting us and this is why we keep on saying there is an urgent need To look into the issues and to reform serious reforms and tackling them Not only on the economic front, but also on the political and social front Every country in in this region in the arab region in the minna region has its specificity But all of them with no exception Are in urgent need For political social and economic reform If they would like to sustain And to continue the stability they would love to have And create the opportunities for its citizens Let's take a few questions from the audience before wrapping up. Can we pass on the microphones to? The second row and then the third row. So we'll take them in order. Please don't forget to introduce yourself first Amar Khashoggi's I had group Saudi Arabia The most important asset of a of a nation are the generation next and yet we offer very poor salaries to our teachers who Take care of our our children And at the same time we don't communicate enough with the household with the homes of these children We entrust them to People who are poorly educated. So how do we Work together in in improving that With the aim of of providing education for employment at the end of the day. Thank you Who would like to answer that question? Okay I mean a lot of what we need for education is in a Recurrent budget It needs domestic resource mobilization To make that sustainable to to get the kind of investments We need in the teachers and the classroom in the type of quality education that we have And so I think when we speak about the funding mix that you need to make that happen We need to release some of those resources that public funds are used on in terms of infrastructure And other capital expenditures in this innovative financing that unlocks other resources to come in So that you can release more of the money to go for this kind of Expenditures in health in education I think I think that's what we really do need to look at if I look at the budget in in our country It's a huge amount that's needed To to actually service In a federal system all the way through 169 million people We don't have it and and in order to get it we need investments in infrastructure so we can we can look At industrializing in creating the value chains that we need and that needs resources that needs foreign direct investment That needs innovative financing And I think once we start to get the whole picture Together not just speaking about education on its own because it's a social right But that we see it as an integral part of success in in in a macroeconomic framework That that's one one way to go down that line, but it's for education. We've asked A huge social media platform that the un has that's also, you know young people What is it they want to see it's education It's health and then there's a an inter inter change between jobs and a responsive government Again, that goes back to the governance issue. I can I can add very quickly, Dr I can add one thing Look how we look into the quality of teachers The college of education Recruits the lower tier of high school graduates We're not looking at education as a professional degree like medicine Because the pay is not similar again. It's a vicious circle It's not an attractive proposition because the pay is an example in Kuwait We have increased the pay scale of the teachers So tremendous, but it didn't mean that the quality of the teacher have improved We need to think this is a profession to get to get the quality of the people who coming to the education system Who are going to teach our kids? Let alone you have to reform the curriculum let alone to have other things But the quality of teacher need to be revisited College of education in our part of the world have to be revisited to become a professional degree to recruit the right people to So that they become the instructors of our kids, uh, dr. We will Take three more questions. I hope we can have quick answers. Uh, you already have the microphone. So please go ahead Paul Hodges from the united kingdom if I could return to the question of economic growth And the issue to me one of the key issues which we haven't yet touched on is demographics Where the middle east and africa are the exceptions of having very high fertility rates and very relatively very small Older populations if we look at the wealthy parts of the world the states and europe if we look at northeast asia We see that for 40 years we've had in many parts of those areas Facility rates of less than replacement level So we inevitably have a very small generation by comparison in the wealth creation For 25 to 54 age group We also for the very first time in history have a group of people who are now alive and active Up to 55 over 55 up to 70 seems to me if we're going to Regain growth. We've got to address these demographic realities And i'd like to know what people think we could do particularly this new old 55 generation who are being left into retirement at the moment Uh, who would you like to answer your question quickly dr. Pozen and then just to two quick points One you're absolutely right future growth drivers depend on dealing with A demography of all of its complexity One part of it's a global challenge Our chinese friends are acutely conscious of this their own population will peak 2025 2027 and therefore they face a massive set of challenges We're all familiar with them in particular But in the countries that you've just referred to Where the innovation must occur is firstly in terms of Public pension entitlements and how they are funded over time. We've sought to do this in australia with some success But the other is frankly Opening up the labor market flexibility for older people to participate frankly as long as they want to Rather than what we've had so far the second and related point about demography as a as a growth driver Frankly goes back to the question of gender equality and access If you look at the numbers that i've seen produced around the world about what happens to the global growth equation If we unleash women and girls and all their economic potential across the world most of our Problems that we've been talking about in this area at least in the economic context would disappear overnight And this is directly related to education investment is also related to the question of The behavioral patterns of mothers and of women who are the best savers in the world The best starters of micro enterprises in the world and yet the yet the folks around the world who had the least opportunity unleash that With some infrastructure investment unleash that with some renewable energy and a free trade deal problem solved Dr. Poza But but this is sorry, but this is assuming that there is opportunities To use to education to use that you have to change the mindset. Dr. Poza Let me just let me just pick up on what minister rudd said in in one way and then add one more thing I think the the I spoke about it everyone on this panel has spoken about it It is the issue of utilizing female labor force in the right way We have a very current example. There's a lot of bad things said about japan Understandably But the fact is in the last year and a half the abe administration made a decision that the only way they were going to get out of their mess Was better utilization of female labor force participation and it's up two and a half percent In 18 months. That's 500,000. Excuse me. Yeah, close to 500,000 women Who are now being properly employed and utilized even though they'd already been educated But have been excluded in japanese society economic society So it can be done and it matters the second point is just to pick up I think the danger is to get too caught up in demographic determinism I know that's not what the gentleman was saying, but we have to be careful about that because it becomes an excuse Oh, the you the europe can't cope with its welfare states has to do this because there are too many old people Oh, the middle east cannot employ all too many young people You can actually succeed in any demographic situation You just have to think about it and pursue what you got and to the degree the demographic situation is a problem It's like the weather You know, we might you have to live with it I want to apologize from all the people who wanted to ask questions But unfortunately we're running over time and I know that you are going later on to another event So I'm really sorry. Maybe you can talk directly to the panelists right after we finish Thank you very much for being here with us and thank you for the panelists for a lovely discussion