 Welcome everyone, welcome to our hosts, our Davos hosts here for the week. Thank you very much for having us here. Welcome also, thank you for joining us, Seer King of the Belgians, thank you very much. Good afternoon, I'm Kevin Delaney, I'm Editor-in-Chief of Quartz, it's a business news site that you can find online at QZ.com. Thank you for joining us for the discussion today about rebooting global growth. We have an excellent program and we're going to involve you all in the discussion. This question of rebooting global growth is one of the most profound questions of our day, and it ties into many of the other ambitions that are voiced here in Davos this week. Reducing inequality, welcoming migrants, ensuring women can make their just contributions and reap their fair rewards from the economy, and transitioning to a sustainable carbon footprint globally. All of these are much harder to achieve without robust economic growth. What seemed like a tough challenge a few weeks ago, in the most recent days, might seem even harder. China is officially growing at its lowest rate in years. The IMF for the third time in the last year has reduced its global economic forecast for this year. A new PWC survey of CEOs shows that just 27 percent of them think that growth will improve this year. That number was 35 percent a year ago. You look at the global markets, investors are spooked. Christine Lagarde of the IMF has described the current state of the global economy as the new mediocre. Some people fear worse than that. I'd like to start, we're going to involve you in this discussion today, and I'd like to start by asking it for a show of hands in the audience. This may seem like a simple question, but please raise your hand if you are pessimistic about the global economy. Can you put your hand up if you're pessimistic about the global economy? That looks like about a third of you or a quarter of you who are pessimistic about the global economy. I'm going to ask now, can you raise your hand if you're concerned that slowing economic growth will directly impact you or your families? This is a related but different question. If you raise your hand slightly lower, 10 percent or so. We have a panel of extraordinary quality to actually walk through these issues and to answer your questions. I'm going to start right next to me. I have Nelson Barbosa. He's the Minister of Finance of Brazil. Next to him is Enda Kenney. He's the Thyshok of Ireland, the leader of Ireland, the Irish government. Unfortunately, Mr. Simsek, the Deputy Prime Minister of Turkey, is not joining us today. Moving on, we have Joseph Stiglitz. He's a professor at Columbia University, and he's a winner of the Nobel Prize in Economics. Then last at the end, we have Zhang Xin. She is Chief Executive Officer and co-founder of Soho China, which is China's largest commercial real estate developer. Before we dive in, a quick word about the format. The promise of this open forum is that we'll involve you in these discussions. There'll be several occasions during the discussion for you to ask questions, including one early on. If you have a question, we'll be coming to you very quickly. I'm going to start first with the panel. Mr. Barbosa, I want to ask you. Brazil had an economic contraction last year. The forecast is that the Brazilian economy will contract again this year. Is this the new normal? Periods of contraction, flattening growth, or how do you view this? This is not the new normal. This is a transition phase of Brazil. The international scenario changes a lot, and we are now in the phase of that, a new phase that succeeded the boom in commodities, and Brazil is adjusting to this new international scenario. We benefited a lot from the high commodity prices during the last decade, and most importantly, we used that to finance an increase in our social safety net. That reduced the inequality in Brazil and contributed to a very virtual cycle of reducing poverty, increasing investment, increasing productivity. But in the last three to four years, the situation changed, both domestically and internationally, and now we are facing the challenge of consolidating the social activism that we have managed to have in the recent past and preparing our economy for this new phase, this new environment of the global economy. So it looks like a tough year for Brazil, again, with contraction, but you're optimistic in growth beyond that? Oh, yes. Brazil is still a large economy, the seventh largest economy in the world, 200 million people, and most importantly, a very diversified economy in terms of products that supply. We make plans and we export iron ore. We export oil and export some high-tech products as well. So the question is to prepare our economy for this new phase of the global economy, and that requires some structural change. We are in the middle of that, and we are also an advanced democracy. So this kind of structural change has to be discussed with all the stakeholders, and this process is underway, and I'm pretty confident that we'll get through this transition phase. Mission, I want to turn to you. One of the topics of discussion this week has been China, and China's growth has been slowing. There's a lot of concern, particularly since China represents something like 15% of the global economic output and has spillover effects in other countries. As a private business person, how concerned are you about the economic outlook for China? I am very concerned, not because I believe that the Chinese economy will collapse, but because we are transitioning from an extremely high-growth period of time to a relatively slower growth period of time, when I think the government just announced that we had a 6.9% GDP growth last year. Now, to most other countries, 6.9% is pretty nice, but for China that was used to growing at 10%, 8%, 6.9 seemed to be a lower, a new normal that we called it. But as a private entrepreneur, who we are real estate developers, we're actually seeing two sides of it. On the one hand, you see the media report is very much focused on the stock market is going down, how many percentage, and the local currency seem to be devalued against US dollar, and there's a lot of negative news coming out almost every day. I'm a publicly traded company, so our stock price has gone down like a huge discount to the asset value. But on the other hand, inside China, what we're seeing is of all the new buildings that we're completing last year this year, we haven't really seen any of the new buildings sitting there and not be able to be leased out. The buildings are continuously to be leased out, while the traditional economy are not growing as much. The new ones that I see taking up the new office space are internet companies, mobile companies, technology companies, and that seems to be at least driving Beijing and Shanghai's office space demand. But you said you had significant level of concern. I have significant level of concern. This kind of a decoupled reality. The stock market's volatility is a reality and the media's negativity is also a reality. But on the other hand, the business that we do daily business seems to be matching the 6.9% growth. So that's what I'm, if you just look from the outside, if you just read the media, you think this is a country, if you take out China, the name, you give it to anybody, you think this is a country about to collapse. But not so much the case when we actually work and live in China. Professor Stiglitz, I want to pull you in. You've talked about, you've echoed Christine Lagarde talking about the new mediocrity. You yourself have written about the new malaise. How do you see the state of the global economy currently barring really significant government action, which we'll talk about later? Yeah, I mean, the last phrase is really critical because I think the austerity in Europe, we have even a small dose of austerity in the United States, that is the major factor contributing to the weak global economy. But the underlying problem with the global economy is lack of aggregate demand, lack of global demand. And there are three, four primary factors contributing to this weak global demand. One of them is another theme that's being talked about a lot in Davos, which is the growing inequality. Those at the top don't spend as much of their income as those at the bottom who have to spend 100%, sometimes even more. So when you have this growth of inequality, which has been really quite astounding in the last third of a century, you're going to have a weak economy. The second thing is that countries all over the world are going through a structural transformation. And that structural transformation is hard. Markets on their own don't do it very well. Each of the areas of the world have their own structural transformation. Nelson was talking about the challenges facing Brazil. China's going from export-led growth to domestically demand-driven growth. United States and Europe are going from a manufacturing economy to also a service-based economy. And all of this, historically, Markets, for reasons I could explain, it would take a long time, never do this very smoothly. And we're seeing that once again. So that's actually contributing both to the global weakness in demand and to the growing inequality. The third has to do with the transformation in China. China over the last 15 years, and particularly in the last seven years, has been the engine of global economic growth. And part of that has been enormous demand for natural resources. Brazil benefited from it. Africa, Latin America benefited from it. It should have been obvious that it was not going to continue, but Markets are always sure excited. And they did see the inevitability. And the result is that China had to move from, you might say, the quantity to quality of growth. It was going to be less resource-using. And that drives down the price of commodities and, you know, including the price of oil. Now, you might say, at the beginning, a couple of years ago, when the price of oil started going down, people said it was going to be a big boon to the economy. And they were focusing on the users' benefiting. But if you look at the world system as a whole, except one side benefits, the other side loses. So when the oil users benefit, the oil producers lose. Now, the question is, what is the nature of the response? And it's very asymmetric when you have very big responses. By that, I mean the gainers don't increase their spending, i.e. those who are seeing lower prices, as much as the losers have to contract. And you're seeing that very forcefully in two ways. Saudi Arabia thought it was in very good economic shape, but at the pace of spending that it was engaged in, they had only six years of reserves. They had no choice but to cut back dramatically in their spending. Similarly, all that drilling, all that, you know, it's good that they stopped that for the global environment. But in terms of aggregate demand, that cutback is again leading to a weak global demand. And that is the primary problem. The private sector is not gonna restart it on its own, and it's gonna take government. So we're gonna follow up on some of these themes, I'm sure, including what governments can do to catalyze growth, and we'll go in there. Mr. Thyshok, so Ireland's economy last year looks not unlike China's in a way. Your growth in the GDP growth in the third quarter is about 7%, which is a very high growth rate compared to virtually any other country in Europe. So putting the Irish success story aside, what is your outlook for growth in Europe more broadly and in the global economy? And we'll talk about some of the ingredients of your growth in a little bit. I think I should say first of all that politics is about people, and their lives, and governments are about making decisions. In this business you want to be optimistic, despite the challenges that we all face, whether it be climate change or oil or energy or terrorism or migration, all of these are issues that impact on the general political field. Just five years ago, when the government I lead was elected, we were under the hammer of a troika, so had to make some very difficult decisions. Now in a different space, growing rapidly with the long-term economic plan set out to manage that economy in a way that it will not go back to boom and bust days. But I sit around the table at the European Council, obviously in the middle of the recession, in its darkest days, at its deepest point, in Ireland we held a referendum of the people on the fiscal stability treaty. Now you might say that generally electorates want to beat down governments if they get a chance in referenda. And yet in Ireland's case, the result was 60, 40 in favor, linking therefore our future to the euro, to the eurozone and to the European Union. So the collective authority of the European Council, representing 500 million people, carries with it enormous potential. And yet we find that we've been unable to complete the single market. We've still not broken down the digital barriers internally. We still haven't been able to conclude trade agreements in other places like the TTIP arrangements or whatever. And yet these are things that need to be done by politicians who have got to grasp the concept of leadership and what it can mean for the future. So the world has changed utterly in the last 10 years and will again in the next 10. And it's to be aware that those frontiers up ahead are changing so rapidly. And that's why the way that politics was done before, the way that laws are drafted, fall far behind the movement that we find in a modern world. And yet the problem I suppose is that in bigger countries, you've got different forms of government. Around the European table, you've got 28 leaders. And the thing is that you go to meetings after meetings as a new prime minister here or a new prime minister there and it takes a while to bed that down again. And yet we have fundamental principles set out that are for the future, that are about growth, that are about employment, and the best route out of austerity and the best route out of poverty is a job. It's a job that pays where people have the respect and the dignity and the right to go to work and that that pays and that the country would therefore to their own locality, their own economy, their own country and as part of the bigger market. So I hope that the situation for instance now that Europe will consider at its next meeting, dealing with the question of a referendum by the British people as to whether they want to stay in Europe or not is a matter of very significant importance in terms of the union, in terms of its future. And I think that that's an important consideration for leaders to look beyond the next five, 10 years. See where do we want to be? What is the rising generation going to do? Look at the way technology is changing. All of these issues, research, innovation, food security, these are matters that governments have to grapple with. We had an agreement in Paris in respect of climate change following the millennium goals of the United Nations in America. I hope that everybody, ourselves included, measure up to the targets that are set here because it's about the time beyond our own time. And that's where we need to be. I think the eyes of the world will turn to South America in the next 20 years. The eyes of the world will turn to Africa in the next 20 years. Enormous potential, enormous potential. The growing populations, immense size in China, India, Malaysia, Indonesia, and the Far East. Though we're only a very small player in all of this as a country with just a few million people, but we've set a model here for how government can actually deal with a very catastrophic economic position. And yet in a relatively short time, come through that. The important thing is that you set down the foundations to continue that prospect for the future. The young people are given a sense of hope, given a sense of inspiration that they can play a part, follow their career ambitions, and have a lifestyle. And it's important, therefore, that we focus on those bigger pictures. But as a small country, we are, if you like, a small model demonstration of how far you can move in a short time. The challenge is to put in place the process, a longer-term economic strategy, to be able to continue that for those who come behind us. So we're going to turn shortly to what governments can do to catalyze growth. And we'll talk about some of the specifics that you've touched on. I'd like to pause here and take three questions from the audience. So I'd ask you to raise your hand. We have microphones. If you can introduce yourself very briefly and pose your question very briefly. We'll take the three questions in a row and then present them to our panel to react. So we'll start over here. It's very short. My name is Henning Tsirok, Society, Culture of Peace. I have a fundamental question. When we speak about growing, we have to make the difference. You can have a good life standard but a bad life quality. Though my question is, when we look to China picking, you can have a very high life standard. But if you have not the good air, it's nothing. Though the question goes to the podium. In Paris, the people decide it. We have to go out of this energy boil because they make a lot of problems. Though the question is, have we not to link the question of growing economy with the question, what is the link to life standard and life quality? Great, excellent. So I have that question. We'll take two more questions. The next question is over here. Yeah, my name is Alec Gagnu and I'm born here in this development country, Switzerland. And my question goes, of course, to Mr. Stiglitz. You talk now that we need growth. We need growth. And a country like Bhutan, for example, they say we don't want more growth, we want to have more happiness. So they have a more completely different way of scheduling and measuring the GDP is completely nuts because if you make a war, for example, USA is exporting 50% of GDP is weapons. So we know what the future, many young people are here. So they know what the future will be with these kind of decisions. If we just say we want to force growth, that means we destroy our environment and we destroy also the stability in the financial stability of the people because you can only have growth if the debt rate is going up. So my question is, can we have more growth or is it completely stupid? Shall we not follow the Bhutanese way? And the other questions to Mr. Stiglitz. Okay, well, we have- Can we not have an economy which is caring for the people and not for the rich people? Okay, we have your question. That's an important question and we'll take right here. Thank you. I'm from Rodan radio station from North Kurdistan. I'll speak German. So you best take your headsets. Let me repeat. My name is Alak Ahmad Hemken. I'm a journalist. Kurdish and work in the Iraq I work for a radio station. My question to you is, there are many countries that depend on the exporting of oil. Oil prices are very low now. You know that. How do you see the future of those countries? For instance, Kurdistan. I'm a Kurdish myself from the Iraq and Kurdistan is now fighting ISIL and the terrorist threat is a threat to the entire world not only to Syria or Kurdistan. Now in this country, if they are unable to export oil, how can they survive? And how do you see the chances of them to survive? Thank you. The question, thank you. That's the outlook for oil exporting countries and a question about the link to instability and terrorism that can be related. So we have three questions for you. The first two I think are directly related. They're the question of the quality of growth. Are we measuring the right thing when there are environmental impacts? Maybe happiness is a better growth measure. Professor Stiglitz, would you like to start? Sure, I chaired an international commission on the measurement of economic performance and social progress and it dealt precisely with those set of issues. And the work is continuing under the OECD on something called the high level expert group on the measurement of economic performance and social progress. I think the points that have been raised are absolutely right. GDP is not a good measure of economic performance. It's not a good measure of well-being. And it's important that we recognize that because what we measure affects what we do. And if we're measuring the wrong thing, we're gonna do the wrong thing. Bhutan's, I love their expression. They call it GNH rather than GDP. GNH is gross national happiness. There are several aspects. I can't go in the limited time. One of them is sustainability. If we have a planet that's being polluted to the point that our lives are at risk in Beijing and Delhi, you can't breathe the air, what good is it? It's actually shortening life expectancy. We talk about inequality. GDP in the United States has gone up every year except 2009, but most Americans, let me repeat, most Americans are worse off than they were a third of a century ago. The benefits have gone to the very top. And so at the bottom, the real wages adjusted for inflation are lower today than they were 60 years ago. So this is an economic system. No matter what you say about GDP, that's not working for most. So you're agreeing that it's the wrong measure? It is very much the wrong measure. And we have to revise it. And I could go on and, you know, when you're spending, I think the point about defense spending, security spending, are not increasing our well-being. And they are destroying the well-being of people in other places. So the expenses, the trillion, multi-trillion dollars that we spent on the war in Iraq did not increase either our security or our well-being. I want to turn to Mr. Arbosa, whose government stewardship of the economy is measured by GDP, among other things. How do you see that question? Well, I think for sure GDP is not the only variable to be the objective of economic policy, but coming from an emerging economy that still has per capita income that is a fourth of what you see in the rest of the world, increasing per capita incomes is still very important for emerging economies. Our challenge is to combine that with other objectives, because as someone said, you can increase per capita income and still increase inequality. So that's why decreasing inequalities is as important as raising the per capita GDP in emerging economies. I think this is a topic that is unavoidable in the 21st century, and that requires government action. I think what we have been seeing in the last 25 years, no doubt that the market economy is the best engine for growth. The market can produce a lot of productivity gains, the market can produce progress, but the market also produces too much inequality and too much volatility. And we have to find ways for the government to cope with that in a complete different environment in this 21st century, because we are now facing an ageing society that will require more government action, a different government action, but for sure some government action, and government coordination to face the issues of the environment, because in that area, we are all in the same boat. No individual initiative will be able to deal with the problem. So I think these are the top priorities and the challenges for the new role of the government in the 21st century. So we're gonna shift in a moment to what governments can do to catalyze growth more specifically. The third question that we were asked is, what is the outlook for oil producing nations over the time of very low oil prices? And in particular, are there implications for political and security stability, basically? Can I jump in? We'll put it in a broader context. There's a phenomenon called the natural resource curse, which emphasizes that countries with more natural resources on average have not done very well. We're here in a country Switzerland that does not have a lot of oil. It doesn't have a lot of other natural resource. Its most important resource are its people. And it's invested in those people, education. And so the answer is, you have to diversify your economy, not be as dependent on oil and natural resources, and strengthen your human resources. There is a view that I think for which there's considerable support, that actually not only is growth lower in natural resource economies, inequality is greater when it should be less, but conflict is also greater. And there is a view that if Saudi Arabia in Iran don't have any more money because the price of oil goes down to $5 a barrel, that's not a forecast. But if it goes down below where it is today, they are going to have to find ways of reaching better accommodation. They won't be able to, Saudi Arabia won't be able to fight some of the wars that it has been engaged in, and that there may be, the economic realities will maybe and hopefully lead them to a peaceful solution to some of the conflicts. So before we move on, I'd like to ask for another show of hands from the audience. I have a question for you. Excuse me, we're going to continue. You can ask later. Do you know, we'll get to that later. We need to keep moving. Thank you. So the question for the audience is, would you support greater government taxation and borrowing in order for the government to spend on infrastructure and in other ways to stimulate economic demand? So the question is, do you support greater taxation and borrowing by your government to invest in infrastructure and other ways to try and help the economy? So if you would support that, can you raise your hand right now? Okay, we have 15% maybe, 20% of the audience is in support of that. It's interesting. So we're going to turn now to what governments can do, that includes that and some other things. Mr. Thyshak, I'd like to start with you. Can you talk about what governments can do to catalyze economic growth, global growth, including the inclusive sort of growth that you and the others here have been talking about? I think the point made in respect to the question asked and the point made by Joseph, it's very true. An economy is an engine. And it's an engine that can provide the resources to invest in services for people. An economy is not an engine itself, it's about the people. This is the most important resource that Switzerland has or that any other country has. We've got some of the best demographics of Europe in terms of young people. And that's the next generation and that's where you've got to, they're out there in the system now. But what government have to do is manage its public finances prudently and carefully in the interest of the people. And the question you asked is one for decision by government afterwards. What proportion do you invest in infrastructure? What proportion do you invest in services for people, whether it be education or justice or health or whatever? There are all those demands on these things, which you can't do either unless you have a growth capacity to drive an economy that would provide that resource. And for me, obviously, inequality is a priority. But we have problems in many sectors ourselves. And yet I'm very optimistic that if you manage your public finances well, you manage your growth pattern well, it provides the resources for governments to make decisions in respect of these services that people need. We were in a position before of boom and bust as sort of growth weights went up, so did public spending. We've now devised a different economic strategy for the longer term. We'll manage that carefully and keep public spending below the inherent rate of growth, which allows for decisions to be made by government as to how much you spend on infrastructure or services. It's also about the taxation issues and how you can limit those in terms of better off people and those who earn more. So that at the lower end that you look after those who are on the minimum wage and at the lower end of taxation that you will have greater benefits there. And in our case, we cap benefits of any of these things at 70,000. So they're focused on people who are in the lower middle income who have to pay for everything. And as you say, pay 100% of their salaries for carrying on their lifestyles. And I think if you can translate that into a group impact from an entity as strong as the European Union, you don't need to have situations where you have 30% unemployment or 50% unemployment in terms of young people. These are opportunities that present themselves in a world that is changing so fast where we need all the young people to have the opportunity to do their thing. So what am I saying? That as a small country, a small entity, you've actually demonstrated that walking with people, you can actually make decisions that bring your country out of that mess, as it were, and that you look forward to that progress being continued and managed in their interests. And then you can make decisions that are deliberately targeted towards the marginalized or the lower paid or the workers, and you can limit the benefits of taxation for those who are in higher incomes such as we have done and are doing in Ireland. Great. Mr. Marabosa, from the perspective of Brazil, the same question. What can the government do and what should it be doing to catalyze economic growth? Well, for sure the government's on the economic side has a responsibility to keep macroeconomic stability because without stability, you don't have sustainable growth. But the stability can be achieved in many, many ways. There's not just one road to stability. You can have a sound fiscal policy with different sizes of the state. And this is a choice of the population. The population at the end of the day decides how much it wants to pay in terms of taxes and how much it demands from the state. So the question is to maintain macroeconomic stability, but the way you do that depends on what you want from the government. And I think for sure the last years, last decades, has shown that the government has an important role both in emerging and advanced economies in keeping inequality at a reasonable level. Obviously that means different things in different countries. In a country like Brazil where inequality is still very high, the government should enact to reduce inequality. Even in a more diverse scenario, the government should act to reduce inequality. But in other scenario, the challenge is more to maintain the policies that keep inequality at bay than to expand that. If you're talking about a more advanced economy that's already have a reduced inequality, then the situation is a little bit different. But there's another area which is very important. We're in the middle of a transformation of the world economy, both technological, demographical, political. And this is very intensive in government. And the government must lead the way and not necessarily be the main actor, but the government is a coordinator of all the efforts. It's specifically in emerging economies in the area of investment. There's a repressed demand for better investment infrastructure for large products. And those products can be done by the market. But given the uncertainty that some of these projects have, some government coordination regarding the risks, regarding the planning is inevitable. So this is, I think, the main challenge. Reducing inequality and have a development policies that stimulate the market to do things that it will not do without some government guarantees. So, Professor Stiglitz, so the participants today said that they would not, as a majority, support greater taxation or taking on debt to... You only asked one side of the vote, you didn't, most of them may have abstained, so I just want to make clear that. Okay, well, assuming a low abstention rate to that question, how do you react to that? Well, let me first say that the circumstances in each country are different, and that was the point that Nelson, you know, but in general, let me talk first about the United States and a little bit about Europe. In the United States, we have right now very low taxes. We have a regressive tax system. The people at the top pay, on average, 15% of their income in taxes, which is much lower than those lower down. In addition, we've under-invested in infrastructure for a very long time. Anybody who comes and visits New York knows what I'm talking about. Compare that to Beijing, that we have huge infrastructure gaps, which really weaken our overall economic performance. We can borrow in the United States, which is different from other countries, at minus 2% real interest rate. So you have huge economic returns and a negative cost of capital. It is foolish not to make those investments, even if it's by debt. It's foolish not to do it if you can put a tax on carbon that will generate a greener economy, raise revenue and allow you to invest whether it's in greater equality or in infrastructure. So to me, for the United States, it's very clear we should be doing both and the social returns are enormous. I think the same thing is true in most of the European countries. So it's more complicated because what you need in the Eurozone is common borrowing, like the Eurobond. And in the absence, if you have each individual, if each state had to borrow on its own, we would not be in the strength that we have. The final point I just want to make in terms of government investments, you mentioned investments in infrastructure, investments in people and promoting equality. Nelson mentioned the important investment of the role of the government in promoting structural transformation, which is absolutely essential in which markets don't do a very good job. But there's one more I want to mention, which is the role of the government in promoting technology, and as Sabji talked a lot here. You know, the private sector has been emphasizing its dynamic characteristics, but what is often forgotten that almost all those innovations are based on government-funded research. A beautiful book called The Entrepreneurial State that has documented how virtually all the important innovations that we've been benefiting from are really based on basic research done by government, whether it's in biotech area where it was DNA, whether it's the internet, even the browser was actually done by US government. So I think we have to understand that there's both a private and a public sector, but they can be complementary. That if you have the internet, it can open up enormous opportunities for the private sector. Ms. Shin, as the representative of the private sector, what do you think can be done to boost economic growth? You know, I come from a country where the government owns half of the economy. So it's a very different, we're talking about a very different role that the government plays. So for us, the government needs to do is to continuously to commit to its reforms, which really means is that reducing its role in the economy, reducing its size in the economy, and leaving it more to the private sector. So we're really talking a very different, I mean, so far China had a different issue. Like professor talked about the US government can borrow at almost no cost and should be building infrastructure. Whereas China has been the other way, which is the government is building enormous infrastructure. You know, wherever you go in China, whether there's no matter how small the city you would see roads are built, you know, airports are built. Most of the cities would have a opera houses. All that is built by the government and education completely free, all provided by the government. So we are actually, as a private citizen, always crying for government to do less, leaving more to the market. Can I just intervene there for a second? Yeah, just quickly. I'm not a Chinese citizen, so I can't. But let me say, as I look at China, and I've been going there since 1980, so the point that I see overall, the role of the government obviously is going to be diminished. But more than the overall size is what the government does. And when I look at China, among the major problems facing China are environment inequality. China has grown so rapidly since 1980, average of 10% a year. But China has achieved in 35 years as much inequality as it took America 200 years to create. So that's the other flip side. Third, they have financial instability. Markets create instability and there has to be some kind of a regulatory environment to deal with it. And one of the big challenges of China is it's becoming an urban environment. People have moved from the rural to the urban centers. And if you don't have good city planning, urban transportation, you will have unlivable cities as anybody who visits some of the cities realizes. So the point I'm making is that there is a real need for government, but it needs to focus on the problems that the private sector won't be able to solve. And that's quite different from where they are today. Great, thank you. So I have two more questions for you all. We're gonna focus on the role of technology for a few minutes with the panel and then we'll open the questions broadly to anyone. So my questions for you again, please raise your hand. Please raise your hand if you think that technology advances have a net positive effect on economic growth. So raise your hand if you think technology advances have a net positive effect on economic growth. Okay, that's about the most popular question we've had so far. Majority of people clearly believe that. I have a similar question. Please raise your hand if you think that technology advances have a net positive impact on employment, on job creation. So raise your hand now if you think that technology advances create jobs and strengthen employment. The smaller number. Okay, so about double the people thought that it helps economic growth as thought that it helped with job creation. So we're gonna go to the panel for a few more minutes on this question of the role of technology and growth and then we'll come back for your questions. I'm gonna start with you, Mr. Thyshak. So Ireland has done a remarkable job over the last few decades in attracting technology employers. What are your takeaways for the conditions and types of jobs that this leads to? Are you concerned that such jobs could evaporate with automation and competition from lower cost centers that are moving up the skills ladder? Yeah, in the case of Ireland, 40 years ago, 50 years ago, obviously before we joined the European Union there were inward looking, agri-focused backward economy. After joining Europe, all of that changed in the intervening 50 years have transformed our country. One of the issues there was that the United States many years ago because of the traditional drift because of economic reasons and so on for Irish people to go to the United States with a very big connection there, culturally, literally, socially, politically and so on. So when America decided to invest in Europe, they chose Ireland for the manufacture of hardware as a launching pad into the European market. They followed that then by saying, well, if you can make hardware, surely you can do it with software as well. So now you've got a thousand multinationals in the pharmaceutical area, biosciences, life sciences, all of these areas. And the engagement between colleges of technology, universities and business has created a cauldron of change and research and innovation. From our point of view, obviously, to get foreign direct investment into the country, you need particular principles. And in Ireland, the corporate tax rate was always 12.5% and is 12.5% and remains so. And that's across all sectors and across the entire country. And because of reputational damage being done, we got rid of the so-called double Irish concept, which is an issue of taxation that Joseph has often written about, and the stateless concept. And now we have a 12.5% corporate tax rate and we've introduced the first OECD, fully compliant knowledge patent, knowledge box, set at 6.25% for qualifying research and development. But that's the taxation end of it and it's attractive and it's competitive. But it's not the real reason that people really want to invest in the country. When you talk to them, the real reason is the talent pool, the creativity and the ingenuity and the imagination of young people that is changed. And it's the same for every country because you've got this capacity. So as a small country, we've been very flexible in the education system and they're in that system now, young people coming through. For instance, a voluntary movement started in Ireland called Kodo Dojo, the writing of code for computers. And this has taken off. Every weekend you have people who voluntarily teach young people how to write code that makes computers tick. This has gone international. So we have young scientists exhibitions running for the last 50 years, science festivals where young people, young people from 10 upwards or whatever compete school against school and bring forward these most wonderful advances in technology that impact and will impact on the lives of hundreds of millions of people in time to come. So I'm very optimistic about all of that because it's the places we haven't been in the technology sense that we're now going to be. It was in the European Space Agency in The Hague last week. And some of the things they're doing there are absolutely incredible. So from a technological point of view, just this morning down here looking at the latest drone which would fly above commercial airspace and would provide links for internet facilities for huge geographical areas that can't be reached at the moment with the quality, unless you dig the whole place up. All of these advances I think impact unemployment. And I would say this, in Ireland, where you had a hard manufacturing base with lines of people doing manufacturing, that's all been changed to robotics and technology. The employment in those places has not dropped. Because they've made new concepts, new products, new systems. So while you might think if you're going to automate a particular line that X number of people may go, well they may go from that line, but there's always another opportunity coming up. So I think the answer to the question, does technology impact on the economy? Yes, it does. Does it impact on employment? Yes, it does. Will it continue to do so? Yes, it will. Think of the world population growing to 10 billion by 2050. You've got to feed these people. Food security, innovation, climate change, all of these things are impacted upon in so many ways now by technology. Remote technology for health, checking on people who live alone, who live distances away. These things have all changed, and we need to change with them, and we do need to be afraid to embrace that change. Because for that future, it will mean millions of jobs and an impact on hundreds of millions of people across the globe in the next 50 to 100 years. Very optimistic about that. Okay, great. Mission, can I pull you in? Do you have any thoughts on the opportunity of digital, the role of digital technology in kick-starting growth? We are seeing right now in China, the most exciting area is the technology-driven innovation. We're seeing young people are getting out of the college and immediately starting their startups. The old days of you graduate from a good college and find a good job with a stable company, that seems to be half gone, because half of the students would actually want to start their own business. And the capital is there to support them. The whole society's mentality is such that it's so encouraging such activities. So I think that, you know, we're just seeing exciting things happening there. We've recently started a new business which is inside our office building. We create a co-working space, sharing office space. So these, we call the SOHO 3Q. You can just come in with your computer and you walk into this kind of like a Starbucks-style office space and you meet other startups. So then every day we create a little event for each one of them to talk about their own products. So often I walk in, I see these incredibly young and vibrant companies, very often they're like two, three people started and they have new products like, you know, you can talk about Robox and Drones and all very exciting. And just that is obviously still at the beginning, it's still at its infant state. But you can see these companies, if only just 10% of them will grow into a sizable company, it will have a huge impact of the society. Great, thank you. So we're gonna shift now, we're gonna pause and we're gonna take your questions. We still have a bit of time. Okay, go ahead. Okay, so I just wanna, these innovations are really very exciting. I just wanna put a little damper putting, looking at this from a macroeconomic point of view. The evidence is, you know, as badly measured as GDP is, and we talked about in the beginning, the fact is that in spite of all these great ideas, the rate of growth of productivity is actually slowed down. And we know that a hundred and some years ago, when we went, you know, I had the automobiles and all those exciting innovations, we did succeed in creating new jobs. You know, we lost old jobs, new jobs were created. There is no theory or no, that will be happened again as smoothly. So this comes back to your previous discussion on the role of government. It can happen if we have enough stimulus from the economy. If those who lose jobs can move into new jobs and that would require aggregate demand. And we need it, we need to retrofit the global economy for global warming. So we have ample opportunity, but the problem is without the government, it won't happen on its own. Okay, Mr. Minister. Just complimenting what Joe said. As he said, the fastest growing productivity happened during the period where we also witnessed a reduction in inequality during the third quarter of the 20th century. So the two things do not inevitably clash. You can have an increase in productivity then at the same time a reduction in inequality and an increase in employment. And the key to do that is to have the right institutions to distribute the productivity gains in a way that generates more job opportunities, that generates better qualification for the labor force to reap the benefits of this new technology. Great. Okay, I think they're ready for your questions now. So we have a few minutes. Please raise your hand and we'll get you a microphone. I'd ask you again to introduce yourself and please keep your questions brief so we have time to answer as many as possible. Where do we have microphones? Okay, in the way back there, I think we have a microphone. Okay, thank you. My name is Primo Oshin Flood and I just wanted to ask, what's your opinion on investing in third world countries? So you could, like education wise, so in long term you could invest more in these third world countries and get their economy to grow. And with that you could also outsource your factories and focus more on the service sector so it would increase the living standard in first world countries and then also increase the living standard in third world countries because industry is still better than nothing. Okay, great. I think we'll take these, we'll answer these questions as we go. Does anyone want to quickly respond to that? We'll take more than one. Well, you can reply if you want. Well, for sure, I think this is a win-win game. The development of the emerging economies of the third world, as you name it, is good for the world economy. I think there's a frontier of expansion, if you will, in reducing inequality, creating a middle class in more poor countries that will create markets for everybody and also will have positive effects not only in the countries affected by that, but also in advanced economies. The key to do that is actually to deal with the risk of these investments because opportunities are there, the repressed demand are there, but there is still too risky for the usual financial standards. And one of the challenges that we face is to have the right financial engineering to bear their risk, to distribute their risk and then to make these opportunities to transform that in concrete investments. Great. Okay, let's keep going with questions. Right here, one of those. Thank you. Yeah, thank you. Heike Hinsel from Germany, German parliament. I would like to refer to your question concerning taxation, greater taxation, because it's not only about greater taxation, but we have to speak about taxation at all. If you see, we are facing a lot of tax avoidance, tax evasion. We have organized tax evasion in Europe, for example, and throughout the whole world. So the South, for example, every year loses more, up to $200 billion from South to North. That's a big problem. And you know, it's the taxation of the big companies, the multinationals, and all these CEOs are meeting here in the World Economic Forum. So my question is, do you confront them? Because there was the initiative last year of the Global Thousand to install an intergovernmental tax body at the United Nations. The rich countries voted against this initiative. So if we don't tax the rich, the inequality is rising, rising and rising. Now 62 persons have more belongings than half of the world. This we have to address. And I would like to hear some answers concerning this social inequality and tax evasion, thank you. Tax enforcement, OK. Yeah, can I just say, I agree with you 100%. I'm on an international commission that has been looking at precisely this kind of tax avoidance and tax evasion. It's the global tax structure. It's the tax, what we call the transfer price system that opens up the door for this kind of tax avoiding activities at a massive level. And you're right, at Addis Ababa, there was this big UN meeting on finance for development. And one of the things that we said was the most important social responsibility of the multinationals are talking about social responsibility. The most important social responsibility is to pay your taxes. And not avoiding and evading tax responsibility. Apple in the United States has become the poster child of using ingenuity to take advantage of these loopholes. And we had a very big effort to try to have a UN movement to address this issue. The view that we had was that the countries from which the tax avoiders were coming, like Apple, those governments should not be deciding how to structure a tax regime, because they will structure a tax regime that benefits their companies and not benefits the entire world. But the United States, unfortunately, supported by several of the European countries, argued that the tax avoiders and evaders should get together and write the rules so they could continue their tax evasion. So I was very disappointed with my own government on this. India was the leader of the developing and emerging markets, very forcefully arguing that there ought to be an international effort headed by the UN to deal with this. Mr. Thiesach, do you want to add anything? Well, let me just say that in respect to that, let me be very clear that Ireland was a case of point where Apple have been mentioned. Apple employ 5,000 people in Ireland. They pay their taxes. There are no special deals done with any company by our revenue commissioners over the years. And that's a case, obviously. That's the European Commission now looking at, not just in the case of Ireland, but in other countries as well. But obviously, the European Council consider this. The OECD have carried out their BEPS analysis and base erosion of profit shifting. And from one country, we've been very much forthright and up for that, because clearly, the taxation system, the legal systems, are very far behind the digital systems. So we don't do brass plate companies in our country. So you have a place where they can Apple employ 5,000 people who go to work every day. Obviously, if you manufacture something there, you sell it in France or Italy, the intellectual property is vested elsewhere. These are the complexities and the challenges that are there. But I just want to make it clear that from our point of view, we defend 100% the authenticity of the way we do business with international companies. And there was a lot of talk, as you know, Joe, in the United States about Ireland being a tax haven, which was completely false, baseless and untrue, and has been dealt with very clearly. And that's why in budgets we got rid of reputational perceptions with the double Irish concept and the stateless concept, and have it absolutely above board and out front for everybody. So just to make that point. Okay, thank you. So we have a few more minutes for questions. We're gonna go on this side here. Thank you. My name is Thomas Julian from Germany. Given that the digital revolution is underway, bringing with it lots of risk and fears, what should governments do within the next two, three years to ensure that the digital revolution is actually improving social well-being? What can and should be done within the next two to three years? Next two to three years, what should governments do in terms of digital technology, ensuring, I'm probably about this transition we've been talking about. Yeah, I'll just answer one little part of that, which is there will be job displacement. And one needs active labor market policies to help people move from the jobs that they're losing to the new jobs. And some countries have done that very well. But if you're gonna move from the jobs that are being destroyed to new jobs, there have to be new jobs. And that's where macroeconomic frameworks of ensuring full employment becomes absolutely essential. If you have a Europe where the average unemployment rate is 12%, the average youth unemployment rate is 25%, you're not gonna, no matter how good your active labor market policies are, they're not gonna really succeed in making that a smooth transition. Yeah. Okay, let's take some more questions. We'll take that question right there and come to the side after. Thank you. Winfried Weigl, CleanTech Capital, I want to come back to the topic of the panel. Isn't a decreasing oil price a big boost or should it be a big boost for the economy? Except of course for oil producing company or oil producing countries. And Mr. Barbosa, Filou, what is your concept for your country to lead South America out of a recessionary environment? Do you wanna start with the first question? Well, that's the second one. Well, first of all, Brazil's largest economy in South America and it obviously plays a big role in there. We are now dealing with a lot of domestic issues but the way to help not only ourselves but the region is to have a recovery led by investment. Brazil has a very low investment rate compared to other emerging economies and our main task is to increase our investment and this requires not only more macroeconomic stability but especially more active role of the government to coordinate this large project of investment and to build more on integration. Now we have the new administration in Argentina. The trade flows between the two countries seems to be improving. Now we have a more flexible exchange rates between both of them. And I think this can build up a case of success and improve the bilateral relationships between the two main economies in South America which will have spillover effects throughout the region. And Professor Stiglitz, you sort of answered the first question which is what is the net impact of lower energy prices? Can you quickly summarize it again? Well the real point is exactly what you said. There are winners and the losers. In dollar terms, they're exactly equal because it's, and the real question is do the winners increase their spending as much as the losers decrease their spending and in the current context, given the magnitude of the change, it looks like the decrease in the spending of the losers is going to be greater than the increase in the spending of the winners. You're seeing that very visibly in the United States for instance, where we produce oil, net we import oil and gas, but the point is that the cutbacks in investment in the hydrocarbon have far exceeded the increasing spending from the fact that gasoline is cheaper. So the net effect has been negative at this juncture. Okay, great. We have time for one question and we're gonna take the question right in the front here. Thank you. Hi, good afternoon. I'm from Irish media, Suzanne Lynch from the Irish Times. And I have a question for Professor Stiglitz. Just in relation to the Irish economy, you have written extensively criticizing austerity policies talking about the dismal failure of austerity in European countries. So how do you explain the situation in Ireland? Obviously the country had to implement a very strict austerity program and now it's emerged back into economic growth and it is the fastest growing economy in the European Union. How do you explain that? And do you see any dangers for the Irish economy as it enters that new phase? Well, first of all, when you talk about and you're evaluating a policy like that, when asked to ask, every downturn eventually comes to an end. And the real question in judging it is how long is the downturn? How deep? How many broken bones in the process? So what is still clear, true, Ireland, I'm pretty sure, even with your 7% growth, GDP per capita is lower than it was in 2007 and 2008. So it's not yet, I wouldn't call it victory yet. You've turned the corner, which is great. And I gotta commend you for that. But there's still, you're looking for a lost decade in terms of when people say, where was the economy in 2008 and 2018? And they'll say, there was no growth or very low growth over that interval. When you look at the other countries, though, I mean, as I tell my students, you always grade on a curve. Among the countries that had austerity, you did the best. And there are lots of reasons for this, and we could go into that. But I think you ought to put it in perspective of what happened in the other countries and the other countries had depressions. And when you call it depression, 50%, 60% youth unemployment, 25% overall unemployment. In Spain, they're also declaring victory because unemployment has come down from 25 to 22%. Now, when I look at an economy where there's 22% unemployment and 50% youth unemployment, and by the way, the only reason the youth unemployment is so low is a lot of people have taken advantage of the free mobility in Europe and gone to the places where there are jobs. For the families, we were talking before about GNH, the families are not very happy. The fact that they won't be able to see their grandchildren, they'll get married and they'll settle down in other countries. It's something that Ireland knows about because over a long period of time, families were broken apart by migration. So it helps the unemployment numbers but the splitting of families and what it's done to the people in Portugal, Greece, and Spain is a disaster. So I think as I look at these policies, the question I always ask is, was there an alternative policy? And would you have been better off if the ECB had not forced you to take on some of the debt and from the private onto the public? My view, obviously correct answer to that is you would have been better off if you didn't have that debt. You would have been better off if you had had the assistance for a growth policy rather than on austerity policy. So given the constraints, you did well. I don't want to turn this into an Irish debate but just let me say that we're looking at the future now. We've actually set out a longer term economic strategy here to manage this for the future, create a further 200,000 jobs by 2020 and among that to bring back 70,000 of those people, Joseph, that you mentioned who can come back to a country where they're gonna get a good job with a lowering rate of personal taxation to be able to compete with other lower personal income tax countries to deal with that very issue. And I'm gonna just say we're not declaring any victory here. We're reporting progress and we're reporting the management of that progress for the future and the people's interests. Great. We're gonna stop the questions there. So just to quickly summarize on the discussion today, there's a high degree of concern about the direction of the global economy. We have panelists today who I think for the most part we have to check with Professor Stiglitz have chosen to be optimistic about the direction of the global economy. How are you an optimist on this? No. Okay. For the record, he's not an optimist. I'm not running for office and I don't have any public office so I can take a different view. So the consensus, the participants here in general were very against increased taxation for investment in economic growth, which is interesting. And the role of technology as both among the participants and our panelists seems to be a net positive role as long as governments are managing the transition and the structural things that changes that that brings for employment. So we're gonna stop here. I wanna thank you. Join me in thanking this incredible panel that we've had here. Ms. Shin, Professor Stiglitz with her Seesaw and Mr. Minister. We'd like to thank you all also for participating. It's been an excellent discussion. Thank you.