 I suspect that we have the instruction not to try to delay at the end of our meeting. So I take it that we try to terminate this exchange of views around 7.30, something like that, if it is agreeable. We will see how it works. And I am also extremely happy that you have accepted to be the rapporteur. So we all count on you because the experience demonstrates that our exchange of views are always extremely diverse and they are covering a lot of terrain and it's very multi-dimensional. So for those who have already participated in this seminar, I should not introduce the speakers but there are those who have not participated in such a seminar. And I thank very, very much all those who have accepted to speak and have accepted also our rule of the game, which would be to speak in concentrating the messages in five minutes in order to multiply the exchange of views, the questions and the dialogue and why not the quarrels from time to time. Let me just say a word on precisely those who will intervene. Mazud Ahmed on my left is president of the Center for Global Development and he has been extraordinarily influential in the Brighton Wood Institution, IMF and World Bank and IMF. I would say that I see Mazud as you do in all intellectual and economic colloquium and thank you so much Mazud for having accepted to be here. Bertrand in my right will be the second speaker, associate Gérant and founder and I will say leader of Blue Like and Orange Sustainable Capital. He was very instrumental as general director and financial director of the World Bank Group. Then we have Akina Rihori, we know him also extremely well, special advisor and member of the board of the Canon Institute for Global Studies. Also member, I mentioned that in passant of the Trilateral Commission. Thank you very much Akina Rihori for being with us. Pierre Jaquet is professor of economy at the National School of Bridges. Shall I say that? Ponce et chaussée? Oui, oui, oui. Very famous Ponce et chaussée. And he was also president during 10 years of the Global Development Network. So thank you very much Pierre for being with us. André Lévi-Lang, again I'm mentioning the speakers in the order of the speeches. André, you are founder and very instrumental I have to say of the institute. Louis Bachelier, without you there would be no institute Louis Bachelier. And Bachelier you know of course is a very powerful French mathematician who had the first idea of introducing math in the stock exchanges. And he was rediscovered late in the first century. But appear to be the real, I would say intellectual that more or less paved the way for all the financial mathematics. And you were CEO of Paribas Bank which of course everybody knows. John Lipsky is also present everywhere in the world I have to say from time to time I'm thinking he has le don du bequité as we say in French, the capacity to be in all places at the same moment. So when you don't see him in Shanghai it is because he's in Beijing and when you trust that you see him here he's also together. I don't know where John Washington, I mean you're amazing. So thank you very much for having accepted. I mentioned that you were first deputy MD of the IMF and acting MD of the IMF. And Jean-Claude Meier was chairman international Rothschild and company but also previous MD of Lazare, no it's not exactly that. And you are blessing us with your remarks on the financial markets often obviously here. So I don't want to take too much, it would be very bad for me to take too much of your time because you have to stick to the five minutes. I would only say that as regards what you have to say you're the masters. And I count on you to ship to mention and float three, four messages that would be very strong and would permit to start really the discussion. I was listing myself what we could say and I saw 12 issues that are of great interest and I don't want to list them because I don't want to take again too much of our time. But I see of course in the economy in general a lot of things to be said on risks, global financial risks I see that we are in an inflection point it seems to me in many many respects and not only inflation, not only I would say climate change but that it is really frankly speaking very very dramatic as far as the change is concerned. I see some positives I noted five, four or five positives maybe we could introduce the positive because I suspect that the negatives would probably dominate and I could list seven negatives and I take it that they have to be taken very very seriously because experience has demonstrated that we should be as resilient as possible and ready and stand ready for any kind of unexpected new events. And we have during the last period of time a lot of events that were absolutely dramatic and were totally unexpected. Generally they came at a moment where everybody is very quiet and calm and we say we have solved all problems and now it is the very calm and quiet waters. Nobody says that today which is a little bit reassuring so we are all supposed to prepare for these unexpected events that can come and anytime I don't think personally that the system, the global financial system is really stable at the present moment and not only because we have of course at the horizon all the so-called geo-strategic risks that we are mentioning in the conference and of course have a fantastic impact on global finance. All that being said I will without further ado give the floor to Mazem. Thank you very much Jean-Claude. What I would like to do is, well this is a very broad topic so let me focus on the issue of financing for emerging markets and developing countries and let me offer you two propositions which I am not sure everybody would agree but I want to offer them in that spirit. First is that as you know we just after Marrakesh and the whole of last year's efforts is a broad consensus that you need to scale up financing for emerging markets and developing countries in part to continue to meet their own ongoing development needs but also to enable them to deal with climate change both in terms of adaptation and in terms of their contribution to mitigating the level of emissions going forward and there are various numbers that float around there may be three times larger by the end of this decade and they are also being asked to mobilize much more private financing to go with that as part of their mandate. So let me say two specific things in that regard. First thing I would say is that the conversation about financing the climate related part of emerging markets needs is quite confused because we think of climate as being both mitigation and adaptation but in my mind they are very different strategies needed for that. Contribution is just building into good development of schools, of roads, of hospitals, the extra cost of making them resilient to climate that applies to everybody rich and poor, low income countries, middle income countries and this should just become part of the mainstream of good development strategies. On the other hand mitigation which is the contribution that will come from the policies developing countries adopt that will have a global impact is really only about a dozen countries, a dozen emerging markets. What the vast majority of countries in Africa do will have no impact of any measurable quantity on global emissions and therefore the only sensible way to allocate the financing for mitigation is to target the dozen or so countries whose actions will have an appreciable impact on global emissions but the MTB system is very difficult for them to be able to do this kind of targeting and the real risk is that we will end up spreading mitigation financing all over the world with very limited impact on global emissions and therefore waste some of that money. So what my first proposition is that we should think very separately about how to support adaptation which should be across the board and for mitigation we need to adopt an approach which maximizes the emissions impact globally rather than thinking of this as a sort of add-on for every country. The second point I want to make is that there is a expectation that now the multinational development banks, regional development banks will be successful in mobilizing much more private financing than they have ever done in the past. They have singularly failed to be able to do this. They set targets but almost never are able to meet them and now they are being asked to do so with new instruments and a new willingness to do that and the reason they are being asked to do that is because even if you multiply multilateral development banks own lending by three or by four, it's just not enough. You have to bring in private capital because that's where the financing is and people use numbers that become so large that they're not very meaningful. You can easily talk about hundreds of trillions of dollars that are sitting there waiting to be mobilized but if you look at what's actually being mobilized, it's in a few tens or low hundreds of billions over some time. Now my contention is that you can keep adding instruments and you can keep adding new initiatives but the real problem why the multilateral development banks are not able to mobilize private financing is because they have a culture of risk aversion. So they're really not able to take on any of the risk that comes from doing things differently rather than just taking loans and putting them on their own books. And if you talk to anybody who is a private sector investor, actually there are some here who talk to the multilateral development banks, they will tell you horror stories of how the culture of risk aversion makes it impossible to mobilize additional financing. And this culture of risk aversion comes partly from within but it also comes from the instructions that they receive from their shareholders who at the ministerial level make proclamations about how they should be more risk tolerant, they need to go out and do these things but by the time they those instructions filter down through the bureaucracy in each of those national systems to the directors who represent the same shareholders sitting on the boards of these institutions it becomes quite diluted and then translated into don't take risks. And with that we can spend many years trying to come up with numbers and plans but unless we tackle the risk aversion issue in my view we are not going to get very far in mobilizing private finance. So I would say that's the second point of what to make. Let me just end by making a small side point which is the risk aversion problem affects the multilateral development banks but it also affects almost every public sector institution that's the nature of public sector institutions is that they are penalized for making mistakes but they're not rewarded for making returns. And in some ways if you look at the IMF and John and I were both at the IMF for many years if you look at the IMF we are saying to the IMF that it needs to play a much stronger role as part of a global safety net financial safety net in a world where there are going to be many more shocks but again the design of those safety nets by the IMF runs the risk of being designed in a way that is so conservative that almost none of the potential beneficiaries of the safety net will be able to use it. And so like many of the problems that you would see is that the same approach to dealing with this obsession with risk aversion has to go across the street and into other financial institutions as well. So let me stop with that. Thank you Massoud. You were clear crystal clear and extraordinary concise but with real issues and I'm sure that we will have first echo of some of the real issues you mentioned with Bertrand who has been in the World Bank and is in the private sector. Yes so with some people around the table I could also share some oral stories as Massoud tried to incentivize me to go but I will try to resist that temptation. Let me start with celebrating a good memory. 200 years ago in 2015 the entire world agreed on a new roadmap for economy. We called it sustainable development. We added the Paris Accord in December and previously to that we had the partnership for development sign in Addis. So in 2015 we agreed that the economy should be more resilient, more inclusive and more sustainable. And everybody agreed. Everybody signed. All our governments are part of this roadmap. I remember at that time one of the question I raised was it's great to agree on objectives how do we pay for this? How much does it cost and who is going to foot the bill? And one of my contribution was the report from billions to trillions. Here we are eight years later we are both totally off track and at a turning point. The number of billions available is let me optimistic still the same and the number of trillions needed has grown precisely because we are off track. On top of that I mean we've discussed that yesterday and this morning we are facing centrifugal forces wherever we look. You call it poly crisis, permacrisis. You have the geopolitical issues, economic tensions, the financial change of paradigm, the raise of interest rates, inflation, social, AI, etc., which basically move a number of people to look inward and not outward. And I think it is a very important issue. People are less and less interested by the rest of the world. And to a certain extent I have sympathy for that approach. And so you see the results in a number of big gatherings, be it the G20, be it the BRICS, be it the discussion around the loss and damage. So last year we celebrated as a success the creation of a loss and damage fund. And last week or two weeks ago people say, well it's going to be difficult and we don't want the World Bank to be in charge because the World Bank is American. So that's a reality. I mean we are facing a global gap. So people now are playing the global south against the global north or the global west. And the tensions, the tensions abound. I was sharing with Jean-Michel over lunch a quote from Marguerite Ursuna, some of you might know her. She was a Belgian writer. Actually she lived and died in the U.S. And she wrote a book called The Memoirs of Adrien. So she put herself in the shoes of the Emperor Adrien, aging in his villa north of Rome and reflecting on Rome and the fall of Rome. And he said, I know that the fall of Rome will arrive. How can I delay that moment where the barbarians outside and the slaves inside will rush onto a world which we ask them to respect from far or to serve from below? And then he adds, but I would like them to love Rome. And I think I mean it has some echo with the situation we are facing today. And so we are facing this tension. And it has, it has an impact on what Massoud described. So we are facing challenges. The roadmap we agreed in 2015 requires trillions. I mean it looks a little bit surreal to add trillions to trillions. And we have to find these trillions in a world where market conditions have changed. And I think a number of the speakers will discuss these market conditions. They are not helpful. Where the policy mix is changing as well. Fiscal stress, the role of monetary policy has changed. And when the governance, the global governance is more and more fragmented. So in a nutshell, private flows are diminishing. They are minuscule and they are diminishing. It's less than 4% of European AUM which goes to emerging market, less than 2% of American AUM. So it's very small. It's diminishing for a number of very rational reasons, interest rates. When you're a small mutual insurance company, why would you want to take a risk in RDC or in Morocco if you can get 5% on U.S. Treasury? It's pretty straightforward. Second, industrial policy. The Green Deal and IRAs are required to mobilize local savings. So here again, the French government example, put money in the French tech. Put money in this. Put money in this. So there's nobody left for the rest of the world. Everybody's doing the same. And on top of that, as I said, the inward-looking perspective of a number of clients, I mean, I've heard pension funds and people telling me, my clients don't want their money to be used elsewhere. We have enough problem at home. Why would you move my money to help these people? Whereas in my country, we have also suburban issues. We have also transition issues, et cetera. So private money is under stress. And on top of that, of course, Basel 2, Basel 3 and Solvency 2 and the rest don't help or provide good excuse not to do anything. Public flows are under stress. In real terms, the flows to Africa have diminished. And there are a number of reasons for that. I mean, fiscal stress, but also Ukraine, refugees, and the likes. So money is not going there. And you have the tension that Masoud highlighted on the one end development on the other climate with the same pot of money. So you're adding a number of priorities with the same pot of money. So all this was solved in Paris with the summit on the Global Financing Pact. If you remember, there was a joint op-ed by Biden, Macron, Sunak, Ramaphosa, 13 or 15 out of state, which basically says it all, a green transition that leaves no one behind. Hallelujah. So that's exactly what we should aim at. But the reality is far beyond the headline. How do we get there? And on top of that, we are adding to the equation norms and standards. I mean, let me call it ESG. I'm a fan of this. But the reality is that we're imposing this on the rest of the world. I wouldn't want Europe to become Bobo Land. You know that to impose on the rest of the world a number of very nice expectations which don't fit the capacity of a number of countries. So let me conclude with that. I think we really have to really shift the needle. We have to, first of all, recognize the issue that was the benefit of the Paris summit. It put the issue on the table. There is a divide between the south and the north. There are real reasons for this divide. There are financing problems. We have a lack of money and we have a multiplication of objectives. And we have very few places where we can do this properly, including, as Masoud said, within the MDV international system, which is less and less fit for purpose, very unfortunately. So it's very difficult to follow. And that's because the issue will be handled if we are able to join forces. And of course, it's easier said than done. Join forces meaning that the countries, the receiving countries, should do something. That the MDV and DFI should also change the way they handle things. That we address a number of the normative issues, which, of course, in a universe where risk is the name of the game, people are less tempted to do. So good luck to the people who want to change the world. And we have to mobilize investors. So it seems that it's quite difficult. And the big issue, and I conclude with that, Masoud said, I said, and we said that we need to increase the money in the system. That was a billions to trillions equation. I think it's still valid. We need to put more money. But maybe more importantly, we need to add a new chapter, which will be from trillions to millions. Even if hypothetically we got the trillions, I don't think we would be able to use this money. And I'm very serious about this. And you see that with the EU plan. I mean, we are supposed to have 800 billion. I mean, the big chunk of this million cannot be spent. So that's the issue today. I think we are facing a fantastic, I mean, dramatic and fantastic situation. And we really have to revise our operating system fast. If not, we'd gather next year and it's going to be even more problematic. Thank you. Thank you very much indeed Bertrand. I don't want you to react. I was looking for your criticism of the promises that were simple promises with figures and were not at all respected, the 100 billion. But for instance, for instance, it is a catastrophe. That's one of the many promises. Everywhere I go, they don't speak of trillions. They say no, you said you would ship 100 billion and we saw nothing. Anyway, Akinauri, it's your turn. Thank you. Two previous speakers discussed development finance, but I think I'm going to speak about world economy, I mean, thrust of your paper. Let me begin with the US economy. I hope you remember that I was optimistic about prospect for US economic slowdown a year ago. I continue to be optimistic. And the US economy is now at a full employment. On top of this, the fiscal policy stimulus that has been incorporated in the Inflation Reduction Act, strange name, but and chips act is materializing in terms of expansion and business investment in the US. The stimulative tax effect will continue in 2024 and beyond. 2024 is of course a presidential election year under the split Congress. So there will be no new fiscal initiatives. But there continues to be stimulative effects of the past legislation. In light of both the flow employment at present and fiscal stimulus in the pipeline, I think the Federal Reserve will be cautious about monetary easing. They may begin to lower the federal fund rate target in 2024, of course, but perhaps only to the extent consistent with increases in the unemployment rate. In other words, no preemptive easing but cautious easing or measured pace easing is likely. As long as fiscal policy is expansionary and monetary policy cautious, that means high IS curve, investment savings curve and high liquidity curve, LM curve in terms of Mandel Flaming's framework. Economic growth will continue with relatively high real interest rates and the strong US dollar on exchange markets. Stock prices will fluctuate perhaps within a range where monetary tightness, relative tightness puts a lid on price earning ratio and economic growth supports return on equity. Okay, let me segue to the Chinese economy. We all know that the Chinese economy is under a few structural adjustment pressures. For example, burst of property bubbles and debt overhang, communist policy of tightening grips with business, actually more widely over civil society in general, which is stifling, stifling entrepreneurship in China. And lastly, an unfavorable demography. At the same time, China's economic slowdown has been accentuated by the so-called Silicon cycle, which goes up with IT related production in the global market for two years and goes down for two years on average. 2023 was a declining period and now the cycle seems to be hitting the bottom. We heard the same story in previous sessions by semiconductor experts, actually. Just like Japan experienced cyclical ups and downs during the first decade after the burst of property and stock bubbles, the Chinese economy will also show cyclical ups and downs even when structural adjustment pressures put a damper on its trend growth. In 2024, the Silicon cycle will turn favorable for China's economic growth from a cyclical viewpoint. It is also the case for Korea and other Asian economies, as well as Germany, all of which, you know, manufacturing is a key industry, therefore sensitive to the Silicon cycle. With respect to finance, I have a lot to say, but perhaps I would come back if you're interested in the for the following session. And also, many people are interested in the similarity and differences between Chinese burst of the bubble now and the burst of the bubble in Japan in the 1990s. But I defer the discussion also at a later stage. Open up for a lot of questions to you, if I understand. If you are interested. Thank you very much. Can I add to all what you say, which is absolutely true, that the U.S. prosperity, apparent prosperity is really based also on a bigger account deficit? And the difference between Europe and the U.S. is based partially, it seems to me, on the overall use of that, of course, policy mix, which is much more expensive in the U.S. than in Europe, also including the fact that the depressive effect of the war in Ukraine is hitting the European significantly. But the open under the circumstances are more or less, I'm speaking under the control of the IMF persons, but more or less balanced or with a slight surplus when the U.S. is still permanently, if I may, in deficit. But there is also for questions, possible questions, the demographic issue in the long run of China, which looks a little bit like the Japanese, but much worse when I look at the figure, I think it's absolutely terrifying because you didn't have a period where there was a one child per household in Japan. But the price to be paid for this policy in China looks very, very big. But thank you very much for your concise speech, if I may, and for reserving the case for responding to questions. I think the next speaker who is in the order of our... Pierre Jaquet. So Pierre, you have the floor. Thank you. Thank you, Jean-Claude. Let me focus on another pathology of the international financial system, which actually creates a bridge between what Bertrand and I are saying, that there is a lack of money going to developing countries right now, and the fact that a few years ago there was a lot of money going to developing countries. And the bridge is called debt. And I think that this pathology of the international system is the risk of emergence of a new debt crisis with considerable impact, especially for countries in Africa, but not only. And the situation is a bit similar to the 1980s. We had an influx of money into these countries, and that corresponded to the recycling of excess liquidity in rich countries in search of higher potential returns. And then we had a number of shocks, and of course the shocks are COVID, the slowdown, the economic slowdown in developed countries, inflation, rising uncertainties, drying up of new funds, depreciation of currencies against the dollar, and so on. So as a result, the burden of the debt service, which is still lower than historical records, has significantly increased, especially in sub-Saharan Africa, again not only, and in Latin America. Let me also mention the net transfers to IDA countries, that is, the net financing inflows minus the debt service have turned negative in the face of needs to, and that happens in the face of rising needs to engage in two strategies of green growth strategies, to fund the energy transition, to reach the SDGs, and so on. Right now about 30 countries or more are considered to be in a high risk of debt distress. Second point, there are three differences with the earlier debt problems. One is that the much of this debt is now held by the private sector, private sector, and multilateral institutions, but the big new thing is the private sector, the whole other private sector. And that has been a major tendency in the evolution of debt, and I'll come back later to the implications of that. The second which is linked to it, this much of it, is a shift from loans to bonds. With an interesting fact, which is bonds do not carry the same risk of systemic event than loans. And therefore, when there is a problem, the incentives to act is even lower, and then we all know that the incentives to solve debt problems has always been quite weak. It's even weaker when you have bonds, because bonds are a private thing, not a collective issue. So that's one of the difficulties. And the third difference is the considerable rise in non-DAC creditors, especially China. In Sub-Saharan Africa, China now holds close to 60% of bilateral public and publicly-guaranteed debt. And China has become the first bilateral creditor of developing countries. The implications are mounting obstacles to prompt an effective resolution of debt crisis. And we see that every day we take commitments, we have nice frameworks, but implementing those frameworks has become increasingly difficult. So ineffective crisis resolution. My third and final point is that we are again addressing this debt issue in a crisis resolution mode. As I said, as I argued, this crisis resolution mode is not effective. It's very slow. But again, we are doing what we did in the past. We have a crisis. We try to solve it. It takes too long, but in the end we will do something. I think it is time to move to more crisis anticipation. It's not really prevention, but the idea that we should prepare for the next crisis. This is the nature of capitalist financial flows, the excesses followed by excessive disillusion. It's always been the case, and we have not been able to integrate that in the approaches, strategies, and instruments. So I would suggest that there needs to be more thinking about how to make ex-ante debt restricting mechanism more automatic. It is complex. It requires to distinguish between proper and improper use of borrowed funds. It requires to distinguish between liquidity crisis and solvency crisis. But I think the risk, the risk of debt distress in the face of exogenous shocks need to be endogenized. There are, I think, many ways to do it. One is to go back to the proposal made by Anne Krueger a long time ago to create a sovereign debt restricting mechanism, the SDRM, which never floated very far, but I think it's a very important idea and suggestion. It could be endogenized in debt contract. It could be also endogenized through contingent debt instruments, and I think that's one aspect of financial innovation that could be quite promising. So my point is that the time has come to spend energy on a more lasting debt management framework, which is today really lacking. Thank you. Thank you very, very much, Pierre. You're absolutely right in mentioning the fact that China is not members of the Paris Club, and that as far as governments are concerned, it's an enormous hole in the system, and I cannot resist to hope that China will understand at a certain moment that it is time to join some kind of, I would say, global mechanism. I'm a little bit more skeptical on Anne Krueger proposal, but we will discuss that. I don't open any discussion. I turn to the next speaker because I see that John is ready to defeat André as the floor. Yes, thank you. In his introductory notes, Jean-Claude mentioned about the embedded negative risks for the financial system. Number five was cryptocurrencies. So I thought I might make a comment on financial innovation in general and its impact on finance. We're starting with cryptocurrencies. Looking at the numbers, they are not a systemic risk. The numbers look huge. Actually, it's about roughly 1,000 billion, so 1 trillion euros. That sounds like a huge number. Roughly one half is Bitcoin, one half is the other cryptocurrencies, if ether and so on. But if you look at that number, it's only half the balance sheet of BNP Paribas. So, well, yes, I checked the number. So it's not a systemic risk. So it is a different kind of risk, of course, because of fraud, the mafia, and all this. It's speculators' money, basically. It's not money, by the way, because it's not a payment system. Actually, it's not really as secret as people think, because if you want to spend it, the only way to do it is to go to a broker and get dollars or euros, right? So then you get into the system. Anyway, but looking at the financial innovation, I think there's another one, which is very important, which started really in 2008 with launching of the smartphones, which is payment systems. That's a major change, because now electronic payments represent the major part of retail payments in every form, through credit cards, through your phones, through the internet, and so on. Clearly, it's been an open field for the GAFAMs, and, of course, for a number of startups in that area. The reason the GAFAMs entered that field is because, first of all, regulations for payment systems are not as strict as regulations for banks. As long as you're not a bank, you can operate. Second, they get huge amounts of data, and data, of course, is money for them because of the advertising which goes with it. The moment they get into banking, then they get an avalanche of regulation in many ways. So in a way, that's a barrier to entry to banking, which protects the banking system. On the other hand, the innovations are used by the banking system. Going back to cryptocurrencies, as you know, they use the blockchain, and there's a number of cases of private banks using blockchains for their own purpose. So that is positive and negative. To conclude on payment systems, I must say that it is indeed a threat for retail banking, but all banks have joined the crowd in terms of offering that system. And also, as you know very well, Jean-Claude, it gives ideas to central banks. And the code is C-B-E-M, central bank electronic money. So far, it hasn't been put in motion. Of course, bankers are really saying, if you really do it all the way, what do we do as banks? Okay, so it may happen, I think, from what I understand, but it may happen only to cover the problem of inter-bank or inter-country payments, international payments for small amounts, which are indeed an area in which progress is needed. So it's a different subject from all the macroeconomics we're discussing, but it's a very important impact. Again, cryptocurrencies not a systemic risk, a moral risk maybe, criminal risk, but not systemic. And on the other hand, payment systems, a major revolution for retail banks, and not banks insurance, fund management, the whole financial industry. Thank you very much indeed. André, you were concise and luminous. I have to say that as regards the cryptocurrency that would be issued by central banks, the VIS is working like you know very, very actively on that. I take it that they consider that a major constraint is not to destabilize the banking system, that's clear. So to try to have this electronic crypto money exactly as the equivalent of the notes, which of course calls for also for certain limitation, but the start will probably be in this domain and they are very close to start the thing. Technically, of course, it has been totally explored, the blockchain that you mentioned is very well in order, and you have several concepts, you know that better than anybody, but there are many, many concepts that can be utilized. You were a little bit benign on the so-called speculative instruments. It seems to me that we really have a problem of fraud, of I would say illegal behavior, criminal activity, financing of terrorism and so forth, which remains underlying. I hope very much that the authorities will regain control because there has been a period of benign neglect, which was over exaggerated. Anyway, okay, thank you very, very much indeed. André, I turn to John and don't be surprised if we address many different problems. The idea of this seminar traditionally is that we address a lot of problems, and then we discover, of course, that we missed two or three that are also important, but it should come from the audience. John, you have the floor. Thank you. Yes, and our chairman instructed us to focus on narrowly rather than across the board. I've been, thought I would talk a little bit about what's happening with trade. And as I said yesterday in the plenary session, what's particularly notable is from 1950 to 2008, essentially, trade grew faster than the global economy. In other words, trade, as was intended by the architects of the post-war international system, that it would facilitate trade, and trade would be a key driver of the global expansion. Since 2012, essentially, since the fading of COVID, we now have had a decade in which eight out of 10 years trade has grown more slowly than the overall economy. And the expectation is that this could well continue going forward. Now, there are some obvious reasons why this might be happening. There's been post-COVID relatively slow growth in general, and that has meant slower in private incomes, slower growth in private income, and in the context of slower population growth in many countries. But it has given rise to discussion of de-globalization, fragmentation, et cetera. And this has been accompanied, these concerns have been accompanied by a dramatic deterioration in the operations of the World Trade Organization. In 2008, one of the key priorities of the first G20 Leaders Summit was to prevent new trade restrictions and to promote the adoption of new liberalization, specifically the adoption of the WTO's Doha Development Round. Well, the opposite has happened. A lot of new protectionist measures have been adopted, and the Doha ground has been completely abandoned. And in the meantime, as is well known, the WTO's dispute resolution mechanism has fallen into disuse and disrepair, and symbolizing a deterioration in the trading system. But it's probably worth thinking a little more broadly about what is the underlying aspects of this change. Let's think about before, in the post-World War II orders, trade was driven by gains in cost and efficiency. Essentially, it was obvious economic incentives that drove trade through the opening, the reduction in restrictions, lowering of tariffs, et cetera. But the focus was essentially economic. And in fact, a high point, I think, in considering that many of us came from the use to a world in which import substitution was considered a viable means of development. I can recall the Commission on Growth and Development that was operated by the World Bank, established by the World Bank, and chaired by Mike Spence, the Nobel laureate, that concluded that there was no case of sustained rapid development of emerging developing economies that did not involve an opening of economies to the world markets rather than the opposite. But it seems to me that what is happening is there has been a shift in considerations, not that there's been an abandonment of the idea of we're pursuing economic efficiency, but there are new considerations that are being taken into account and taken seriously. And they, I think, can be lumped into the rubric security, security about energy, supply, security about food and health, security about even technology. And, as a friend of mine, Marsha Vandenberg, says, this is really driven by three Cs, she puts it. First C is conflict, Ukraine and U.S.-China tension. Second, COVID, that brought about a new realization about potential issues of resilience of supply chains and the danger of relying on foreign trade and avoiding bottlenecks. Third C is climate and a clear need for international cooperation, but also the possibility that climate-oriented measures like a border adjustment for carbon tax could create new barriers to trade. And then finally, as we've talked about today in tech and technology and the source of proliferation of both new forms of subsidies as well as new forms of trade restrictions and as we've heard this morning, subsidies in this area are becoming so ubiquitous that they're virtually meaningless since everybody's subsidized, nobody has any particular national advantage. And then finally, the new need, the new allied aspect of trade in data and the concern about data security and the worry about cross-border data access. Now, we can see part of this in a reallocation of trade, you might call it trade diversion, but certainly we're seeing the growth of manufactured exports from Bangladesh, Indonesia, Vietnam, Cambodia, India, and in the United States, especially Mexico, as some recent research has shown that in many cases these, the businesses that are expanding trade in these, let's call them more frontier markets, is probably the wrong word, but newly expanding markets may actually represent investment of firms that formerly located those activities in China. So where are we headed? Well, the G20, the recent G20 Leaders Summit, had a new section on trade and it said that here's what it's looking for, here's what the G20 are committed to, a system that is rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable, and transparent with the WTO at its core. What are the measures that they agreed to do this, to accomplish this? First, they said resurrect the dispute settlement system by next year. Good luck with that. That they will promote exports from micro and small and medium enterprises. That they support the G20 generic framework for mapping global value chains. That they will continue work on the high-level principles on the digitization of trade documents and they will support the WTO's aid for trade. Doesn't sound like a very active agenda for turning around trade. My conclusion is that these three C's, conflict, COVID climate, and T technology, are going to have an impact and it's going to be a while and before we can start to resurrect a trade system that is consistent with the goals announced by the WTO. Thanks to me by the G20. Thank you very much indeed. You are killing one of my very small list of positives because I would say despite the geo-strategic tensions, despite the corals and the wars, we had a communique of the G20. The full body of the international community signed it. The triumph of the Indian in managing that to get that communique has been quite remarkable. And also in our domain, a pure financial domain, the system of the Basel committees, the financial stability board reporting to the G20 continues to function. We have there something which is perhaps miraculous but continues to go and we will see your skepticism is perfectly justified. I was focused just on trade. You are right. On trade, we are very likely of course to be disappointed. That's absolutely clear. Thank you so much. I turn now to Jean-Claude and he will have the Moudafen. Please, Jean-Claude. Thank you very much. Last year, we were in the middle of a storm and I anticipated, like Mr. Horry, during a very dark situation which could lead to a more rosy picture in 2024. Today, I confirm a more rosy picture for next year. But just with a delay, I end up next year in spite of a huge geopolitical risks around us, particularly since October 7th. Last year, we were wondering when the rates would increase. Now a question is when a cut will happen. World inflation has dropped to its lowest since two years. Growth has declined without a major recession in spite of interest rates at their peak. The tightening cycle is coming to an end, but central banks have to finish the job and keep interest rates higher for longer. It does affect the stock market since mid-October. It will slow the world growth and will hit consumers. But at the end of next year, at the end of 2025, according to Jean-Claude, we can forecast a soft landing in the U.S., less so in Europe, which faces a risk of stagnation. I'm sorry this year not to be very original. It seems to be an awful cliche, but sometimes cliches do happen. Today, after October 7th, the war in the Middle East will cause a probable rising cost of energy, compulsory additional investments in defense, the reduction of world trade, a weakening confidence and therefore a lot of uncertainty and volatility on the markets. This new situation has a chance to increase inflation and reduce growth, but hopefully should not encourage further tightening in order to avoid the risk to squeeze the economy too much. By the way, these bad news have not affected the stock markets too badly. Oddly enough, the markets being more sensitive to the recent rise of treasury yields, which favors bonds against shares, and then being more sensitive to the pose of the Fed rates. In spite of this huge risk, we can keep our previous scenario of a soft landing in the U.S. and a stagnation in Europe, even though I'm today a little less confident and more cautious. Three additional comments. First, there is a large divergence between the U.S. and the Eurozone. In so far as the GDP, it is flat in Europe and around maybe 2 to 3 percent in the U.S. Inflation in the U.S. is 3.7 percent in September, 4.3 percent in Europe. This divergence is because the U.S. have started earlier their monetary policy and because Europe has much less resilience. Being fragmented, being near the war in Ukraine, with an aging society, with a financing coming from banks instead of equity markets in the U.S. Second point. This divergence should last until the end of 24. Inflation could be 2.6 percent in the U.S., 3.2 in the Eurozone, the growth 1.6 in the U.S., and very small in Europe, around less, around 1 percent due to particularly sort of recession in Germany. In a nutshell, more inflation in Europe than in U.S., more growth in the U.S. than in Europe. Maybe besides soft landing in the U.S., we shall have a landing in Europe. Third point. Central banks seem to be in favor of a from now on and they should start cutting rates second half of next year, fueling then a recovery. To conclude, the stock markets should remain volatile and relatively flat until the third quarter of next year. The U.S. stock markets and the Japanese one could go up slightly more than the European stock markets, which will remain bumpy. But naturally, old stock markets would go up again as soon, of course, of interest rates will appear, i.e., end of next year. This scenario may be too optimistic. It would be achieved, provided that the slowdown in China and the accumulated debt worldwide do not deteriorate further and above all, that the crisis in the Middle East remains limited. Contrary to what's happening now, the geopolitical risk might greatly influence the markets and dramatically change this very quiet forecast. You're prudent. You reserve all possibilities, which I understand pretty well. Thank you very, very much indeed. So we have a lot of concepts. Thank you very much. I'm going to ask a very simple question. I was a finance educated person actually, but I want to break it down in a very simple manner, as a former decision maker person. My question is, what do you mean by economic efficiency? The word came often time. But for me, economic efficiency is to be able to be on the market and finance my projects. What I understood is money is not going to flow from what I've understood. So my question is, do you think as a person who I intend, but I used to, you know, deliver for the people who elected me, do I have more chance to going to China and raise money than coming to Europe to do so? Considering the fact that I might be in a continent that is wealthy, that can sort of, you can borrow against the wealth that is there, providing that you manage it well and you fight corruption and what have you. So how do you see the China, Europe relationship or even balance to that regard? Because that's the question that is posed to us in Africa. And what do you think or how do you see some alternative funding mechanism for infrastructure financing? As I said, for countries who do have wealth. So that's really my question as a as a client. That's a very good question indeed. And perhaps Marceau could start to respond. Well, I would just say one thing in response now, which is that I think at the moment it's actually quite hard to get money out of China. If you look at the numbers for Chinese lending particularly to Africa, they've gone down quite dramatically. I don't have the numbers in my head, but it's like a very dramatic decline in the financing from and the second thing I would say is that some of the emerging markets are still able to access it, but it depends on how robust their own finances are. So anybody who has relatively high debt or has high repayments in the next year is having difficulty accessing the markets, but the others are able to do it. Maybe Jean-Claude will have more market information on this. Jean-Claude, do you want to say a word? No. Let me only mention myself that it's not China vis-à-vis Europe as far as I understand. It's China on the one hand, vis-à-vis all other I would say continent including the U.S., Europe, and there are two aspects in what we have observed. One is that China has a real problem and creates a real problem when they refuse to take into account that they over indebted some countries and they don't participate in the system which permits to alleviate the debt. So it's a real issue and they are having some problems with the Silk Road, Belt and Road that are associated with this. And of course you still have the African Development Bank, the World Bank, I mean the system, the multilateral system still there. And of course what Masoud was saying in permitting the system to take more risk, capture more, have a leverage with the private sector and have more money for Senegal and for the other African countries is something that we would strongly recommend. But yeah, please, last word and then I follow the question. Because with some people around the table, I have skin in the game. I'm trying to invest in this country and your question is absolutely legitimate. One of the issues we are facing and again we are discussing with Jean-Michel and I'm sure you will add something to this over lunch. As Masoud said, one of the big issues we are facing is that the public system is not up to the expectations full stop. And that's a massive issue. You mentioned risk aversion, I think this is a cracks of the problem. Again, no one to enter into our stories, but I've been personally involved in three or four reports on blended finance. I'm tired of doing reports on blended finance. I mean, we know everything which is working. We know all the instruments that should be put at risk. We should just do it and it's not happening. Again, there are many reasons for that. So I fully support your reason, but I fully support the ideas that we need to shake the tree and do. There are instruments, there are resources. I mean, we don't need to invent the wheel. I mean, that is not the problem. The problem is just to find a way to get there. So the question for all of us is who blocks? But we will respond afterwards because I have five questions. So since you declined the request of the Prime Minister, I'm going to go back by the window and maybe ask the same question under a different angle. I'm going to start with a very obvious statement, but it's good to make it. If you have one euro or $1 to invest, it's much better to invest it in India to fight climate change than it is in Denmark. That being said, and going back to what Masoud and Pierre said, clearly there is a risk context, which is that there's an increasing perception that debt is going to be risky. And so a suggestion maybe for regulators in the context of Basel III and CECA and the equivalent in Europe would be to sort of ring fence this kind of investment separate from the usual EM debt and recognize the fact that it's such a benefit globally that you could reduce the risk of that investment almost to zero from a CECA perspective, of course under the proper monitoring, so that return is understood and the risk is seen as acceptable by the rest of the world. We take this question and you reflect on the response. I'm sorry, I go through the successive question now. Jean-Claude, you will the first to respond. I have a question following the one Prime Minister raised regarding the investment in infrastructure. Actually, my question is for Masoud. Masoud, you mentioned multi-development bank, MDB are required to mobilize the private business, make investment infrastructure, but seems to me by nature the private business is more risk aversion relative to MDB. So in another way, private business is not good identity to make investment infrastructure. So it seems to me it's kind of full contradiction. So I want to listen to your comment on that. Thank you for this very good question, please. Thank you. So one issue that worries me is that the levels of debt around the world are higher than for the last 200 years. The economist is running a story on this right now, I think very valid. And the big question behind that is how do we think that the interest rates and growth rates will compare to each other over the next decades or so? So we had this discussion R versus G, until two years or so, people were converging on the view that R star, the equilibrium interest rate declining, falling below the growth rates that we can sustain and so the high debt levels are not an issue. But I think the three C's that John mentioned, all of them drive up interest rates, drive down growth rates. So how do we deal with these enormous debt levels in the world where they are maybe higher than the cheese for longer time periods? That's what do we do with debt crisis in emerging markets first maybe and then later also in the more mature ones? Yeah, well I would say the central bank are not doing what they did in the first oil shock and second oil shock, namely practicing benign neglect vis-à-vis inflation and then being obliged to catch up dramatically with interest rates at the level of 20% in at the beginning of the 80s and not at five or four as is the case in the US and so fortunately part of the explanation that we do not have these dramatic crisis that we had with the Latin America crisis of this period is perhaps that we have wiser central banks but I stopped there. Jean-Michel? Oh, I'm sorry to ask you. You too have the floor. Sorry. In the order that you would prefer. Yeah, thank you very much. I would like to answer Prime Minister's tour and make a comment on trade. Actually it's the second year or the third year in a row I think that negative in Africa is experiencing negative net flows to China. Which is an unprecedented even since for the past 20 years. And it's going to last. It's going to last because China is very slow at restructuring its debt and it's downsizing dramatically the roads and belts initiative for internal domestic fiscal reasons and also the overall debt situation and interest rate situation. So it's highly unlikely that in the coming five years there will be as open access to Chinese money as it has been the past let's say 20 years. And of course it's very unfortunate because this is taking place at the moment when because of everything that has been said here about interest rates etc. markets are shifting. Basically it's as come we have come to a moment where it's now it's nearly impossible to raise equity for investments in emerging markets and especially for Africa and debt flows have shifted back towards OECD countries the nutshell. So we are back to a situation where public flows are really the key concern and you can as Masou already mentioned it we have to really focus on debt restructuring debt consolation and here China is the leader nothing will be done without their leadership and their acceptance of terms given what Bertrand said about their preeminence in debt stocks and second of course public institutions bilateral or multilateral are at the forefront of providing additional money for liquidity concerns or for investments yet and I will stop there on that because we could could spend a lot of time on this issue there's still room open for specific invest private investments in infrastructure because if you go on a case-by-case basis and if you're able to provide exciting investments with high returns because of the overall liquidity situation you could attract one could attract specific investors in specific PPPs but which require a lot of which in of preparation and framework from governments to make those PPPs credible but this window is still in my mind's open on the private side thank you and a very short comment on trade I'm participating I'm involved in several very capital intensive multinationals what is very striking for those corporations and their strategies is that beyond everything that Mr. Lipsky mentioned and which are completely fully correct there is now a very different beacon in terms of choosing locations of productions this used to be mainly labor costs which has driven the manufacturing sector and especially heavy manufacturing sector in Asia but now the cost of energy and access to a competitive clean energy has become the new beacon because labor costs are not playing the same role as they were before for technological reasons robotization is lowering in the relative terms the role of labor costs and but you know having clean energy is really what matters for those heavy industries so and this is by the way one of the opportunities for emerging economies including Africa and the thinking about heavy industry has completely changed and has opened new opportunities for countries which have this type of access and building a competitive advantage which was not absolutely not there 20 or even 10 years ago very interesting I'm sorry because we have the first batch of questions so we stick to the five questions that we have and we see how to respond and then you'll will be the first to ask the next question but Jean-Claude is the first to address the part of the questions that he wanted to comment I just wanted to come back to the question of the former prime minister of Senegal in so far as Chinese financing the problem is not the availability only it's the quality and when we look at the Chinese financing we see for instance there has been a financing of a highway in Montenegro the cost of the road was absolutely outrageous and of course they are to Montenegro a 30 years financing but that's terrible for Montenegro we don't know how to sort out this story not to mention copper mines in RDC of course and other financing in Africa so I would I would very modestly be a little blunt but warn you on Chinese financing okay thank you very much indeed and the remark which was made on China now exporting of an importing money out of Africa I must confess I didn't know that of course it means that they are repayments on the one hand and new money on the other hand but the algebraic computation would give a negative flow coming from Africa to China I didn't know that it has to be checked because it's a little bit surprising but thank you very much so now we have to respond to all the questions which were asked to the speakers so could you raise your hands a lot of questions on trade John you respond I was going to say a few words on the debt issues and first of all that debt issues are high but of course the issue of how much is too much depends on how much does debt cost and then in this context it's I think it's very it's critical whether the central banks are successful in reducing inflation because if so it will reduce long-term interest rates as I put it in the US context for the first time in my memory in my lifetime individuals households have have structured their own financial affairs with the assumption of sustained low inflation and low interest rates and that's why I think it'll be very interesting I assume that there in fact is rather broad public support for getting inflation back down again and interest rates if that's the case then the challenge with regard to debt levels will be will be muted relative to what they what they would be otherwise and with regard to sovereign debt the of course pre before the global financial crisis the Paris Club provided a working working process for re for restructuring sovereign debt and that obviously if there is a working system a smoothly working system that encourages that makes it easier for countries to borrow the system is broken right now for reasons that we all understand and the G20 established something called the common framework for debt treatments that has not been anywhere near as successful as as anticipated what is happening now it's a low profile the under the IMF and World Bank have jointly established something called the global sovereign debt roundtable that has brought together in a confidential way not completely confidential there's a public report of the of their discussions both lenders borrowers both private and public and hopefully there's enough of pressure on all sides to make some arrangements that will at least make this process much more much easier just to one other thing when we talk about why hasn't more money gone into things like climate change public goods the we're working on this at the Bretton Woods Committee and think of it in terms of two gaps a public sector gap and a private sector gap what is specifically holding back of debt flows for the private sector there's a lack of price discovery mechanisms for things like lending for climate related projects there's a lack at present of adequate instruments by which you could express that investment and a lack of enforcement mechanisms reliable enforcement mechanisms that mean if you if a private if you invest in a project how do you know it's really going to produce the results that were expected there was a session on this earlier today that was that was very interesting i thought for the public sector what are the problems there's a lack of any governance clear governance structure and financing it's each institution doing its own thing there's a lack of governance on implementation and for these kinds of projects there's there's no standardization and similarly there's no independent ex post assessment similar similarly for the private sector that you know that what you the you can count on what you did what you lent actually had the had the effect that was claimed and it seems to us that until those specific gaps are filled we're not going to have any substantial increase in flows these are preconditions for for success there you mentioned the absence of coordination between the bilateral donors is that right yeah yeah because the multilateral institutions are functioning more or less thank you very much indeed i just want to say one thing about the private investment that you do you asked and john michel gave part of the answer to that i would just say one thing that we have to be clear for a clear about is to be more realistic about where we expect private flows to go so we're more likely to get private flows into emerging markets and better middle income countries than we are in fragile states so it to me it makes less sense to put a lot of official money grants to try and subsidize private sector to attract them to fragile states because use a lot of grants to get limited amount of private money whereas if you do in middle income countries you can actually get more so i think one is just to be a bit more open clear-eyed about that and the other thing is the instruments that they use so for example you know you just look at world bank if they use guarantees they mobilize four times as much private money with guarantees that they do with the loan but the internal incentives for doing guarantees is that it doesn't help the staff to do a guarantee so they like to do loans rather than guarantees now here's something you can change that would have an impact so i think that's just one on private the second thing i wanted to respond to was on debt just to pick up one point one is that there are a lot of countries that the IMF has been saying for four years are at high risk of debt distress but there are very few countries that actually default if you look at the number of countries that have defaulted and that's not because they're not under pressure is because the cost of defaulting in the system we have to fix defaults today is really high for a finance minister so we did some work looking at what happens to their spending and what happens is that they keep paying their debt service which is rising sometimes 50 percent 70 percent of their revenues but they cut back on education they cut back on health and they cut back on future investment so in effect they're defaulting on the next generation rather than to their external creditors because the cost of doing that is very high and and link to that i would just say there the system will not improve for a year or 18 months despite the efforts of this sovereign debt round table it's slow it's messy it'd be small incremental improvement i personally don't think that 18 months from now we'll have a radically better system and therefore the question truly to me is in this situation how do you help the countries that are under the greatest financial liquidity pressures today rather than hoping that somehow the system is going to get fixed and they're going to have some grand design you know the world bank is very keen actually on talking about let's have another hippick and uh you know first of all hippick doesn't make sense for the current structure of creditors and secondly there's no political basis on which the chinese and the price club creditors will come together in a hippick like format now and therefore we should be focusing our energies on what helps the country is the most rather than on some grand design which is unlikely to come about with the politics being what they are so thank you very much indeed masoud as a former president of perish club i will say word but after we have heard all the response all the responses so uh do we have other speakers that would yeah please please of course pertrand thank you jean claude uh i wanted to react to yan's uh proposition i i think what strikes me today is that on the one end we continue to say that there is an emergency and uh but we don't act as if it was a real emergency we talk about this being urgent we talk about we need to change things and the reality is that it's more of the same so instead of putting one billion you put two billion and the two billion don't move anyway and and so i think we i mean we've addressed all the issues all the gaps etc and again no need to come back on that but i think to face this sense of emergency we should really work on two things uh learning to be a little bit more generous uh and i think generosity is not necessarily a word that match word with well with finance but i think uh i i see we need i mean this i think this was the words of president macro in paris what he means with that not sure but he said we need a shock of concession or finance we need real grant money i mean we don't have i mean we are discussing i mean you can ask the world bank to lend more but this really add to the debt thing so it's a vicious circle so i think we need to be generous in a way or another we have been capable in a number of countries to subsidize gasoline during the rise of prices and 50 billion in france i mean we could have used this money in a different manner i mean of course it raised political question etc so generosity and and and our genuine interest is to move in that direction i think this is this is important and the second thing coming back to yans point i think we have to be a little bit more innovative in the way we apprehend things i think we will die of doing more of the same forever and in the regulatory framework itself yeah of course none of it there are a number of issues coming back to senegal i mean depending on whether your oecd country another oecd country with the same rating the cost of capital for investment is double with the same rating and i mean the long list of things is like this and we know that and we know it's urgent we explain i mean i don't want to enter into the discord on how to finance gas in senegal i mean this is a very interesting topic but you have all these issues everywhere and we circled around and so i strongly support this type of approach we need to i'm not sure this is the right one but at least to to address this we have a global issue which needs to be addressed locally and we need to find the instruments which connects the local and the global to go there and we are incapable of doing that okay so if we want to be a little bit practical what could we say that first of all we need china on board goes without saying because it's an anomaly which is very very very and we should exert maximum pressure or chinese friends for them to to join the international community in a domain where it is in their own interest because it's not their interest to be free in freelance in this domain no yes i i agree with you of course we need to have as many people on board as possible including obviously china but but china is the first creditor so it's it's aberrant for the other should not do anything because they would work for no i think it's a it's a matter of understanding exactly how the the problem i i discussed with chinese friends they have a difficulty to understand exactly what is at stake because they have not their own procedure to risk a deal and they prefer to deliver new money and get the payment so but but anyway so yeah of course we need to have china but it's not it shouldn't be an excuse for the EU or the US not to do anything i mean we have said that the g7 who says that they do nothing i'm the EU no i mean we do things but we could do way more i mean we have said that the g7 in germany last year in el maro that the g7 will come in 600 billion uh dollar to emerging and developing economies i remember i was with president macron in africa and one of the guys there was some people from the civil society said president macron this is great where is the money it's a fair question it's a good of course but if you take the case of france france is broke so it's not a very good example no frankly speaking do we have magnificent promises but it's a little bit more complicated to get the money out of the budget but uh yeah please sir i guess uh many people mentioned the the debt uh china to developing countries i guess uh some factor we should keep in mind yes china is the one of largest official uh uh debt uh countries but if you look the whole uh debt uh situation actually private credit occupy most debt owned by developing countries having said that i'm not going to defend what chinese government know from what i heard from some chinese official what are they worried about is if chinese governments involve some debt restriction they worry about the money they give out the the debt country will pay back to private credit that's something they little bit of concern so as someone say we should look like john say get it together to have some comprehensive uh the debt restriction it is the the right concept you're absolutely right the right concept is that there is a balance of efforts made by all creditors on the one hand and it should be emulated by the same balance of credit on the other hand and the the idea was always we understand that it's very difficult for uh for the private sector but then the private sector can compensate with new money i mean there was always a balance if it is not balanced you're absolutely right there is no case nobody will be happy and neither the private nor the public in any of the country's concern so we have to reconstruct something which would work the the public sector in my opinion is up and running but one country is not participant the private sector that's another story and the work that you're doing in the britain woods and under the i would say the institution concerns that you mentioned is very very important of course john let's say just one word the the idea of the sovereign debt work uh round table is exactly get everybody around the table the situation is everybody's going to have to do something i think the trigger is going to be the the debtor countries and as masuda pointed out who have been basically uh starving themselves in a way uh or on a on a severe diet to avoid trying to restructure because the system is so broken i think they they have to put pressure on the on the lending countries and saying enough is enough you guys have got to get together hopefully that round table will be a context a confidential context in which they can say we we all have to participate i i hope it's faster than masud's timetable but chocolate very quickly i am very skeptical that china will join the price club for a simple reason they they have they own two thirds more than 60 percent actually of country to country debt and they're very strong convenience i mean very strong bilateral agreements why would they mutualize the risk because it was the case of all the other creditors at the very beginning there was no such agreement but now it's very progressively all public creditors discovered that if they wanted to get out of the difficulties and help the country's concern they had to discuss together to be sure that everybody would make the same efforts whatever the covenant and so forth but again it's it's easy to speak of a government which is not there very easy but i i had exactly the same problem in my time with some emerging economies that were creditors of and and we had arrangement we could solve the problem it is it is solvable now another problem another problem which is solvable masud is to change the culture inside the mdbs and the world bank but yes because if a significant part of the risk can be taken by the public institutions then we are leveraging the private sector please madam yes the country you're talking about i mean i'm part of one of them so actually i think sometimes it's a it's a it's a dialogue that we and we don't understand ourselves first of all there is no ideology involved in the financing of our economy wherever the money can come from we're looking for it that it has to be very clear and european should not see it as african being pro chinese we could be pro whoever as long as the money comes so so that it has to be very clear enough because it's taking it's taking a political sometime turn into it um what we are looking forward and masud thank you for saying that we are the best payers when it comes to our debt we we just pay to the last penny so that needs to be said it's not like gifts that you know are just delivered and we starve ourselves sometime to do so because we know the cost if you don't do that you don't you don't pay your civil servant and you're out as a government because you have the streets that will take you out so that we do pay but what we are looking forward to is money sitting on the market and we do have great plan of developing our industry for instance in senegal we don't even manufacture needles we import them and that's where the support is expected on a win win situation because i do believe it's gonna be uh business to business development so i do think that there is a money for that everybody can make money on it so why it's not happening so that's my that's my very question and then you go back to some type of ideology because i'm like is there a willingness collectively to support this country to get out of their current situation you ended up doubting it because i mean i don't know because the money is there so if we can if we can sit down and have really a reasonable discussion then we can make it together because i do think europe needs that you were speaking of public money or private money for for the needles well you will always have the public supporting the business to business contract i mean by creating the the right environment making sure that justice you know come along corruption is contained contain and things like that so that's that's why i think we don't understand each other most of the time because every time i have this kind of discussion with bankers um they have had time understanding where we are coming from and why i raised the the china issue um if you look into the period the 15 years of collaboration some countries with china they have never been able to raise money to develop the minimum of their infrastructure that's why when china came in that you saw the boom and that's the truth that's what we have seen that that's the real truth so in between we had a 500 years relationship with europe it didn't happen and then you have a 20 or 15 years with china it does so see where the logic is so that's that's that's really i'm talking to you very bluntly yeah because that's what we how we are here among ourselves you have this yeah so of course so please look into it i'm saying that because china because senegal is going to be a gas country we have one of the huge we think reserved of gas so the the question is going to be right there so but they will be necessary to have a change in the in the thinking coming from the banking sector in europe precisely otherwise we will do business with whoever because we need that that business but mrs minister we were not saying that china was giving too much money to the country's concern we were on the contrary realizing perhaps that the flow is in the other direction which is not necessary the case for your own idea and your own investment but clearly the problem was to have all the countries of the world in order to try to solve the problems the public credit i'm only speaking of public credit the private credit are in the hands of this concept that you are trying to crystallize but we have specialists of oda here and i would like very much to hear mazud and john michel perhaps how would you comment on what said the minister of senegal would you say that if we change the culture of the mdbs then we will find the money including by leveraging the private money for doing what the minister is asking for well no i think that that will certainly help but i would say there's a bigger problem which is if you look at our oda i think somebody made the point earlier that we had 200 million roughly give or take of oda right it's gone up in the last four years but all the increase is accounted for by the extra money that we spend on refugees in our own countries here so the largest recipient of swedish order today sweden the largest recipient of uk oda is the uk so and that doesn't help secondly it's the money we're putting into ukraine and so if you look at order to africa it has actually gone down so it's so i would say there's a general point and secondly i would also say now we want to use the same order for doing climate finance in middle income countries so we're saying we need to use this oda to incentivize the middle income countries indonesia to borrow for coal commissioning and decommissioning of coal they need cheaper money so let's choose oda and they're going to ida which is the only window that is really focused on poor countries low income countries along with the african bank and they're saying can you find ways to reallocate but half of our oda actually goes to middle income countries so why are we not asking how about reallocating the money we already give to middle income countries for less uh important things and climate change so i think there is that issue the final thing i would just say is you know all of this conversation falls in is one basic issue in my mind which is we need to have straightforward and frank conversations about what we can do and what we can't do and what is feasible and what is not feasible it would be a lot better if we were able to give the money for refugees and cut back on oda and not pretend that it was oda it's better to say to countries look we can't do as much oda as we thought because we have to take care of refugees who have come into our country but it's another to say look at our oda numbers that have got up and you have to dig and find that actually it's not real so i i do feel that part of the problem we have now is this trust issue which comes from not having a frank uh and clear dialogue very clear john michel yes very quickly uh i think we are experiencing uh quite a negative time for financing uh africa and it's external imbalances uh the uh we have talked about oda and it's correct to say that in the past three years oda in absolute volumes has declined uh remittance remittances have declined because of the overall macroeconomic situation in europe in canada in the us etc uh china has reduced has reduced massively its lending for the reasons that we have already mentioned uh and on top of it uh africa has now experienced also increased uh balance of payment problems i mean commercial deficits problems of all the continent has increased its commercial deficits so it's it's it's a complicated period and there's a need for a big change if one wants to to see that changing of course this is a broad assessment about the continent country by country it's different not all countries are in the same situation and obviously the ones that are in the most difficult situations are the ones which are owing most money to china i mean this is a big oil and mineral producers because this is there that the chinese money concentrated actually uh chinese money is not uh it's not at all distributed even across africa but massively concentrated on around five six six countries uh uh okay that of specificity so we have to address that and as far as the mdb but also the bilateral uh oda is concerned we have a major uh issue to solve on both sides which is the issue of conditionality this is the one which has been uh the most contentious uh how is it run what is it uh under conditionality macro micro etc this is the poison in in the oda pill which is preventing money to flow faster uh and to reach the basic needs of the of the countries and the and everybody has as a as a problem there but the mdb is particularly okay fine the prime minister as the flow please you will you will have the flow immediately after sir thank you thank you chair first i i think it's uh it was important that aminata uh creates a bit of emotion on the situation of africa and other emerging markets but i concur with ron michel i mean africa is in a credit crunch is in a critic crunch which is in a sense uh worse than what uh happened in 2009 for instance it's a real uh real crisis with a sort of pandemic situation where when you have a default of the country it has an effect on countries absolutely in in a deep deeply different situation so that gana is in default has a paradoxical immediate impact on the very coast and so on and so forth even if the situations are very very different but to be constructive uh maybe one or two comments to attract the private sector we can easily put a few tools uh on the table we know how to ensure the risk we know how to how to buy and sell the risks i mean it's not technically that difficult uh in the world bank group Bertrand miga can be it's it's quite an easy decision uh a sort of more efficient tool an essential tool we know how to develop the guarantee funds i mean it's not rocket science we have a lot of experience so i think that uh treating uh addressing the risks professionally is really quite simple second uh Bertrand said something very real apart from the funding of climate change or social goals in development i mean we we have a problem of being able to absorb what has been collected in terms of funds and Bertrand is right when he says it's very difficult for the for the emerging countries in the developing countries to be able easily professionally to absorb take the forestry for instance forestry you can find business models to invest there to get the carbon credits and to have a very positive impact on the planet okay but we have not the tax environment we have not the concession legal uh system efficient in in in every uh country if you take the bassin du congo if you take the congo river system you have an immense potential and a very little number of projects so even when we have and if we were able to attract more private finance with the proper risk and insurance environment we have to uh support the absorption of those funds yeah but is it the domestic legislation that you put into question i mean the countries are very in unequal positions i mean you could say that gabon is a bit more advanced or ivory coast or south africa but we we can improve that quite easily look at what is done in terms of extractive industries contracts i mean support by the world bank by the african development bank in order to optimize or normalize that we can do that look at the facility to be financing in in in for for legal professionalism the the grounds by the african development bank we have made huge progress in terms of due diligence and execution and contractual uh systems uh for the governments through grants i mean we can easily technically support and it's cheap ways for the environment the business environment to progress because as of today it's maybe the the the worst uh sort of obstacle when berthand says blended finance is very difficult to implement and make efficient i mean it's a daily experience for the private sector to have no efficient and professional interface but it's it's cheap and simple and look at the privatization it was a huge transfer of asset ownership huge historical in africa in the late 90s it has been supported by for instance the world bank group in terms of uh professional support uh grants and financing for the processes to be efficient so it's cheap to improve the systems but the processes are quite important i mean the the actual real processes and on that we can make uh first progress clear enough thank you very much because you introduce an element of dynamism in the capacity to get out of the of the difficulty thank you very much and please you have the floor it might be the last question and then we will have a wrap up with the speakers please thank you so nicole up you i'm i'm an investor in private equity and i've been an investor in energy for 20 23 years basically i will expand on madam prime minister uh question and just maybe a quick addition to mr mayor's point on montanegro because i think it's actually quite important not only is it expensive but what we what we need to understand is are the the provisions and the loan agreement granted by the chinese it prevents montanegro to go to another uh another um a debt provider typically europe because they are forbidden to actually reimburse that loan because in this case if they default there is a provision by which the chinese can actually grab a piece of land of montanegro and in in that matter it is the port of i don't remember if it's cotar or a brugilla but i think we need to really understand for having worked with c i c for quite some time they know their contracts upside down and there is no clause that is made at random and so i think that the example you're mentioning is super important because it was true of the gabarone coal plant in in boston it was true of a number of infrastructures in the world and i think we need to understand that the this does not come cheap it may seem cheap on the pricing issue but it certainly does not come cheap with the structures that you've mentioned but the point that i would like to expand on and the question which is maybe a bit provocative is that i'm wondering in the end if if our financial system is not very obsolete because i think the point that madam prime minister is raising is is capital allocation you were talking about the the the u.s stock market which is actually holding pretty well today well the reality is out of the 3.4 trillion that were added by the msc i in 2023 four trillion comes from from the magnificent seven so the amizons the the microsoft the envidias etc which means that all the rest is actually loot has actually destroyed value on the stock market so seven stocks added four trillion for a stock market that added 3.4 trillion and i see that in in in my own world and i think it goes back to my prime minister issue today it's very easy to raise 200 million on a pre seed round on ai 200 million for a pre product pre revenue pre idea and it's very hard to finance projects in in in developing countries for one reason is because the risk aversion and i fully agree with mr hamid it's not only the public sector it's the private sector and the private sector far prefers adding another round of financing of uh chat gpt or open ai or whatever rather than investing in the real stuff that should we should be investing in because externalities are not priced in in our in our financial system very good remark of course and to think that there is no risk associated with investing massively in startups is also a fantasy so we we are but okay the the system has to be fixed in many many respect that's clear so it was a very stimulating and interesting exchange of views the government of china was not there so but thank you very much for all your remarks it was very very well done so can i ask the speakers whether they have a last remark i think we we had positives and negatives not only negatives in the exchange of views and we we know that we can perhaps and particularly have to say in the mdb's institution and the the i would say public od a framework taking taking more risk and leveraging much more private capital that that that is certainly one positive in the at least coming out of our discussion but the world remains extremely demanding that's clear so i go in the reverse order thank you i hope that the rates will go down because it's absolutely obscene to have rates of 10 percent for ivory coast or for senegal right now it's obscene it's impossible we cannot advise a government to raise euro bonds with 10 percent interest rates and we are exporting from developed countries our diseases covid inflation high interest rates but higher interest rates but but but this higher interest rates will permit us to get back to price stability which is good for everybody so i mentioned that only i think all the investors are focusing on so-called esg performance of companies i think they should rather look at what they do for developing countries and what they do for africa and what to do meaningful things rather than worry about esg you don't like esg really well i'm not an expert in development and finance but just one word about paris club don't forget there was a process called london club as well along with paris club and you know as far as private debt risk scheduling concerned bill rose always chairman of london club and negotiation usually took place in new york but it's labeled london club anyway and along with public debt risk scheduling under the auspices of paris club jen clode was chairman for a long time ago three decades ago i think london club approach happened and usually you know at the winks and arm twisting by center banks of the same countries and have them go along with paris club offshore debt risk scheduling that's that's what happened actually many years ago so the chinese concern about the you know possibility that the public you know money bailout going to private sector that didn't happen that way because of the london club approach thank you it was easier at the time because we had banks and not i would say bounce i just say one thing in in defense of the if you look at the contracts we actually cgd we did a detailed study of looking at the contracts of that were done for individual loans that were made by chinese bank it's true that some of them actually had exactly the kinds of constraints but i think you see now a learning process over time so i do feel that the more recent loans that were being made were more aligned with so what are the international norms because it's a learning process that i think all creditors went through and the other thing i would say you know larry summers is the chair of cgd and he made one comment when he said you know when we go talk to a finance minister from africa the chinese offer him expensive financing and we offer him a lecture and at the end of the day no matter how wise our lecture it doesn't compete with the financing so i think we just have to bear in mind as to what is the alternative offer that you're putting on the table thank you very much thank you i would just uh refer to the summit i mentioned which happened in paris in june we can discuss whether it was a success or not but i think the intuition was right what we need is to find the terms of a new global financing pack not just a new bretor notes but a new way to address these issues and i remember i asked thomas buber is the CEO of axa to to come on stage and uh what what he said strikes me he said what we need to bring in the conversation is a word together just simply together because everybody is in his lane everybody say i'm i'm right i know what i want to do i know what i need etc but we don't talk to each other we don't really work together i mean we see that at every level and so i think this is this new pack which i expect we might take a number of years we're not decided by one country one institution etc and it's difficult because as we've discussed i mean there are a lot of centrifugal forces that basically break the together approach but for me this is critical we we need to find ways to work together so i basically agree with uh with this is it shows that development finance is at the core of today's problems and i agree with masood that there is a short-term urgency but i hope that we won't stop at the short-term because we are going to have a succession of short-term urgencies in in the future as we did in the recent past as well i would also agree that all this is a core it's a coordination problem doing it together indeed and it's not only a public problem i think the paris club was was extraordinarily successful for the public side but it took years to to join forces with the private sector and i hope that the round table will be able to actually associate all this uh and that will be that it will be more than a crisis management mechanism that it can be actually a framework for future debt contract as well and what worries me that we are we are we are still thinking in terms of crisis management while there is a major pathology of the financial system that needs to be addressed one word on risk aversion i think it's built in and i i was i was struck when i was at afd that we were spending so much time trying to actually decrease the risk of our investments while development finance is about risk taking and there is no alternative because you can't go to your parliament with taxpayers money and oh this is what we did with your money and we took risks no we you have to go to them we make sure that what we finance is risk less because if not you won't get any money for future od a so it it's a big contradiction there one there are there are ways to think about it to create a set aside fund to take risks for example and it's openly mentioned at that but it it's it's something that requires innovation and discussion one final word on efficiency and i think it may be provocative but i think the way we defined efficiency including now doesn't take into account all the discussions about externalities climate change environment and so on i'm not sure that trade is efficient in many cases where transport costs are undervalued and that the price of transport doesn't reflect the social cost for example so i will be careful about mentioning efficiency without redefining what we mean by it because we are in a situation in which we need to understand better when things are efficient not only from sheer economic current perspective but including all the climate externalities externalities and yeah you are criticizing the price system in which the market economy function of course john i guess i get the the pen ultimate word the final word will be to the chairman but let me try to end on a on a more upbeat note the the consensus is that global growth is going to be sustained and a year and a half ago the consensus was we were headed for a recession and it looks like we've avoided a recession we are bringing inflation down and not that long ago there was concern that this process was also going to involve a financial crisis when the uh could it suise and the silicon valley bank uh failed and it looks like that's not happening so if that's the case and we can look forward to 2024 and beyond sustained growth back to low inflation and greater in and greater confidence in the stability of the financial sector despite risks uh that's not a not a bad outcome and that's probably a positive a positive environment for starting to think constructively about addressing these kind of big problems indeed john so i conclude first of all in thanking uh all the speakers because they stick to what had been the rule concentrate on a few issues i know that we had no speaker and no discussion on the next financial crisis which is looming on the contrary we could see that we could cope with this start of difficulty in credit suise and in the u.s. regional bank i don't exclude frankly speaking that we could have big problems in the non-bank financial intermediation and anything can still happen particularly if interest rates remain at a high level obviously and it is exactly what the central banks are telling us longer for longer for high for longer or higher for longer even if in my opinion they succeeded extremely well in trying to regain control but but on the non-bank which is not i would say under the prudentials of the banks anything can still happen i am struck and very impressed by the fact that we discussed development development aid financing with private funds the development i have to thank the minister because madame you draw our attention on that and it it had an echo which was overwhelming we all discussed that thank you also for all the questioner so i i think that if i had to conclude with a few words i would say we are relatively confident at this stage despite the abominable tensions that we have to cope with geo strategic tensions we know that a lot of surprises unfortunate surprises can come and that we have to be prepared for everything and we prove that at least in the banking sector with what i just mentioned because the reaction of the authorities was extremely rapid both in the u.s and in europe in sweden and and rapidity of reaction is absolutely of the essence if we have new teasing coming from here and there and but but again i take the sentiment that we should guard ourselves of being too confident or too optimistic that being said thank you so much for all what you have done in participating actively in this workshop thank you very much