Experts explain: Where will future growth come from?

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Kate Whiting, Senior Writer, Formative Content

  • The latest Agenda Dialogue brought together global leaders in finance and politics to discuss how to generate economic growth to build future markets.
  • The session was part of the World Economic Forum’s Jobs Reset Summit.
  • From the need to contain the pandemic, to embracing diversity and growing the green economy, here are some of the key quotes from the session.
  • How will emerging and advanced economies be able to generate the economic growth they need to recover from the pandemic, while also growing sustainably and equitably?

    This was the key question discussed in the latest Agenda Dialogues session, which coincided with the World Economic Forum’s Jobs Reset Summit.

    The speakers were:

    • Børge Brende,President, World Economic Forum Geneva;
    • Heng Swee Keat, Deputy Prime Minister and Coordinating Minister for Economic Policies of Singapore, Prime Minister’s Office, Singapore;
    • Thomas J. Jordan, Chairman of the Governing Board, Swiss National Bank;
    • Beata Habyarimana, Minister of Trade and Industry, Ministry of Trade and Industry of Rwanda;
    • Anila Denaj, Minister of Economy and Finance, Ministry of Economy and Finance of Albania;
    • Alain Bejjani, Chief Executive Officer, Majid Al Futtaim Holding;
    • Alexander De Croo, Prime Minister of Belgium, Office of the Prime Minister of Belgium;
    • Nishimura Yasutoshi, Minister for Economic and Fiscal Policy, Minister in Charge of Novel Coronavirus Disease Control, Cabinet Office of Japan;
    • Rajiv Shah, President, The Rockefeller Foundation;
    • Saadia Zahidi, Managing Director, World Economic Forum Geneva.
    World Economic Outlook Growth Projections
    How can we ensure an equitable recovery? Image: IMF

    Here are some of the key quotes about where they consider the greatest opportunity for building the “markets of tomorrow” – and what needs to happen for an equitable recovery:

    Tackling supply side issues in Belgium

    Consumer confidence and business confidence is at the highest level in Belgium since 2007, said Alexander De Croo, but there are supply-side constraints. So in the short-term to see growth and job creation, we need to tackle supply side issues, he said.

    In the longer term, there will be some disruption, but also some transition, he said. “But if there’s one place we don’t want disruption, it’s on the social side.”

    He stressed the importance of on-the-job training, changes in market regulation and a focus on market concentration.

    3 priorities for Singapore

    Heng Swee Keat said the country’s “top priority” was to contain the pandemic. He called on governments to cooperate to share information and vaccines equitably through COVAX.

    The pandemic has accelerated the digital revolution, he added. “To harness the potential of the digital economy, we need to harmonize standards and allow the trusted flow of data and facilitate cross-border transactions.”

    Singapore has signed digital economy agreements with several countries and hopes more can come on board, he said.

    The pandemic has also reminded us of importance of biodiversity, he added, so we need to transition to a green economy, and mobilize finance do this, as well as focus on reskilling people.

    Embracing diversity in Japan

    Japan has to welcome “diversified talent” to its island nation, said Nishimura Yasutoshi.

    “In the past we had been based on the seniority and mainly male workers,” he said. “We have to open up the opportunities for younger workers and women.”

    Only 17% of girls go into STEM careers compared to 40% in the UK, he added.

    “It can really drive our future if there are more women in STEM,” he said, adding he hopes there will be female Nobel laureates in future.

    Green industrialization in Rwanda

    Rwanda is aspiring to become a middle-income country, said Beata Habyarimana, outliningsome of the sources of future jobs that would help the recovery and transition.

    These included liberalization of trade, through the African Continental Free Trade Area, which would take the countries to a regional value chain, as well as shifting countries from exporters of primary products and services to added-value products and services.

    Green industrialization is one of the key sources of jobs, she added, saying Africa is in a good position to have nature-based industrialization and products.

    Kigali Innovation City – a tech innovation hub, housing universities and biotech firms – is helping the shift to a knowledge-based economy. “We can’t go without that.”

    Knowledge-driven development in Albania

    Knowledge-driven development is also key in Albania, said Anila Denaj. Professional education is very important, upskilling remains crucial, and Albania is focusing on ICT and STEM education to ensure young people have a future, she said.

    Agriculture and manufacturing are the key sectors for Albanian economic development and job creation and are undergoing technological transformations, she said.

    Direct and indirect support is needed during the transformation period for SMEs, and a higher budget for health and social services are also required. She added that Albania is working on attracting near-shoring projects, and building up regional value chains in the bloc “for a much bigger market for each of our countries”. Jobs

    What is the World Economic Forum’s Jobs Reset Summit?

    The World Economic Forum’s Jobs Reset Summit brings together leaders from business, government, civil society, media and the broader public to shape a new agenda for growth, jobs, skills and equity.

    The two-day virtual event, being held on 1-2 June 2021, will address the most critical areas of debate, articulate pathways for action, and mobilize the most influential leaders and organizations to work together to accelerate progress.

    The Summit will develop new frameworks, shape innovative solutions and accelerate action on four thematic pillars: Economic Growth, Revival and Transformation; Work, Wages and Job Creation; Education, Skills and Lifelong Learning; and Equity, Inclusion and Social Justice.

    Public-private partnerships

    Good cooperation between the public and private sector is really important, said Thomas J. Jordan – andthey both have a role to play, with the public sector focusing on the framework, while the private sector focuses on new markets.

    “Governments should avoid following an industrial policy, but let markets find equilibrium,” he said.

    We need to ensure public debt remains on a sustainable level or will see a big rise in interest rates, he added.

    COVID-19 has reset existing beliefs around the importance of opening up to better trade and ensuring we work together as a stakeholder economy over driving forward singular objectives, said Alain Bejjani.

    We can’t take a one-size-fits-all approach to the recovery. But to ensure it’s sustainable and equitable, we need to accept different regions have different priorities, he added.

    “In certain geographies, we should continue to put in place infrastructure to embrace the Fourth Industrial Revolution. In other areas we need to make sure we’re getting the right kind of growth and equilibrium between the public and private sector.”

    “There’s more we need to do and make sure our stakeholders find what’s in it for them, or we will be less equipped than we have been than when this pandemic took us by storm.”

    The private sector is very good at innovation, and that’s a theme that cuts across every sector, said Heng Swee Keat.

    The role of government is in creating the enabling conditions for innovation through investment in education and research: “We must not forget in the case of vaccines, the huge investments governments have made,” he said.

    He added that we need to strive for an “optimal division of labour” between government and the private sector, and that governments must continue to build bridges with the private sector.

    “Vaccines are an incredible showcase of what is possible if everyone brings together what they’re best at,” added De Croo. “This is how we will tackle climate change, and this is how we will tackle job creation in the digital space.”

    A recovery that leaves no-one behind

    Rajiv Shah warned we’re looking at “a decade of a great divergence”, where the lower-income countries – home to up to five billion people – are left behind by those that have had access to vaccines and fiscal stimulus.

    Developing countries have achieved only 2% GDP recovery, which is why people will be pushed back under the poverty line, he added.

    But there are opportunities for public and private actors to come together to find solutions, he added. “We have a major financing opportunity to meet the needs for green finance.”

    He continued: Now we know nations can borrow and spend at times of crisis. When wealthier nations recover, we need to remember there are nations that could become “a reservoir of variants” of COVID if we don’t work together.

    Saadia Zahidi outlines the six ways we can build an economy that leaves no-one behind in her blog post on Building Back Broader. They include focusing on the markets of tomorrow, prioritizing reskilling and upskilling efforts, shifting to the jobs of the future, building the care economy, reforming education and building equity into the new economy.

    Watch the full session here.

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