AMNC24 - What to Expect from Future Growth

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Samantha Vadas: Good morning everybody. We made it to Dalian. I know a few people had a couple of hiccups getting here on their journey, particularly because of some of that wet weather and weather in Europe. But we're here and this is the eighth time that the World Economic Forum Summer Davos has been held in Dalian as we know, eight is a lucky number in China.

Do we need some luck? does the world need some luck? Well, I don't think these very professional people need any luck but hopefully with some luck, we'll walk away with some meaningful exchanges and new perspectives today. The topic is the future of growth. Where's that going to come from? What are going to be the drivers of growth?

A short introduction of me before I get to this wonderful panel. My name is Samantha Vadas. I'm an anchor and China reporter at CNBC International based in Singapore but I used to live in China. I first came here in 2004. That was an exciting time for China – double digit growth. A lot has changed since then but where else better to talk about the future of growth than in an economy of $18 trillion, one growing at about 5%.

There are some problems. China's economy has been described as having indigestion [non-translated speech]. We all have had indigestion, we know what it feels like but the truth is, the reality is China is facing a future of structurally lower growth and transition to more high quality growth that has got people concerned. There are worries about the property sector and youth unemployment of course but still, still, many are looking to China to pull the weight here in terms of global growth.

The IMF is looking at 3.2% this year but it remains tepid. And there are many challenges that we face when it comes to geopolitical and trade tensions. There is fracturing that we're seeing across regions as well. So we're going to endeavour to unpack all of that today in these conversations.

So let me waste no time in introducing our panel and we do have the highest ranking women in their organization sitting on this stage. Two of them. Let me start with Amina Mohammed, deputy secretary-general United Nations. She has been a key player in the global development agenda from her role as a senior special assistant to the president of Nigeria on the Millennium Development Goals to her role under UN Secretary General Ban Ki Moon on the post 2015 Development Agenda process.

She now chairs the United Nations Sustainable Development Group. We've got Bonnie Chan, chief executive officer of the Hong Kong Stock Exchange, also a co-chair here at the World Economic Forum in Dalian with over 30 years of global capital market experience. She is an expert in supporting the transformation of Hong Kong's listed market and infrastructure notably helping to enhance market quality, attractiveness and efficiency. Welcome to two ladies.

Sitting beside me we have Faisal Alibraham, the minister of economy and planning of Saudi Arabia, supervisor of the secretariat of the Council of Economic and Development affairs and is currently tasked with leading diversification of Saudi Arabia's economy.

And right on the end here we have Adam Tooze, Shelby Cullom Davis Professor of History and director of the European Institute, focuses on 20th century and contemporary history, notably economic history. He has written extensively about current economic trends linking them to recent events such as the 2007/2008 global financial crisis.

So these are our panellists today and I do want to start off this conversation. As someone who covers Chinese financial markets for a living there's been a lot of talk about sustainability – the sustainability of future growth. I've been talking to investors about how they can be responsible investors, sustainably responsible investors.

Do you look at companies and what they're doing on ESG. If they say yes but they say that there are a lot of challenges. So I do want to put this question to you Amina. We talk about sustainable growth. We talk about equity and inclusion but we want them to be more than just buzzwords. So how are you looking at the future of growth in a sustainable, inclusive way?

Amina Mohammed: Thank you. Thanks for having us. Well, it's seven years ago now we had a four-year conversation with business when we shaped the sustainable development goals. So use it as a framing when you have inclusives economies which you're saying the transitions on energy, the transitions in food systems. Be very specific about that. Roll up your sleeves and be specific about those industries. What does that mean for them? And I think we did get a lot of traction.

We still do have for those who have embraced ESG principals. They're hard, because you have to invest in the long term, rather than the short term and every day the markets are changing. It does provide some challenges, particularly in developing markets in emerging economies, where this is far more difficult to do. The enabling environment is not always there.

So the easy way to do it is to grow brown right. Growing green is a transition. It's an effort that makes knowing in the long term that you want to be more sustainable for the planet to keep that 1.5 degree alive. So it's you know, government, industry, society. It's an all of goverment and society approach. And using the framing of the SDGs, I think is really helpful.

Look at how you're thinking about the circular economy. How are we thinking about the energy transition from production of food to the table, what are the value chains? Each part of that has a sustainability element. We want to really try to invest in that to ensure that the impacts of what we're looking for – the measures are there, it's not for want of measures, it's not for want of knowing what we have to do.

Samantha Vadas: What's hindering the progress?

Amina Mohammed: Perhaps a conversation with everyone that is involved. I think we're in silos still. We need to have those conversations with government and and to know that people in government, this is a difficult endeavour, across sectors. I'm sure the minister from Saudi will tell us about diversification. Doesn't happen because you have a policy, many policies, regulatory environment has to be improved.

And we have to see that when you’re coming into an economy that you’re able to profit – at the end of the day this is not going to be done as charity. The bottom line has to be profitable. And I think those conversations have not yet happened as perhaps has shifted as they should

Samantha Vadas: Let's put that question to you, Minister, then, I mean, what is Saudi Arabia doing in terms of some of those goals around development because you say that your country has demonstrated that it is the global growth story and in the past seven years we've witnessed not only commitment to this transformation but also delivering on that transformation. So what have you delivered on and what are the next steps?

Faisal Alibrahim: Thank you very much Sam. Maybe we'll just start with the context. I think globally we're witnessing, let's say the the growth story globally is a bit, challenged. There's many reasons for that. So that's the context that Saudi's in.

Saudi is doing, I'd say on a matrix of two – two times two – two things and on the other side, two things. One, we're unlocking potential, that's been, in the works for many decades. And this requires catching up on many fronts. But at the same time, we are carefully measuring where we want this economy to be.

This is, we're the fastest growing economy in 2022. That's where that quote comes from at 8.7. Underlying that is 5.6% growth in non-oil activities. Until today, that non-oil activity growth is still going strong. Today, 51% of our, total real GDP is non-oil, activities. Our non-oil economy is larger than our oil economy and non-oil activities have grown at 20%, since the start of Vision 2030, our blueprint. But at the same time, so we're kind of, as they say in China, walking, carefully over the stones to cross the river. But the world or the river now is moving in a faster pace.

So we're doing, the two other things are, we're putting our weight diplomatically on, making this world a better place. We're talking about ironing out all the wrinkles possible in a region that we live in, that we will always be, our, I'd say neighbours. And we're addressing that. And up until October, a lot of these, even with the help from China, we're ironed out. So we continue working firmly with our global partners, to address the geopolitical tensions globally. We're talking about things in the region but things also in Europe and elsewhere.

Number two is we will continue to deliver on what we, started out seven years ago. But at the half time mark with Vision 2030, there's a lot that was achieved. We have three priorities: accelerating economic diversification. Building a human capital development outcomes. Only 3% of the Saudi population is above 60 for the working age population. So virtually everyone you meet is someone you can employ work with. Train, upskill, re-skill. So it's a very exciting, economic story over the next few decades.

And thirdly, building institutional capabilities. I think today we're at the Annual Meeting of New Champions, right. So think, what what we need to think about is when things are changing fast globally, when there is geopolitical tensions, whether there are things that are out of control, one thing that we can comfortably do is continue to build capabilities and continue to engage and work collaboratively, either with other sectors, with peers in the same sector or with other governments. Keeping collaboration at the heart of what we do is very important.

Samantha Vadas: I think the takeaway from this just initially is that, you know, we can sit here and have as many panels as we like and have all this conversation here at the World Economic Forum but it's really about what we go away with and what we do next. Adam, let's bring you into the conversation.

How are you looking at some of the geopolitical tensions that Faisal was just mentioning? I mean, you've written extensively about this. What keeps you up at night?

Adam Tooze: Well, I think one thing, if I may, just to put this story about tepid growth that many people have been alluding to in perspective. I mean, the extraordinary thing is that we're only in the situation with a boring story, right? Because a couple of years ago, many of us were worrying about a much more extreme outlook, which was a hard landing. We've been through the single most extensive interest rate hike ever. It's not as severe as the Volcker shock of 79 but it's more comprehensive. And in the weaker parts of the world economy that has been felt very acutely.

There is an acute emergency right now in development funding for low-income and developing countries. It was highlighted by the Singh and Summers report that came out of the G20 last time. But the rest of the world economy and this is the bitter logic of the world economy. The small bits, the poor bits don't count much in global GDP. The amazing thing is the resilience of the bigger picture. The Saudi economy, the Indonesian, the Indian, the Chinese economy, the US economy growing like an emerging market. I mean, it's remarkable.

The only people who really did suffer in the advanced economy world, that shock was the eurozone, which was immediately impacted by geopolitics. So the shock to geopolitics, which counted in macroeconomic terms, was within Europe, where we had this epic gas price spike that rippled out into the weaker emerging and low-income countries and it was very difficult to get hold of gas.

Broadly speaking, the other stories, which are so much on our mind, the Minister alluded to October 7th and the aftermath there. This is a tragedy for the region. It's a tragedy for the people involved, derails many of the processes of normalisation. But it's very unlikely, I think, to spiral into a global economic story. Even the Russian shock was, I think, a European neurosis in the first instance. And we know how it dominated the European agenda to the exclusion of other themes.

The central issue for the global economy is the one that we all know and this probably needs to be spoken out loud. And is the relationship between China and the West, that is the axis on which globalization has turned for 20 years, maintaining that relationship in various ways. Even if people want to talk about de-risking, diversifying China, plus whatever those narratives are. And on the Chinese side, diversifying the range of actors with which they do business so effectively, including in the Gulf.

That's, I think, the story of globalization going forward. It's not an abrupt rupture because the aggregates are too big and the dynamism is too powerful but it is a story of gearshift and rebalancing and multi-polarity and the emergence of multiple different centres of the world that sustain that growth. Globalization is no longer a Western-centred story. It's something that engages regions all over the world most dramatically. This one here, the Indian Ocean economy and the Pacific.

Samantha Vadas: You mentioned some of those trade tensions. I mean, how are you looking at what is happening in terms of this rising idea of protectionism and divide and conquer? And, you know, potentially even as the headlines have been suggesting over recent weeks, a potential tit for tat tariff war now may be about to play out between China and Europe.

Adam Tooze: Yeah, we're seeing it sector by sector. So there's, I see in many of these stories, there's a sort of divergence between the headline-grabbing sector stories, the chip wars. Most evidently, surgical strikes on individual companies, largely from the western side on Chinese actors of a totally new kind. Then entire sectoral strike. So what the Europeans have done in sizing up the scale of subsidy to the Chinese EV producers and targeting them one by one with 100% tariff on the American side.

But if you look at the aggregate numbers, right, the extraordinary thing is that at the aggregate level, the Chinese manufacturing boom just seems to be, in fact, gathering pace. What we're discovering is we ain't actually seen what it looks like yet when the Chinese manufacturing miracle really hits its stride, because previously it's been relatively low-end. But if you move into these new quality, productive forces story, all of a sudden the Chinese are going to be over a variety of sectors we've not seen before.

And I don't I mean, in my heart of hearts, I just don't believe that any amount of tariffs or politics can stop the flow of high-quality, well-priced goods in a global market. We've seen that with sanctions against Russia – they don't work, right. If you have a big buyer with large purchasing power, they can get anything they need. Right. And so, I am, I think we're going to see heightening tension, a lot of dysfunctional politics. But that flow of goods, I find it very hard to see it being really stopped or contained.

Samantha Vadas: Yeah. It's interesting when you look at some of the headlines around this story that we were just alluding to with regards to the EU tariffs on Chinese EVs. Bonnie, of course, some of those EV makers listed over in Hong Kong, we're talking and thinking a lot more about the role of financial markets in global growth right now. And we were having a lovely conversation just before this panel about, of course, some of the biggest companies listed over in Hong Kong are behind the apps and the technology that is ubiquitous in China, perhaps several of which you people probably use this morning to get here to this conference.

So how are you thinking about this story from a capital markets perspective?

Bonnie Chan Yiting: Yeah, well, first of all, I kept nodding when Adam was speaking just now because if I look at the capital markets. And, you know, fundamentally what function it serves is really matching capital with opportunities. And of course, you know, for HKEX, because we have the super-connector between China and the rest of the world, we also want to match China opportunities with capital around the world. That's what you know, we aspire to do.

However, I think, over especially the recent past, what we see is a little bit of dysfunctioning happening, you know, because of geopolitics, you know and it's a pity because, you know, we, I tend to think that, you know, the markets operate the best when it can perform its function agnostically. All right. You know, disregarding geopolitics and all the rest.

And when I look at, you know, China, which has a very big pent-up demand for diversification from the investors and we're talking about 30 trillion US dollars of savings pile, waiting to be deployed. And, the channels through which this money, you know, can you know, go out to the rest of the world to invest. I think it's still limited. I mean, we do have a stock connect franchise. We operate at the exchange, where, you know, we help channel that funding.

Now, if you look at the opposite direction, the rest of the world investing in China is massively, massively underweight. And why do I say that? It's the second-largest economy of the world. If you think about the market capitalization of the Asia market, which is currently being held by the rest of the world, it's a low single digit. We're talking about 3%. Compare that same number, say in the US market, which is 15%, region only Japan is over 30%. It just doesn't really make sense, especially as Adam alluded to, you are seeing all these new productive forces coming out, in full throttle, really.

In China, we're talking about artificial intelligence. We are talking about the chip space. We're talking about EVs. You know, when you say EV, we currently have seven EV company manufacturer listed on our stock exchange. In Q1 this year, they produced probably about 30% of the world's output of EVs. And it's just the beginning.

Remember, we are talking about around the world, countries which made pledges to be carbon neutral by 2050, 2060. The million-dollar question is how do we get there? How how does humankind get to carbon neutrality, if it is intercepted by all this globalization and fragmentation? It's very, very difficult. And so, I mean, going back to, Amina's point, we can have policies, we can have regulation. But at the end of the day, it takes capital markets, right, to really match opportunities and do the work as well.

If investors don't only pay lip service but actually put into that investment decision, green transitioning and how they should be deploying capital is so much more forceful than simply having the policy and the regulations. And so I think there's still a lot to do. And I do hope that as the world pivots towards Asia, we're going to hopefully see again globalization or re-globalization picking up momentum.

Samantha Vadas: You mentioned new productive forces. And a big part of that of course is artificial intelligence. Amina, I do want to throw it to you.

I mean how can technology and AI help in sustainable development moving forward because you can't have a conversation without talking about AI right now?

Amina Mohammed: No you can't. I mean, I was listening to conversation just now, its as if we're talking about two worlds.

Samantha Vadas: Yeah.

Amina Mohammed: A world that is still functioning and has to eat has an attitude to have a problem with China. And then a world that absolutely has nothing, is trying to catch up from the impacts of COVID. And then we bring along artificial intelligence.

At the UN, the summit of the future, 75 years later, we are trying to put in place some of the guardrails of the potentials of AI. And that's difficult because it requires a multilateral conversation where everyone comes in seeing the good in this and the worthwhile to put in the checks and balances, to make it work. There are huge potentials for education, health, opportunity in the food systems to catch up, energy.

But all of this will require a world that is going to ensure that this closes a gap and doesn't widen it. And I'm just listening now to what is, available. What are we investing in? The infrastructure in much of the world population, the demographic that's actually going to help us grow and become more inclusive doesn't have the investments.

And so I think with AI, we need to think, scratching the surface, huge potentials. But is the wherewithal, the political will – I actually think is a political will to bring everyone to the table, to share, to see that the potentials of this are going to work for everyone. I'm hopeful because I think that some of the discussions we're having now about how we will utilize that and what sort of governance will be in place to give everyone a fair chance, are progressing.

It's tough but they are happening. And I think the investments will be there if we can find much more of a narrative that shows you what that will be for to include everyone. I mean, it is two worlds we're talking about right now and it is fracturing even more so – the conflicts, the climate crisis that we're all facing are realities. These are not going to be drawn up in boardrooms, to try to protect yourself. They will cross borders.

As we've seen, we have some atrocious conflicts that have become frozen. And then we have new ones, and they are gaining ground. We have climate change that just crosses, borders. And we are having to invest in that. In fact, we're seeing many of the instruments we have no longer work. But with AI but with, again, looking at the financial markets, access to the fiscal space that's needed for many of our developing countries, we can make that happen. We can make it for good.

Samantha Vadas: When you talk about borders, it just reminds me all the time of Neil deGrasse Tyson, the astrophysicist in US, who always refers to that Apollo mission where the astronauts went to the moon and they look back at Earth and they said, it's just one world. Why do we have all these borders and all these disagreements? If only everybody could have that cosmic perspective. Maybe we will, because we're trying to get to the moon. We've seen Elon Musk try to do it. So let's see.

But to put a sobering statistic on what you're saying, I mean, this is a UN trade and development body report, FDI falling 2% to $1.3 trillion last year amid what you cited over at the UN. Global economic slowdown and rising geopolitical tensions. The drop sadly also partly down to concerns over greenwashing, another buzzword that we tend to hear. This is obviously a practice to make things seem more environmentally friendly than they actually are. At least that's the perception.

How do we overcome this? I'm going to put it out to all of you. Yeah. Adam.

Adam Tooze: I mean, I think. As serious as the implications of this move are, I think it would help if we were realistic about the trajectory that we're on. Yeah and 1.5 degrees was mentioned earlier and we all know why 1.5 degrees is a totemic marker. Because for many of the vulnerable small island states and the most vulnerable communities that will be most exposed to the climate shock, this is an existential number but we are not – not even close – in no imaginable world going to get to 1.5 degrees stabilization. It requires a crash landing of emissions in, notably China.

Basically, you have to start switching off coal-fired power stations today, not build any new ones. And we know that's not the trajectory. And that's just one piece of the global puzzle. It would require the United States to terminate all new fossil fuel investments, which they continue to do on a large scale. It's not happening. We are on track for a 2-degree world.

Best case 2 to 2.45, more realistically. So that I think would orientate our strategy in a more realistic way. And I think that will, generally speaking, be helpful for the coordination of the crucial adaptation investments that are necessary and to begin to think the very hard, in some cases, tragic conclusions of that outcome, because we are going to be dealing with very large scale population displacement.

A very large swath of Central Africa will become uninhabitable. Large parts of the subcontinent of Southeast Asia will also become very stressed to live in. We need to be preparing systematically for that scenario. And to my mind, as grim as that is, it might also be the kind of agenda around which you can actually rally serious commitment. Because whilst you remain attached to what are, in the end, desirable but I think wishful fantasies, the whole thing has a feeling of greenwashing, whereas if we actually focus on the real scenario, the serious compromises that have to be made and they are serious enough to get us to 2-2.5 is still a historic transition.

For China. It's a hairpin curve. It just needs to start with their next Paris commitments next year. To take China down. That, I think would help us, move us into a more realistic space. And I think it would be honest and we would be actually speaking then to the people. Communities should be able to register the consequences of that for their community and begin to claim the compensation and the investment that would be necessary to see them through this transition because otherwise, it's going to hit us, it's going to hit us without adequate preparation. And that's completely irresponsible since we all know, actually, that's the trajectory we were on.

Samantha Vadas: Minister, I'm keen to hear your thoughts from an emerging markets perspective.

Faisal Alibrahim: Sure, maybe two quick points. First, I would go back to your view of the world. I think this low growth pattern that the global economy is witnessing is coming for many reasons but one of them is there's a shift in the pillars of power. And just one example.

Economically, China went – and you alluded to it in the beginning, Sam – went from producing at low cost and high quantities to being one of the most sophisticated, scientific powers, research powers and also a source for technology needs, even for non-China based, non-Asia based manufacturers, even in Europe. And talk about EVs. The response to this coupled with the the world of global geopolitical tensions, is policy. And these policies, while some of them could have been for good reasons, have put some brakes on free trade, which is very, very important.

I think Adam said goods will continue to be traded but some are concerned that even the free flow of ideas and people like we've seen in the past few weeks could be, challenged as well, especially ideas and innovation. Also, investments, whether for the right thing, for the right reason, for the wrong reasons, some decisions were made globally that really made people weary or lost trust in some of the investment decisions that they could have easily made in another time or another dimension. So that's important.

One thing Saudi has even been working with the global community is to make sure that some of these decisions don't affect global investments globally. So, global investment deployment globally. So I think, that the good news is these are policy actions. And that for us to solve some of these challenges, we can go back to these decisions. Markets are important. I think, like Bonnie said, this is the most efficient approach. Governments will still intervene. But if you isolate, where do they intervene? With encouraging research, encouraging innovation. Catching up with, the global economy here and there. But the other interventions should be and maybe even security.

And also, if you keep in mind, security without dialogue looks much different than security with dialogue. So dialogue and communication engagement is very important. But that's on the one side, meaning we need to, revisit our policies. If we're solving for the globe, for the global economy, our decisions would be different. If we're solving for that pale blue, blue dot, our decisions would be a little bit different.

But, going back to your question, I think it's important to have an inclusive approach to these solutions. I think just focusing on one set of solutions and having a very ambitious target is not realistic. And we're seeing reality hitting the headlines. Even, the newspaper headlines who are voicing towards these targets for us to have a better chance at achieving these targets, we need to have an inclusive approach. We need to balance energy security with, giving fair access to the global economy, to these energy sources in a clean manner. And also, development.

We need to give energy security, energy, climate action and development. These three forces need to be balanced out. Saudi is playing a role in that example. We are one of the cleanest, if not the cleanest hydrocarbon, conventional hydrocarbon energy producer. We were also one of the leading and to be leading renewable energy, players, whether we're talking about green hydrogen, we're talking about solar, wind. We are the cheapest now in the kingdom for other sources?

We're doing it for two reasons. One, the kingdom is a global citizen. We're at the frontline of the risks, we're in the most heat stress, drought-stressed, one of the most heat-stressed, drought-stressed areas in the world, will be the first affected. Our capital will be directed to not only addressing the challenges of this and leaving our economic development behind but also supporting, other challenges globally.

So we don't want to be in that position. We want to be a position where we continue our diversification story. We play a big role and in that regard, I think collaborating and focusing on innovation and solutions that are more inclusive can get the global community to solutions that can address and abate some of these challenges.

Samantha Vadas: So it starts with us, people.

I do want to ask, and I'm going to throw this to the entire panel. What are we thinking in terms of how elections this year are shaping growth? Because I think, as Time put it, it's not an election year. It's the election year. Globally, more voters than ever in history will head to the polls in at least 64 countries, about half the world's population.

So do any of you have any thoughts in terms of how you're looking at this in shaping global growth and some of the decisions that are being made when we talk about, as you say, Faisal, and Amina inclusivity.

Amina Mohammed: I think the politics of the world today is probably one of the biggest challenges we have in terms of predictability. And we're all focusing on the next election and yet the world has to go on. And so back to what Faisal has said, you need the political will regardless of who comes into office. And I think the world is very good at adapting to different sorts of leaders. At one time, I think we all looked to Africa and thought these are bad leaders. Now, there's no monopoly on that is there?

And what we really need to do is to get the political will to the point that 1.5 may not be within reach. And I think we've said it's an emergency care. But it's very focussed, the G20. Just go to the G20, where over 80% of the emissions are in. The decisions have to be taken where finances move and try to get something agreed in that, in that body. It's G21 today but I'm wondering if the extra one of Africa, people understand that that's 54 countries that have a huge debt crisis for those in and that's looming but no solutions to it.

So, soft landing for some places but pretty hard landing for many others. So when you talk about elections in Africa, against all odds, we've seen some take place that we did not think we would get the leaders that are needed to. So there will be some stability in some of those countries. We thought that would not, more importantly, will the powers and the political will be there for us to put in the governance that's required to have access to the financial markets and to do so at the scale at which we need that to happen. And will we be able to do much more investment in adaptation, move those resources we have in the multilateral system, so many instruments, so many negotiations have gone over the years but no commitment to them.

And so coming to discuss what else do we need? I'm not sure it's for want of tools but it is the political will. So elections this year, I'm sure that many are looking to perhaps our host. But also in Europe and we are seeing I think, some pretty stark realities which make us question what is it that people are voting for? Is it being left behind even in the most developed of our countries?

And so I think we need to be listening to that and including more and finding ways of inclusive economies, providing the jobs, giving youth some hope that – the new champions, I hope, will be the next generation and won't carry our baggage into it and hopefully redefine what democracy looks like. In terms of the models that we will use going forward.

Bonnie Chan Yiting:: Yeah. Well, I think I mentioned it earlier, capital markets in my view perform the best when it can operate agnostically regardless of politics. But unfortunately, and this year, you know, "the" election year, it gets into the conversation I have and I live it every day, right, people timing that deal around elections. "Oh maybe we should get everything done before November." Right. Because God knows what's going to happen. Right. And this is the kind of conversation that, that we are hearing a lot.

But if I may go back to your earlier question on greenwashing and the minister mentioned that we need more dialogue, more communications. I actually feel that the world needs more, well, needs to get to an agreement. Okay. And why do I say it? You said it. Well, we should take a cosmic view. It's one world, after all. And when it comes to the topic of green transitioning, it should be something which is built on a global agreement. And if we have that, then greenwashing wouldn't have that much of a chance.

Now, unfortunately, even on the topic of climate disclosure and I had this conversation in January at Davos, the world had taken so long to get to an agreement and we're still just beginning to see, for example, a broader, adoption of the ISSP disclosure framework. But, you know, it's quite late in the game already if we are serious about all these net zero targets.

And so I feel that we do need that agreement to form quickly. We do need people to sing from the same hymn note in terms of how they want to sort of capture this data in terms of climate disclosure, without which it's very easy for greenwashing to thrive because you give people that opportunity right to manoeuvre through the grey area.

And so I do hope that now that the adoption guide has come out from the ISSP, we will see more momentum. But it is a complex topic and I do agree with Adam that maybe it will help if the world can set more realistic goals. I mean, take for example, all this talk about Scope 3 disclosure or which talks about the supply chain, it actually can give rise to a lot of inequality.

When you are eventually seeing big corporates around the world potentially ditching weaker players because they are unable to provide the Scope 3 information that these very powerful corporates need to fulfil their mandatory disclosure requirements, that's when we potentially see even more inequality emerging.

Samantha Vadas: Adam, do you have some thoughts on this?

Adam Tooze: I think this issue of elections and business and growth that you raise is profoundly difficult, right? Because there's no way which we can pretend to ourselves that business-driven growth and electoral democracy, especially in its more popular variants, are natural bedfellows. There is an inherently tense relationship between a situation in which a firm employs 40,000 people and a situation in which those 40,000 people get to go to an election and vote for the people that are going to govern them and set terms under which that business then operates.

And so for this relationship to work as it has very successfully in some of the richest parts of the world, it requires very, very delicate balancing act on both sides. And since this is a business meeting, maybe we just focus on the responsibilities of business in that context. And that is to take a long-term and comprehensive view of what makes the best situation for development of all of your stakeholders.

Does the government that you or the parties that you support, do they create, for instance, we talk a lot about inclusion, the prospects of comprehensive inclusion of the entire population. Or are they offering narrowly sectional quick giveaway tax cuts? Right. Is that the kind of government that you want to work with where you can see the upside? On the one hand, you pay less tax. On the other hand, it may not create an environment in which actually your workforce can be stably engaged in the community and secure a decent standard of living for themselves and their families.

You might like, on the one hand, the government that soft pedals green policy, but in the long run because it makes it easier. Less regulation, less reporting. But in the long run, you've got to ask yourselves, where do you think the world is moving? And if you think it's moving towards a green energy transition, then you want a government that raises the bar for everyone so that everyone has to play at a higher level, and you are disadvantaged and you are all involved in a race to the bottom right.

These are the kind of calculations that responsible businesses and responsible capital of again and again engaged in when they've entered into this inherently difficult bargain. And that is the historic responsibility of capital in places like Mexico, the United States and large parts of Europe in this moment. Where do you take the quick, easy hit, the sugar high? Do you do the knee-jerk thing, which is resist the leftist government because you didn't vote for it and no one you know voted for it? Or do you think in the longer term about what your country needs in terms of social inclusion, broader horizons, a broader perspective?

And there's no easy way out of here. There's nothing that can remove the responsibility of leading figures in any community and making that kind of choice, all public figures in speaking. Which is why I'm choosing to say this right here, right now, because I can't sit on this panel and not say that. What's happening in Mexico right now is quite shocking, I think. The way in which business responded to a left-wing government with a very large mandate in a state of panic, headless chicken mode. Oh my God, they're going to destroy the country. This is not a responsible way to react.

I am worried about the way in which business is lining up in the United States right now, in an election which many of us know is not just about American democracy, it's about the American Constitution and it's about the order of the world. And nevertheless, I see a lot of people making short-term bids on lower taxes, less regulation because that'll be good for me. These are the sorts of questions which anyone responsibly engaged in business worldwide, in their own context and its specific historical setting by historical setting because in the end capital is a crucial driver of world history.

But politics counts. It's why China is the way it is. It's why Europe is the way it is. The United States is the way it is. It isn't because of different business communities. It's because of the radically different politics and history and legitimacy that derives from that history. And you have to reckon with that as responsible people engaged in business on a global scale.

Samantha Vadas: We've got three very short minutes to sort of talk about other things before we do throw it out to the audience. If you do want to ask some questions, perhaps think of some now. But when we talk about who's heading to the ballot boxes in all these elections, we've just seen India, for instance, have a mammoth election and record-breaking female participation in that.

Amina, you've spoken out certainly about this: a lack of women at decision making tables around the world, hindering progress when it comes to tackling conflicts and improving health and the standard of living. And of course, in Saudi Arabia, you're having a number of policies where we've seen more female participation in the labour force. I want to talk about that and unpack some of these themes a little bit more.

Faisal Alibrahim: Sure. So maybe before I get started, two more – I'm saying everything in twos, I also had only two hours of sleep. So apologies.

Samantha Vadas: And you got two minutes very quickly.

Faisal Alibrahim: I'll try to be shorter I think on this. Yeah, as you said, 40% are heading to vote. I think if this was any other year, it's fine. But it adds to that vacuum of political will or decisions or clarity. And in the world where some of these countries don't have that grip on long-term planning and long-term delivery, it's always fluctuating.

You see a lot of wait and see from investors from the business community. Couple that with, for example, the Fed's decision not to take action on the rates. It just affects some of these countries, very much so. A lot of people are connecting these things. And I think for us it's just something that we need to continue to observe and then, continue to see how these will evolve. It's just, I'd say, unfortunate that we're seeing that vacuum in this year altogether at a time where you need a lot of, will and decision-making.

On, I'd say going back to an agreement, I think plans are useless. As Eisenhower said, President Eisenhower said and planning is everything. I think it's there's no shame from learning from our lesson, from our experiences and going back and putting realistic objectives and working together towards that. That's what happened with the Millennium Development Goals, the Sustainable Development Goals.

That's why I mentioned, the Saudi, we're doing a lot of unlocking potential. There's things that we know we have to do but there are things we decide we should do in a certain period and work together towards doing. On the social policy side, in the Kingdom, female labour force participation has doubled. We've achieved our target of 30%. Now we're at 36%. It's a very important for our economic, development story, for our social development story. We're working with, all of our partners from around the world to share some of these lessons. We're also chairing the appropriate committees today on women rights and the gender gap, we're deep diving how we can work towards addressing some of these challenges both locally and in general, globally.

Women in tech went from 7% to 35%, and around 40 to 45% of small and medium-sized enterprises. Even the innovation- driven ones today are owned or led by women in Saudi. And I think we're really scratching the surface. And that inflow of women into the workforce is what's kind of putting pressure upwards on our unemployment numbers, despite the fact that we're at some of the lowest numbers since recording statistics in Saudi.

Amina Mohammed: Well, I think we're getting women in places that we've never seen them before, certainly in the United Nations. We see that in our management with 50%. In the leadership in countries where we represent that footprint 50%. But ultimately, you need to see leaders in the P5 where we have women, where the decisions are taken, where leadership can be seen, to deliver on.

By the way, we have agreements, we have lots of agreements and we have archives of them. And the last one in 2015. Every year we have targets that we set. And these targets, if we had paid any attention to them, invested in them and seven years ago on the SDGs, we perhaps would have been closer and we would have had a more, a better response to it.

Same with the 1.5. I mean, the agreements are there but we are not implementing them. And I think that if we had the opportunity of putting women in those decision-making roles beyond I think it's a political one but we're not voting them into office. Right. Because when I look at the panel that says, let's bring the heads of state and government in, very rarely will you get a picture of any women in it. And then everyone says, well, we need to see more women. We need to vote women into office. And by the way, women, you need to vote women in and young people need to vote women. And this is not just going to happen because we say so.

That's why I hope that in some of these really difficult elections, we've seen a woman come in Iceland and Mexico that we will continue to see more, do that and then, move. But I will agree with Faisal. It has to come from the bottom up where you get the pressure and then eventually as I hope to see from in the UN that we'll finally get a woman in charge and let's see what multilateralism looks like then.

Bonnie Chan Yiting: Yeah. So, in Hong Kong, we did a simple but important step. We basically, at the stock exchange, mandated, two years ago that we're going to stop single gender boards for all our listed companies. We have 2,600 of them. At the beginning of the journey, there were about 800 companies, which still had an all male board directors.

And in less than two years time, we've driven that number down to below 400. Okay. Which, has to come to zero by the end of 2024. So, we are now really putting pressure to solve the remaining 400 companies. But the importance of that is, I think we're all in agreement already that diversity in the boardroom is important. You know, so that when you look at a problem, you have different views and you come up with a more, fulsome solution to that problem.

And therefore, you know, we're doing that little step. But nonetheless, I think it is creating a lot of very good momentum in Hong Kong and I should say, that in the financial services industry in Hong Kong, which is not a big place, we have a group of over 50 female CEOs, which is, I think, quite impressive. But more to do, more work to do there.

Samantha Vadas: It's a very positive statistic in female leadership. Thank you so much for that. Bonnie.

Do we have any questions from the audience. Yes. You in the middle there. In the blue.

Audience member: Thank you. I'm the journalist from the paper and I would like to ask Minister Alibrahim about the AI development in Saudi Arabia. We know that Saudi is increasing its investment in AI. And I would like to know what Saudi's plans and action to become the leader of this area.

Also, it cannot avoid that there will be a great power competition in this field. And we notice Saudi is currently taking a long alignment position but is also facing some external pressure. So I would like to know, how would Saudi do or play in what's rol will Saudi play in this process. Thank you.

Faisal Alibrahim: Thank you. So I think, well, the Kingdom was looking at this from three different, I'd say, angles. One, as an investor, obviously you want to make the right investment. We are responsible for, as a government and the sovereign wealth fund, investing capital for future generations but also for returns to support the economic diversification agenda. That's one.

Two, as a power user, we want the public sector, the private sector, NGOs in the Kingdom to be able to, because of policy, because of the right regulation, be able to access generative AI and other forms of AI as they evolve over the next decade or two for our work, policy making, decision making and businesses as well.

And number three, as a platform, we think the kingdom has a lot to offer. We can talk about it but it has a lot to offer for players from around the world to set up shop and accelerate the advancement of artificial intelligence. One thing we're really keen on and we've been working with the Forum recently on is this global governance.

The kingdom recently joined the Artificial Intelligence Governance Alliance. We specifically launched an inclusivity initiative. If AI isn't going to be accessible by developing countries, over by the whole world altogether, the gap we have from an economic point of view, from a capability point of view, institutional capabilities are the reason why economies become more complex, are the reason why countries perform better. One of the main reasons. And if AI comes in and it's not really accessible by everyone, that will create a big challenge and even exacerbate the challenges we live in today.

Samantha Vadas: Yes.

Audience member 2: Thank you. I'm from China news service. I have a question about the green, energy transition. We know that, a lot of countries are, looking for business opportunities in this green field. But we also see that there was some trade protectionism is rising around the world.

So I would like to ask, our guest, what will this impact the world economy, growth in the future? Thank you.

Samantha Vadas: You want to go first?

Adam Tooze: If I may. I mean, I think the frustration with the protectionist moment is easily justified, right? I mean, it's an extraordinary situation we're in which China's very intensive green industrial policy, pursued over more than a decade now, has produced the cheapest sources of power the world has ever seen and has actually cracked affordable EVs. And the reaction of the West is what? It shuts its markets to those products.

The best justification that can be offered for this and I think it's important to understand it because it's a genuine dilemma – and I know policymakers both in the US and Europe are agonized about the choice they're making – but the justification they offer is to do with politics, which is that if the green energy transition essentially becomes identified with China Shop 2.0, in other words, with an "invasion of cheap Chinese goods," it's poison in the democratic system.

For the momentum of the green energy transition, there has to be a degree of localization. Otherwise you can't build and solidify the very fragile political coalitions around the energy transition in contested, pluralistic, difficult, often quite irrational democracies. And since these are countries both the United States and Europe, now with substantial bodies of climate scepticism abroad and in the United States in one party actually dominant, this is a real concern. And that's why the compromises are being made. The grand bargain that's on offer here is some sort of reverse China deal. So do the JVs this time in Europe and the United States and allow them to steal the old technology rather than the other way round, and everyone will be happy?

That, I think, is the way that this logic works out and in fact, I've heard senior German decision-makers say exactly that in exactly those words. Right? If we invert this, if we do it the other way round, maybe there's a deal to be done. And I think that is the way to go and that bargain is the one to drive for is okay, what do we need to do to get over this? If this is your local political bargain, how do we get to terms which work for both sides? Yeah.

Bonnie Chan Yiting: I absolutely agree with that. And I'm seeing it, playing out. So EVs for example, Adam mentioned it's very affordable. What China has managed to produce and the technology is good. So all this debate about overcapacity or not, I think can continue as a debate. But the business reaction to solving that is, you know, let's pursue the China plus one strategy, right?

Let's go to those countries in Europe, in Southeast Asia and the Americas and build a factory there. You know, create jobs in the local economy, contribute to local GDP and do a little bit of technology transfer. Maybe that's going to crack that difficult. Not but yeah, absolutely. That's what we're seeing in the front line.

Samantha Vadas: Yeah, it's very interesting how the EU is taking a very different approach, much more nuanced than, say, what we're seeing in the US. Perhaps that opens the door for more negotiations to see what is more mutually acceptable. Another question. Yes. Here at the front.

Audience member 3: Thank you, Excellencies, for your time. I'm [unidentified name], global shaper from Bahrain.

So I have a question. When does a country or a government decide on local, technology, technological development and production and when does it decide to import from other larger economies.

Faisal Alibrahim: I'll take a stab at this. I think the "make versus buy" question is something you have a clear view on from the beginning. It makes your agreements, your negotiations, your position clear with, I think, where do you have a competitive advantage or where do you decide to build a competitive advantage. That's where you need to make. But, otherwise importing is more efficient. And, that's a question that's always, the answer is always evolving.

EEspecially when you talk about technology, it's more challenging because technology is evolving very fast. We've seen with China started where it's become an exporter of technology despite the restriction. I mean, EVs, just to go back to the previous question. So, China's provided the world with a solution towards some of our climate challenges and the world responded with a heavy-handed response that kind of said, no, maybe we don't want to go that fast towards but that revealed some of the inconsistencies we have.

I think continuous discussion internally at a government level, when do we want to develop capabilities in competitive advantage? And even if we invest and subsidies need to be with an end game, they can't be just very open-ended and then continuous dialogue with partners.

Samantha Vadas: Yes. This lady at the front.

Audience member 4: Yes. Thank you Excellency, from Imperial College London.

My question is, for the Summit of the Future, what are the opportunities does the summit offer to address the gap and political will in terms of not being another set of negotiations that lack commitment, particularly for climate change but also for the political will to protect the health and security of the younger generation?

Amina Mohammed: Well, okay. No pressure, United Nations. I mean, we're going through the last stages of the negotiation. We will have an outcome and it will probably be more ambitious than we thought – 242 pages down to 20 is a big deal in the UN.

But I think what it is providing for us, three outcomes that we think are serious enough for political leadership to buy into and to champion. One is that we really need to think about the peace, the new agenda for peace has to happen because the enabling environment for which you want to bring in your investments and grow economies will not be there unless you can do it. And that, I think, is one where the governance question in the United Nations and how the world runs itself will be a big one.

But it's not the only crisis. The enabling environment is also climate as well. And we have to take a lot of political decisions.

The other two pieces are about the international financial governance. And unless we look at that and we find ways to agree that this is not just about the US or the G7 and China, it's about a whole lot more. There are 8 billion people on this planet and there's a lot of work to be had to mobilize those markets and those people. And I think that's happening, it's, we're talking about North-South right now but quite frankly, there's a lot going on in the Global South.

South-South is going to become an alternative. If we don't get that right or the financial markets. People are already saying to us, well, we're dealing and speaking in different currencies today. We're no longer just about the dollar. And okay, maybe in the short term we will not see that makes any difference. But you know what? In the longer term, it will signal a difference and people will do things differently.

The third and I think the last one is again, the new technologies. The new technologies, the governance piece is important. And how we move forward of that. But I think the discussion that hasn't really been had and at the summit of the Future, I hope that this is what we will begin to start, is how this will transform societies. This is not just about tools that will improve the way we manage healthcare education industry. It will be about the way we should transform societies.

And here this intergenerational conversation with young people, the new champions of the world that will change, including our democracies. Everything will change. We had a conversation not too long ago with a Bayesian gentleman that invented the first search engine, Archie. And I asked him, hey, tell me, so what do you think about this? And he said, well, it's really exciting. It's scary and we're not ready. And so asking him, so what do we need to do to be ready?

And I think that those are some of the discussions that will come out of the Summit of the Future. But again, it is about the world coming together. But that world as we hear the voices on the floor, will the powers lean in? And give us another chance at that one world that you see from the moon?

Samantha Vadas: Yes. Ameena, you have summed it up so beautifully. You've sort of done my job as a moderator to sort of, pick out the key takeaways in terms of, what we've concluded here today.

But I think, as you say, you know, we need to take a realistic approach to what we're seeing here. Agnostic, you know, despite some of the elections that we are seeing playing out, the political noise, the geopolitics, etc. I think, obviously, we need to revisit policies, as you've been saying and make it more inclusive, in terms of that approach.

Thank you so much for your time today, guys. Adam, Bonnie, Amina and Faisal. And, thank you so much to the audience for joining us today for this very meaningful discussion.