A Word from the Founding Chairman

Gil Rémillard

Founding Chairman,

International
Economic Forum
of the Americas (IEFA)

The 23rd edition of the Conference of Montreal, which wrapped up on June 15th, was a huge success. In fact, it drew over 4,000 participants, including 210 speakers and 60 international delegations, who met over the four days to discuss topics revolving around the central theme, “A New World: Managing Change.”

Let us begin by mentioning the ambivalence felt by almost all the speakers: they were all truly optimistic about the global economic situation, but this sentiment was tinged with much uncertainty. Yes, the indicators are positive, as confirmed by the statements and decisions of the Central Bank governors. However, the international geopolitical situation and the serious ramifications of the 4th industrial revolution are making investors very cautious.

The same questions lay at the basis of all discussions about the global economy:

  • How far will the populist movement that is springing up in every part of the world go?
  • What consequences can we expect from the resulting protectionist reactions?
  • How will protectionism impact economic globalization and free trade?
  • In view of this situation, how can we make globalization more inclusive in order to give it new momentum?
  • How should we deal with the radical changes brought by the 4th industrial revolution?
  • Will we be able to preserve and develop the consensus reached with the Paris Agreement on climate change in the coming years?

Those are all questions that were discussed in straightforward language—something the participants greatly appreciated. Accordingly, while the dialogue expressed confidence, it also expressed worries, and in some cases, it must be admitted, the fear that accompanies such worries.

We are all living on this planet and we are all faced with the same dilemma: either we shut our eyes and tell ourselves that, some nine years after the Great Recession, all is well; or else we take a hard look at the changes to make sure that we properly understand them and are taking the right steps to manage the problematic situations they cause.

First of all, it seems increasingly obvious that a new world map has to be drawn, both socio-politically and economically, as a result of the digital revolution combined with an energy revolution and a communications revolution. All this constitutes a fourth industrial revolution which is forcing us to substantially change how we think and how we do things.

A number of speakers pointed to a lack of vision and leadership for facing this 4th industrial revolution, but without laying any blame, because to governments and international organizations as well as the private sector and individual companies, the picture this 4th industrial revolution will ultimately paint is anything but clear and obvious. The pieces of the puzzle are tiny and we don’t have a picture to show us how it will all look once it’s been assembled.

For instance, artificial intelligence will change our lives, but how far can we take it without losing control of the machines we are creating? And man created the robot . . . ! That is all well and good, but beware of apples . . . .  Remember the story of Adam and Eve when the world was first created which, when you think about it, contains a very wise message. It is in this vein that, at the start of the Conference, Thomas Friedman, author of the best seller “Thank you For Being Late,” told us that things are moving so fast we are courting disaster if we keep on this way.

Corporate CEOs also expressed disquiet about their duty to develop new norms of productivity and competitiveness within their companies without knowing all the impacts. We made our choices, they say, but how can we be sure we chose the right innovation and how should we manage it to make it truly profitable in a world where every sector of activity is under­going profound change?

As an example, many speakers referred to the retail industry and the closure of many businesses and shopping centres as a result of online shopping and home delivery. Others cited the end of overseas manufacturing with the advent of in-house 3D printing and robotics, leading to a significant drop in international trade and maritime transport.

Many members of international delegations underlined the huge consequences this has for developing countries and for China in particular, which up until now has been viewed as the world’s manufacturer.

The end of oil and gas due to the shift to renewable energy, especially solar power, will also have very serious consequences and will hit the economies of producing countries very hard, including many that depend essentially on this resource. All this, of course, while being conscious of the dangers of cyber spying and computer hacking, which can become veritable forms of commercial terrorism and can seriously impact a company’s competitive position, even its very existence, by disregarding intellectual property rules.

The same goes for the consequences of climate change and its reper­cussions on agriculture and health, which also affect developing countries a great deal. This year, the Conference highlighted the big health questions that arise as a result of pollution in all its forms. For instance, every day, the risk of a new pandemic that will be resistant to our current antibiotics seems more and more imminent. How should we address this? It is hard to rely on a consensus to answer this admittedly agonizing question. Many speakers said we must stop producing just for production’s sake, and consider the real consequences of what we are doing, primarily when it comes to health.

Yes, the Titanic would have had a good crossing had it not gone so fast and run into an iceberg without having time to take evasive action. While it is true that a shipwreck may be elegant, with an orchestra playing on the deck right up to the last minute, the ship will still go down to the bottom of the sea, along with hundreds of passengers. Some of the lucky ones will watch the scene from the lifeboats they’ve been able to spot or appropriate in time by various, sometimes questionable means, but which save them from drowning nonetheless.

A major conclusion must be drawn from the discussions of this 23rd Conference: we cannot continue to pursue growth based on privilege. Inclusion remains, as was mentioned a number of times, our big challenge. This is why the 23rd Conference gathered together, under the auspices of the Francophonie and its secretary general, Michaëlle Jean, the secretaries general of the Commonwealth, Patricia Scotland, the Ibéro-American General Secretariat (SEGIB), Rebeca Grynspan, and the  Comunidade dos Paises de Lingua Portugesa (CPLP), Maria do Carmo Silveira. The four secretaries general, who represent more than 60% of the world’s countries, launched the “Appel de Montréal,” calling for a new international humanism based on inclusion.

The four secretaries general will meet again at the Conference of Paris on December 8th for the “Engagement de Paris,” where some very concrete plans will be laid out for the development of such a new international solidarity. Particular reference will be made to the younger generation which must, throughout the world, enjoy a proper education and training offered by universities that are more accessible.

Accordingly, a warning was issued at the 23rd Conference of Montreal, in order for us to deal with change while maintaining a prudent cruising speed under the circumstances. Let’s look beyond the positive economic indica­tors. Above all, before climbing aboard, let’s beware of ships that are characterized as “unsinkable,” and of course, let’s take note of where the “lifeboats” are.  We know from the start that there aren’t enough of them to allow all the passengers to leave the ship. So it’s best to keep an eye on them . . . .

It is therefore obvious that the global situation calls for great prudence on the part of investors. Here is another important conclusion that cannot be avoided, since the question must be asked: could there be another recession and are we ready to face it? The answer to this question was unequivocal:  yes, there will be a new recession. But we cannot know exactly when it will happen; growth is good now, but its foundations are undermined by the great uncertainty that is more and more prevalent.

In the end, it all depends on confidence, which is currently holding steady. However, we still need to properly manage the changes presented by the unprecedented 4th industrial revolution of which we are the novices. Indeed, for the first time in the history of this planet, the changes are occurring everywhere, on every continent, and with the phenomenal development of communications through social media we can watch things evolve step by step. It is therefore very difficult to keep the uncertainties that are created in proper perspective. They can easily become amplified, in particular through the effects of “fake news” as some speakers pointed out.

Of course, taking a big risk is not better than taking no risk at all. But how can an investor differentiate between these two options? That is a question that sparked a lot of discussion, but to answer it properly we will have to wait for the next Conference of Montreal, to be held from June 11 to 14, 2018 under the central theme “A New Globalization: Managing Uncertainty.”

Meanwhile, we can analyze the issues on October 30-31 and November 1, 2017 at the Toronto Global Forum, where some 3,000 participants will receive key information from internationally renowned conference speakers. This year, the Toronto Global Forum will address the central theme “Redefining Globalization” and it will be the Government of Ontario’s economic forum for the 150th anniversary of Confederation. To underline the event, there will also be the first meeting of the association of those who have left Ontario to pursue an outstanding career elsewhere.

The Toronto Forum will be followed by the first edition of the International Economic Forum of the Americas – Conference of Paris, to be held at the OECD Conference Centre in Paris on December 6, 7 and 8, 2017, under the central theme “Reshaping Globalization.” This first edition of the Conference of Paris will lay the groundwork for a forum which, every year, will discuss the major issues surrounding economic globalization.

We look forward to welcoming you to one of our upcoming events in 2017 and 2018:

  • The Toronto Global Forum; the 11th edition will take place October 30 - November 1, 2017; Redefining Globalization;
  • The Conference of Paris; the 1st edition will take place December 7 - 8, 2017; Reshaping Globalization;
  • The World Strategic Forum, held in Miami; the 8th edition will take place on April 16 - 17, 2018; Leading An Era of Change;
  • The Conference of Montreal; the 24th edition will take place June 11 - 14, 2018; A New Globalization, Managing Uncertainty.