President and CEO,
International Economic Forum of the Americas
The closing session of the 24th Conference of Montreal on June 13 was a fitting end to a day that focussed on climate change and innovation. The main objective of the International Economic Forum (IEFA) is to organize events that help people better understand the major international economic and socio-political issues of our time. The remarks made at that closing session by Ban Ki-moon, 8th Secretary General of the United Nations from 2007 – 2016, were especially relevant in light of that goal. Speaking about the Trump-Kim summit that had taken place the day before in Singapore, the South Korean statesman called the summit “historic,” but added that we would have to wait to see whether or not it would have a decisive long-term impact on global security.
Aside from touching on that crucial development in world politics, Ban Ki-moon spoke about some of the memorable events that had occurred during his term as UN Secretary General, starting with the Paris Climate Agreement and the implementation of the United Nations’ seventeen Sustainable Development Goals. His speech was certainly a fitting conclusion to the 24th edition of the Conference, whose theme this year – A New Globalisation: Managing Uncertainty – was particularly apt. The two Co-Chairs – Orit Gadiesh, President, Bain & Company, and Afsaneh Beschloss, CEO, The Rock Creek Group – set the tone for constructive discussions reflecting a world eager to embrace a new era of more inclusive and more sustainable growth.
When will the next recession hit?
One major finding that emerged from the three days of in-depth discussions is that we are living through a time of profound economic, financial, political and social anxiety. Remember the sharp decline in stocks that sent shockwaves through the financial markets on February 5? Should we be worried that, ten years after the Great Recession of 2008, a new economic crisis is about to hit? Several speakers confided that they were concerned about what could transpire in the next three years. The sizeable debt in developing countries is just one of many looming crises, as is the situation in Argentina, which recently avoided disaster thanks to a bailout from the IMF (International Monetary Fund). That said, the economies of industrialized countries, foremost among them the United States, are doing well. This gives us reason to hope, despite increasing concerns about growing levels of household debt and wages not keeping pace with economic growth.
This leads us to ask what will happen to employment and inflation levels, and what the reaction will be from the central banks, which are left with very little room to manoeuvre. The banks’ response, in terms of their interest rate policies, has been by and large positive.
A challenging geopolitical environment
There has been a significant change in the potential impact of various global geopolitical events on both regional and global economic development. Add the global trade war to an already tense international climate – a war which appears increasingly likely, given the threats uttered by President Trump – and, according to the analysts and business leaders who spoke at the Conference, we are in an extremely troubling situation.
Another pressing and fundamental question that was discussed at great length is: given the current political context, how can companies realistically integrate risk assessment into their investment decisions? The conclusion: that companies must be prudent, and analyze the geopolitical implications of each project before proceeding. Small and medium-sized businesses wanting to better understand a given region’s geopolitical realities before investing there must rely on assistance from government agencies, where available.
The Impact of 3 Big Revolutions
Like the previous year’s program, this one focused on three recent revolutions that have radically transformed the way we think and behave:
- First came the digital revolution, in which artificial intelligence, 3D printing and robotics ushered in the fourth industrial and commercial revolution;
- Next came the energy revolution, in which sustainable energy sources, including widespread use of solar energy, are becoming the world’s first alternative to polluting fossil fuels;
- Last but not least, we have the communications revolution, which enables people worldwide to be in immediate and direct contact with each other, primarily through social media. This revolution has also provided almost infinite data storage capacity, which raises both privacy concerns and questions about e-commerce, and how online shopping will force large retail chains to adapt.
Many speakers also pointed out that, as predicted by Marshall McLuhan in 1964, the world has in fact become a global village. What the eminent Canadian philosopher failed to foresee is that the village would be split into neighbourhoods and, in some cases, even streets, that are increasingly aware of their different social, political and economic identities, and that this awareness would lead the different parts of the village to take a protectionist approach to economic, social and cultural policies.
Other speakers made a point of touching on the populist wave that is sweeping through all industrialized countries and is exacerbating the sensitive topic of immigration, both in Europe and the United States. As Deputy Attorney General of the United States Rod Rosenstein noted in his speech, world history is filled with instances of human migration, many of which caused problems and sometimes led to wars.
The existence of so many migrants who are seeking a better quality of life or whose lives are actually in danger is a blight on humanity. As several speakers pointed out, we cannot find a solution that respects both the fundamental right of States to control their borders and the dignity of these uprooted peoples without a concerted international effort to resolve the problem of human smuggling. On a more fundamental level, this problem brings us face to face with the need to build a more inclusive global economy based on free and fair international trade.
From trade disputes to a more inclusive globalization
Several speakers emphasized that the positive state of the global economy has enabled us to work towards achieving more inclusive economic growth. However, given the uncertainty generated by current complex trade disputes, both governments and the private sector are struggling to make significant progress on addressing the issue of inclusion. We cannot halt globalization, but we can distribute its benefits more equitably.
Understanding the big issues relating to the complex global economic and socio-political situation is a daily challenge for both public and private management. That’s why David Rubenstein – co-founder of the Carlyle Group, one of the world’s largest private equity firms – emphasized the importance of making sure investors and also consumers continue to have confidence in the economy. It is worth remembering that they are the ones who keep the economy rolling, as long as we can manage to curb the kind of excesses that led to the 2008 subprime mortgage crisis.
Making strategic innovation decisions
Governments and businesses both large and small whose efficiency depends on investing in the right innovations need to have strategic information at their fingertips. Which technology will generate the highest ROI? Will investing in AI boost growth? A number of eminent experts and business leaders provided pragmatic insights and answers to these new management challenges that companies of all sizes must face.
In fact, all managers should be focused on making sure their company keeps pace with rapid technological and digital innovation. It was fascinating to hear Michael Evans, President of Alibaba, and Alexandre Ricard, Chairman and CEO of Pernod Ricard, talk about the growth potential of new technologies. Cyber security, a pressing issue in these times of increasingly bitter trade disputes that may even lead us into another recession, was also covered in some depth.
A resounding success
The 24th Conference of Montreal was a resounding success. Nearly 4,200 participants listened to some 189 speakers. Many international delegations came from different parts of the world to express their views and meet potential investors. During the event, Conference staff organized many bilateral meetings, and members of the public and private sector closed important deals.
The 25th Conference of Montreal will discuss Embracing Change
The Conference of Montreal Board of Governors met on June 11 and decided on the date and theme for the 25th Conference: it will be held from June 10 to 13, 2019 on the theme of Embracing Change. Two IEFA events will take place in the intervening months: the Conference of Paris, on October 2 and 3, will discuss the theme of Reshaping Globalization, Mastering Change; and the Toronto Global Forum, from December 10 to 12, will explore the theme of Navigating a World of Disruption.
I look forward to welcoming you to our different events,