Davos 2023: Relaunching Trade, Growth and Investment

This transcript, generated from speech recognition technology, has been edited for web readers, condensed for clarity, and may differ slightly from the audio.

Børge Brende, World Economic Forum: Good afternoon. Welcome to this incredibly important panel. It is really about how we can avoid a deep recession and how we can build a recovery and the role of trade and investments in this. We know that during the last decades we have tripled the global GDP and trade has been an important factor in this whole world is moving forward. Can we still rely on trade and investments being part of the solution, or will we have to rethink globalisation and the growth factors?

We have an amazing panel to deal with these topics. Starting with Dr. Okonjo-Iweala, the head of WTO. We all know Dr. Ngozi. We have Prime Minister of Belgium, Alexander De Croo. We have also Larry Fink, Chairman and the CEO of BlackRock, the largest investment company in the world. And then we have Robert Habeck. We all know also Minister Habeck, he is minister for, among other things, also trade and economy and energy from Germany. So, Dr. Ngozi, we have all seen now numbers coming out that maybe one third of the world will be in recession this year. We also know that many leaders are thinking through now how could their growth agenda look? Because it's not a priori given that there will be a recession. It could also be a very shallow one. We can also avoid it. So, we are all thinking how to create growth. And for those that heard also Vice Premier Li Hu here a few minutes ago here, he said that without growth, growth is like a river without water. And he also said that [inaudible] is like a tree without roots. If we don't trade with each other. So, Dr. Ngozi, what's your recipe?

Ngozi Okonjo-Iweala, World Trade Organization: I agree. I don't have a recipe. But let me say this of course we can all participate in the doom and gloom. And you know, when we look at the projections that we have for 2023, we are projecting a 1% growth in volume of merchandise trade, compared to 3.5% last year. But it's not the number that is a problem. It's the uncertainty around the estimates. Depending on what happens with the war in Ukraine, how we come out of China's pandemic, etc., etc., we could, you know, even see a contraction, or if we have a soft landing from the macroeconomic, from the monetary policy management. If we have interest rates that they are not going up so much, we have inflation coming down, we have a soft landing there, we have the war in Ukraine. If things work out well, we could see a situation in which trade grows even more. So, we shouldn't forget that there is an upside. So that's the first point I want to make.

I think the second point I want to make is that we should not- the one thing we cannot do if we want growth is to talk about fragmentation, decoupling, because there are serious costs to this. So, I always say that talk is cheap, but when we look at the simulations we've done at the WTO, if the world were to decouple into two trading blocs, it would cost 5% decrease in global GDP over the longer term. That's huge. That's more than what we lost in the financial crisis. And for emerging markets and developing countries, it would be even worse, like 12%, double digit losses. This is one way- one thing we cannot do if we want to talk about growth. Now, what can we do in order to restart the growth to recover? We have to strengthen multilateralism. We have to strengthen cooperation. We have to look at those parts of trade that are growing and encourage services. Trade is the future. Digitally delivered services are growing in leaps and bounds. In 2005, it was about $1 trillion. Now in 2021 it is about $3.5 trillion. That's the wave of the future. So, there is some optimism, some upside. I think that trade can contribute substantially to growth.

A third thing is people are talking about globalisation and the end of globalisation. One, let's not forget globalisation had its problems, but it did lift more than a billion people out of poverty. Two, we need a new type of globalisation, not the old type. What we are calling re-globalisation at the WTO that seeks to take advantage of the opportunities that we see now in the vulnerability of supply chains. When you're building resilience, use this to bring in those who were at the margins of the global value chains. Those countries and those peoples. Decentralise and diversify your supply chains to these areas. And this is another way you can grow these economies and grow trade and grow the world. Let me leave it there for now.

Børge Brende: Thank you. She deserves applause. I agree. Oh, don't be shy. Larry Fink, you heard what Dr. Ngozi said, that further fragmentation of the global economy will come at a price. How do you see the role of private sector in creating and being part of a growth model and, or a growth compound, moving forward? How do you see trade and investments being a part of that?

Laurence D. Fink, Blackrock: Well, let me just add one comment about the fragmentation. Fragmentation is also occurring because now we are hearing in every country the concept of national security, whether it's national security for chip, national security for energy. I mean, that phrase has been used repeatedly, obviously, for reasons that, you know, for the war in Ukraine. But fragmentation is one of the causes of inflation, because when you overlay something more important than price, something called national security, you're willing to substitute or sacrifice price. And that is one of the causes of the inflation that we have. So, fragmentation may be a good outcome if you're just focusing on national security in various forms. But if we want to have a world where we are lifting more human beings, we want to have a world that where price stability is more important, then we are going to have to be working in a more globalised world.

Globalisation is changing. It has not ended. It is being re-evaluated, reimagined. One part is we are seeing, you know, one thing we learned during COVID was the resilient supply chains didn't work. And so now the idea with most corporations is creating resiliency. Okay, resiliency means more inflation. Resiliency means duplication. Now, on the backside of that is going to be deflationary, when we create multiple factories worldwide, but we're in this transition now, and I think we're losing sight that transitions are painful. But generally the outcome, the back end of a transition, is going to be very good. So, I still remain quite optimistic about trade, quite optimistic about the role of the private sector. And indeed the private sector probably is going to have to play a bigger role in trade at any other time. The reason why we cannot depend on central bank behaviours, you know, for ten years we've had central banks that have been very accommodative. We had central banks providing liquidity through quantitative easing and now central banks are now doing quantitative tightening. So, we're seeing less liquidity. We're seeing central banks raising rates as a result of all this inflation. I think the what we learned in watching in September, what the UK did, there's going to be less fiscal stimulus going on. And as a result of that, I do believe that the need for governments, especially here in Europe and in the United States for governments to be working closer with business to find solutions.

So, in trade, there's going to be many avenues where the private sector is going to be looking to put money to work, whether it's in infrastructure on a global scale. Whether it is in decarbonisation technology as we try to get energy security, but in other forms than just hydrocarbons. The private sector has large pools of money right now. I mean, at BlackRock, our example, the amount of flows of capital that we saw last year were the second highest ever for us. So, capital wants to find a home. Capital wants to find a home where they can feel comfortable that that return over a period of time is going to be achieved. And so, let's be clear: I believe there's a greater need for governments to be working with private sector, especially in the areas of infrastructure decarbonisation, because on the back of less fiscal flexibility, the need for private capital is greater than ever before. And the private capital is there, as long as they believe over the horizon of the investment, the returns can be achieved they’re fair and just for the investors. And so, I'm quite optimistic on the concept of working closer with more governments worldwide, both developed and developing countries, to find solutions in those areas.

Børge Brende: Well, thank you very much. And I think there is a lot of money in the US now for decarbonisation and infrastructure. I think there's a couple of trillions that your government has put on the table.

Laurence D. Fink: I am very optimistic on the US in its decarbonisation process. The IRA is a transformational bill that really lists returns in all the forms of decarbonisation. We're witnessing and having conversation with companies worldwide who are looking to build additional factories within the United States. And now getting back to world trade, we need to find ways to cooperate the United States with Europe, with Asia on this process, on this pathway.

Børge Brende: I'm tempted to go to you, Minister Habeck. What you heard Larry Fink now saying about also the huge investment that this IRA is going to lead to in decarbonisation, new renewables. This is something that I think you also personally have been underlining the importance of for decades. Are you afraid that Europe can lose out? What are the steps for Europe then to make sure that it's not only the G2 in this market, China and the US?

Robert Habeck, Federal Ministry for Economic Affairs and Climate Protection of Germany: No, I'm not afraid that Europe will you lose the competition, but competition it is, to be quite honest. And Larry you just mentioned additional factories will be built. If it would be additional factories that would be great, of course, and better decarbonised green factories in any form than fossil fuel factories for the next three, four, five decades. The concern, the European concern, is that due to some regulations inside the IRA, it wouldn't be additional factories, but the plans for investments in Europe will be sucked away. And this brings me back to the trade question, if I may. I would divide two lines of arguments.

The first one is do we need to more global trade, just, fair global trade? Yes, absolutely. And I can remember last year when I was in Davos in May, I was always asked, when is Germany going to sign or ratify the CETA agreement and all the other things. And we did so, and we achieved it by changing the trade agency in Germany and in Europe, the agenda. We do now include climate issues and social issues in our view on trade. So, the old world, if I can say so, was free trade is super. That was one part of this assignment. All the guys gathering in Davos who said, yeah, this is the way forward. And others, you know, I'm from the Green Party we are a little bit more sceptical, and say you exclude everything that is that is going in the direction of sustainability. But these are not obstacles of trade, these are rights people voted and fight for. So, you have to include that. And this is I think, the future of trade. This is what Ursula von der Leyen said, and I think this is what the global agreement is. So, if we can concentrate on this, we can foster the trade worldwide once again on another level. And it's fine that you are nodding because this is always bilateral agreements. Mostly it will be.

The second issue I would like to make is that I see a decoupling. And this is threatening because we are seeing a decoupling of economic growth and market driven economies and democracies. So, I think we have to understand and to learn, from my perspective, it is impossible to have an open liberal democracy without a market driven economy. But surely you can have a market driven economy without democracy. There is the decoupling. And this brings me to WTO, to the UN, to all the multilateral organizations. We can surely find ways of better, fairer, more sustainable trade agreements. And we can foster this, but we need grounds for debate of what the global rules, also values, are. This is multilateral — can only be multilateral. To solve all the problems. The global risk, you mentioned pandemic climate crisis, social crisis. We need global collaboration. So, yes, to bilateral trade agreements. But in the end, we have to stick to the idea of multilateral institutions.

Børge Brende: Thank you. One thing that also Larry Fink mentioned to you, Prime Minister De Croo, was, at least indirectly, this notion of ‘friendshoring.’ So, the decoupling means that you are then buying from countries that you are allied with. So, for example, some manufacturing is moving from China to Mexico and then the US is happy to buy. This security element now in trade: how do you look at that and how to make sure that that doesn't become so big that it has real negative impact on global growth? Because trade has also had the mission of exporting deflation for example China has exported so much deflation, and when will we see that again? So. what are the balancing acts here on near-shoring, friendshoring, but at the same time not losing the baby with the bathwater?

Alexander De Croo, Prime Minister, Belgium: Well, I think that we've seen it over the last year. What happens if trade is being made difficult? Look at the amount of instability in the world. It has meant during COVID, we had moments where the trade lanes were less open. And it's led to all types of problems. Supply chains were disorganized and all the Western world was impacted, but especially the developing world — the impact was a gigantic one. So free trade is an element about prosperity, but it's also about security, because the gigantic instability in the world today, one of the reasons is that trade is being made difficult. And that's one important element.

The second element is that this trade agenda is about stabilising the world, but it's also about decarbonising the world. And honestly, I think the world can only be happy with the fact that the United States has moved to the right side of the table and we've been waiting for that. And I know that in Europe some people are criticizing IRA, and there are elements where we should talk. We should talk on certain elements which might look a bit unfair. But on a global scheme, we can only be happy with IRA, because finally the number one economic powerhouse in the world says decarbonising is part of our trade agenda. So welcome on our side. Let's work together and let's see how we can make this work.

Børge Brende: Just a short question there. If you then see European companies moving to the US, because they say that they have better, lower taxes, more incentives available, what is your response?

Alexander De Croo: Well, I think the response should be our own scheme. We should make our own scheme and it should not be copying what IRA is doing. I mean, we have our own advantages and we should play on our own advantages. If you look at the technological side in hydrogen, in offshore wind and so on, actually, Europe is leading in these domains compared to the United States because we've invested in them much, much earlier. So, we should come with our own scheme which is more tailored to what our strengths are. And I don't think it's actually complimentary to what the United States is doing. And it should be an answer to the forces that you see within Europe today, which are forces which demand for derogations on the state aid rules. And that is a risk.

The European Union works well because it is one common market where a gigantic market such as Germany works perfectly together, but a smaller market like Belgium, because it's one common market with common rules. The answer can never be that we are going to loosen the state aid rules because then it becomes the race of the deepest pockets. And by definition, Germany has deeper pockets than Belgium. That's not the game [we should] get into. That should never be the answer. The answer should be, and I think President of the Commission von der Leyen gave some hints this morning here in Davos on what this scheme should look like. To conclude, the answer is not less trade, and the answer is not less investment. The answer is more trade and is more investment, but also better. And that's the key component: it's better trade and better investment. And schemes such as our IRA and the European scheme should be the right answer to that.

Børge Brende: Thank you. I see you're reflecting a lot, Dr. Ngozi. Are you hearing the same as, me that industry policy is back? Because what we're talking about here is the traditional tools of then incentivising behaviour that you want and you use then governmental funding for that. It would be great to hear your reflection on this because our borderlines between state subsidies and R&D and incentivising where do we stand though? Is the US and Europe inspired by some other big economies and vice versa? First question.

It was also mentioned with multilateralism and WTO role here. Isn't it a great paradox that if you were to export green technology, you probably would have to pay more in tariffs and etc. then if you want to export technology related to coal. Is that something you can fix if the countries want to support you at the WTO? Because as the Minister Habeck said, trade cannot only be about trade, it also has to be about inclusion, the green transition, and make that part of the agenda.

Ngozi Okonjo-Iweala: Well, thank you. I mean, this is not an easy question. I always said that the future of trade is services, is digital, it's green and it should be inclusive. That's the future of trade. So if the future of trade is green, when countries or members take steps to try to see how to decarbonize, to get to net-zero by 2050, I think you can only be supportive. All of us are supportive of that objective and trade should certainly be part of it. I think that the challenge comes with how. And one has to tread very delicately here. Certainly, the balance that you talked about, what one does not want is if we are going back to industrial policy, quote unquote, we should not see a race, a subsidisation race.

Børge Brende: Are we there today?

Ngozi Okonjo-Iweala: Well, we are watching to see if we are there and hoping that that's not really where we are. So how we manage that. It's very important to give incentives to decarbonise still, to work with the private sector, as Larry said, research and innovation to encourage a dissemination of technology all around the world because we are all in this together. So, all that is good. So, it's a question of where do the subsidies go, how do they encourage, you know, everyone to be part of it? And what's the balance? Because if it's a race then, you know, that, of course, the emerging markets and developing countries will not be able to compete in such a subsidy race. So, I'm hoping that what we are seeing is going to be a balanced and nuanced approach to decarbonising and not something else.

Børge Brende: Thank you. I'm looking at you, Larry, maybe you can comment on what Dr. Ngozi said just about the industry policies and the fine line there. And secondly, if you could also elaborate on the friendshoring. How far do you think the US as the world's largest economy — it’s 25% of the global GDP and 5% of the global population still — so, it is a very, very important part of our economy. How far will the US go to friendshoring? Is it 10% that of national securities, we can continue to trade for 90% as usual, then I don't think we'll have that much impact. But if we increase that to 30, 40%, then I think we might be able to argue that we are shaving off a lot of growth.

Ngozi Okonjo-Iweala: Can I also comment on friendshoring after Larry does?

Børge Brende: Yes, of course. And then the two other gentlemen also want to comment.

Laurence D. Fink: I'm not sure it's just friendshoring. I think it's the dynamics of trade evolving. It's evolving to have your manufacturing closer to your demand. I think that is one of the major components as you start thinking about more resilient, more redundant supply chains. The time and distance of manufacturing to the destination is now becoming a bigger issue. The dependency on a few ports has proven to be not a good outcome.

And so when we think about Mexico specifically, you know, Mexico's advantage is it has lower wages than China. It has an educated workforce. It has a pro-business engagement at the moment. You can transport goods via train into the United States. And so, all those elements, it's not just friendshoring. It is just the dynamism of trade. And I think this is going to occur more and more. Mexico is not going to be the sole beneficiary of that change. I think Eastern Europe is going to be a beneficiary. I think Turkey is going to be a beneficiary. Unquestionably, Indonesia, you know, then Southeast Asia will be beneficiaries of the new design of trade.

So, I don't look at it as just- I wouldn't even call it friendshoring as much. I mean, you know, I think the resiliency of the United States having two oceans, having two allies, is a strong geopolitical advantage, having Canada and Mexico. So, but I think more of South America can be a beneficiary of this concept, especially Brazil. I think that's just a natural phenomenon that's occurring and I don't think we're biasing because we want to have a friend. I think it's always good doing your trade with closer allies. So, let's be clear: I think that is a good outcome in any circumstances.

Private capital seeks the highest and fairest return. And so, you know, as long as we are living under the laws of the world, the laws where the money is being created from — and, you know, all the money that BlackRock manages, none of it's our money — and so we have to be responsible and as a fiduciary, making sure if we're investing for a pension fund from Germany or a pension from from Belgium or a pension fund from the United States, we have a responsibility of finding the best return that we believe will have the safest opportunity for that. And that's what we do. We do believe, though, that working alongside with governments and building a more resilient world can be a good component and can create the durable and resilient returns that our investors are looking for. But let's be clear, what we are trying to do at BlackRock for our asset owners is not philanthropy. You know, what we trying to do is make sure that as the largest manager of retirement assets in the world, we have a enormous responsibility in making sure those retirement assets are durable and sustains inflation, sustains geopolitical risk, that over a long period of time people can have a retirement, that they live in dignity and with safety.

Børge Brende: Thank you. So, we'll go shortly to Dr. Ngozi and we'll go to Prime Minister De Croo and then Minister Habeck. We have seen an involvement with trade. It started after COVID with this notion of just in time was not sufficient anymore. So it was launched just in case. And then the friendshoring piece came and you look very worried, Dr. Ngozi.

Ngozi Okonjo-Iweala: Maybe I should smile more.

Børge Brende: Maybe I shouldn’t try to read the people's body language.

Ngozi Okonjo-Iweala: I just want to say, look, we have to admit there is an issue. We've seen the vulnerability of supply chains during the pandemic, the war in Ukraine. So, we have to admit that the concentration of manufacturing or concentration of raw materials in very few countries is a problem that we need to deal with. We need to build resilience and diversify. So for me, that's not the issue. The issue is how. How do we how do this? And I think the question of building resilience, we should have a broader mind frame and approach to it than we normally would. That's why when people talk of friendshoring, I get a little nervous because I don't know who is their friend, you know, and their friend today maybe tomorrow will not be a friend. Also, when you say that I never hear any countries in Africa mentioned. Larry said Indonesia could benefit and Brazil but there’s potential for green hydrogen in Namibia. You know, Morocco is doing very well and Tunisia could be a place. So, when people talk of friendshoring, they immediately think of, you know, they think of Europe, the US and some of the other large emerging markets. So, I just want to plead with us to diversify, because some of these other places, when they have the right environment for investment, could equally be candidates for building resilience, for different diversifying supply chains. And business was doing it anyway, moving away from China anyhow, because, you know, the costs of production in China were rising. People were moving to Vietnam, Bangladesh, other places. So, let's just open our minds when we talk about this friendshoring to be more inclusive.

Børge Brende: Open our minds?

Alexander De Croo: In Europe, there's a lot of discussion today about what we call strategic autonomy. And to me, it is not so much about autonomy, it is much more about strategic. We as a European continent, we have no ambition to be autonomous. I mean, we are the number one trading partner in the world and we should remain the number one trading partner in the world. But on some domains, we should manage it in a more strategic way. And diversification indeed, is the element. I mean, as a European continent, what have we found out? We were dependent on Russia for energy. Big issue. It's not the fact that we're dependent on importing energy, that's not the issue. But being so dependent on one country obviously turned out to be a big problem. Let's be fair: for our security we are very dependent on the United States and United States are our friends, but being too dependent even on a friend is not a good thing. Even within NATO, NATO would function better if we both pull our weight. On some technologies too dependent on China.

And so the element of strategic autonomy is more about how do you manage this? And for example, in semiconductors, that is a case in point. Semiconductors, a lot of the fundamental research, for example, is done in Belgium. We have an excellent research centre. Everyone is doing their research there. But then if we need these semiconductors, they are being produced in one part of the world where you could ask questions if, from a strategic perspective, it's safe. What you are doing for the moment and the EU Chips Act is an answer to that, and the US Chips Act is an answer to that as well.

That then links to an element you mentioned about industrial policy and this is a topic we're in five years ago here, I'm sure industrial policy was not really a very sexy topic. I mean, no one would really talk about it. Today, it's top of the agenda and it should be top of the agenda because we see that so many industries have become very strategic. It does not mean that we should do it on our own. We should remain open to the world, but we should do some more thinking, some more what ifs, some more scenario building on how things could evolve. And there may be a lost element. There, the WTO has a pivotal role to play. But multilateral organizations such as the WTO, they are as strong as how strong we want them to be. I mean, it's us, the members of the organization, that give them some autonomy or do not give them autonomy, and that's an appeal to all of us in this world trade, which is shifting towards something much more strategic than before. Organizations such as the WTO should have the firepower to be able to manage that new reality.

Børge Brende: Thank you. Minister Habeck, I just heard from Prime Minister Alexander De Croo that Europe was far too long put all the eggs in one basket on the natural gas from Russia, 40%. It was also saying that, at least the way I interpreted it, that we had put a lot of eggs when it comes to security in Washington, D.C. And that was, of course, a big debate in Europe also during the former administration. And thirdly, Europe is also very much relying on export to China. So, what is your view on this and the whole friendshoring and the whole how to bring this forward? And Germany is very influential and is the fourth largest economy. So, we're talking about really an economic powerhouse.

Robert Habeck: Yes. Maybe I can start with one correction that is not very delightful for me. It was not Europe that relied on Russian gas, mainly it was Germany.

Børge Brende: I was trying to be a diplomat.

Robert Habeck: This was a big mistake. And looking back in history, it's hard to understand how this mistake could be made, because the decision to build Nord Stream 2 and to sell our gas storages, some of them the biggest ones, to Gazprom and to sell some of the oil revenues to Rosneft was made in 2015, one year after the occupation of Crimea. So, this is astonishing looking backwards. It was Europe that paid the price for the German dependency on Russian gas. And therefore, of course, an obligation arises that Germany has to contribute to Europe's gross wealth and to help other countries as well.

The good thing — maybe not the good thing, but one thing — is that we have managed to make this crisis, and it was a threatening crisis in the last year, manageable in a way. It's not over, of course, but storages are full. We just discussed it. 90% in the middle of January. This is something, and we have achieved three LNG terminals in ten months building time. So, our airport building took ten years or something like that and this was unexpected, but it was possible and therefore now we have a stable situation. The gas prices now €55. This is unexpected, I would say. It gives us the hope that we can manage and reduce the recession that is threatening Europe and Germany at the most.

Coming back to your question, I would say that now we have reached exactly the point where it hurts a little bit because in an ideal world there are no such things as bad political intentions. All countries will contribute to a multilateral world and talk to each other, don't use weapons, don't have armies, and don't use the economic situation for an advantage against others. But we've learned talking about energy, it's obvious. But the same goes or could go at least for digitalisation and telecommunication, that this is not the case. And I would also argue in an ideal world, state aid or subsidies in a market driven economy are only always the last answers of a state, only reserved for these areas where the market is not covering the demand and the supply. But this is not the case. We see it now in the discussion about IRA and Europe is mainly which subsidies are fair and which are unfair. So, subsidies and state aids are given for the advantage for the own economy and this goes always also for Europe. Therefore, we need the control of the single market and DG Competition. But the decision must be faster and stronger. And if it takes two years’ time to take a decision, this is too long. So, I think this is what I would like to understand what the President said the other the other hour here on the stage.

And last thing, I'm coming back to what the prime minister said, in an ideal European world my idea would be that we have a common European fiscal policy, not only money policy, but also fiscal policy. But this we don't have. And therefore, of course, national economies, national states, national ministers for economic affairs are doing their job in a way. And I would like add in brackets, in an ideal European world, my idea is that one day or the other we have a common federal European republic, but, brackets closed, this is not for today.

See, it's highly politically and therefore we are not in an ideal political world. And my idea is coming back to what the Prime Minister said, yes, we need some resilience capacities in critical sectors. It would be stupid to rely on, in this complicated political world where interests are gaining and globalisation is under pressure to say the least of interest spheres and geopolitical room for manoeuvre. And there I would argue that we need some knowledge and some capacities in all critical areas. This counts for digitalisation. This is the reason for the Digital Market Act, but the same goes for some ground knowledge and capacity for batteries, for raw materials, for semiconductors and for solar panels. And of course, medical production and so on and so on. We don't have to stick to the green economies. So therefore, the open fair trade is not the last answer. It's the right answer, but not the last answer. We will always be challenged with the need for some own production capacities, for critical infrastructure, to have a resilient economy also in times of crisis.

Børge Brende: Thank you. Fascinating discussion. We have three minutes left and we will have an award prize, also an award ceremony. So, we will be sitting here during that. But we have three minutes. So, Larry, one and a half minutes and then Dr. Ngozi, and then we'll go to the awards ceremony. Larry, do you want to give a short closing comment?

Laurence D. Fink: Well, you know, when I think about the need for global trade and the need to have a more resilient world and world economy, I actually believe the only way we're going to achieve that is we have more governments focusing on the concept of hope. If you look back at the last three years, I think the word hope has been forgotten. We are seeing a decline in birthrates worldwide, accelerated during COVID. We have more polarisation in the world politically. We have more anger; we have a war. And if we're going to really re-engage growth, people have to have a belief that in investing money today for something that you're going to get back in 20, 30 years, you only do that if you believe tomorrow is a better place to be. If you don't believe tomorrow's a better place to be, and obviously a lot of families are questioning that, you keep all your money in a bank and you don't invest. And we're seeing more and more of that throughout the world right now. And so, the key for the private sector is for leaders of businesses to try to find more ways of hope. But I would urge more governmental officials to think about that word too.

It has been absent in our dialogue for the last three years as we focus on mortality related to COVID and we focus on a war and we focus on other issues. And it's put a lot of fear in a lot of people, and we need to find a way to re-instill hope for more people in the world that tomorrow is going to be better.

Børge Brende: Thank you. De Croo has asked for 30 seconds and then a minute for you, Dr. Ngozi.

Alexander De Croo: One of my previous functions was as minister of Development Cooporation and I spend a lot of time in the African partner countries, and we have our budgets of what we call ODA, it's Official Development Aid, and all that is interesting and you can do interesting projects. But the number one reason that lifted a billion people out of poverty is not ODA. It's not what governments do, it's trade. And it's because there's a profit to be made and a profit is not bad. I'm not advocating for monopoly profits, I'm advocating for fair profits. Having a business case and having a stable environment and having trade is the number one reason of how we lift people out of poverty. And there is still way too many people in the world who live in poverty. So, if you don't believe in trade, I mean, at least for that, let's do it because it's proven the number one way, how you get people out of misery.

Børge Brende: Dr. Ngozi, with that comment you don't need this last comment, do you?

Ngozi Okonjo-Iweala: I don't I was about to say that. That's a really nice wrap up, but I'll add one sentence to it. It's just to emphasise that for all the problems of the global commons we face today, we cannot solve them without multilateralism, without cooperation, without coming together. And trade is really a strong part of this solution. Whether we are talking about decarbonising the world, you cannot do it without trade because you can’t transfer the technologies. Solving the pandemic, much as we saw vulnerable supply chains, we also saw that trade helped us get goods from one part of the world to the other; technologies for vaccines. So, if we want to recover and we want to recover strongly, we need trade. I'm strongly supporting what the Prime Minister said, and so we shouldn’t throw out the baby with the bathwater. Thank you.

Børge Brende: Thank you. I think this has been a fascinating discussion and of course I'm totally biased since I've been the moderator, but I even learned a lot. And this is Davos discussions at its best because it had its own dynamics. And I think we moved some steps forward. So, I think we'll be seated because we will have the award and the panelists will also be seated during the award. I think they deserve a big applause. But this is also then a very good segue into the next segment. The Schwabe Foundation has existed for 25 years and their role has been super critical in awarding social entrepreneurs all over the world. So we'll see a short presentation and then the chairperson, Hilda Schwab, will present this year's awardees. Very courageous awardees.