The 13th Annual World Leadership Forum organized by the Foreign Policy Association in New York City offered a cross-section of facts and opinions on the global economy, financial markets and sustainable development with five high-profile panels. Cautious optimism and a sense for realistic achievements shaped the forum.
Bruce Kasman, Chief Economist and Managing Director of Global Research at J.P. Morgan pointed out during the first panel, "Global Economic Outlook," that monetary policy in Europe and Japan improved the world economy, while growth is still constrained in emerging markets. "The United States popped out of the recession in 2009, but the healing process is incomplete at best", Kasman explained.
Mark Zandi, Chief Economist at Moody's Analytics also seemed "enthused" about the U.S. economy with GDP growth of 2 percent and an unemployment rate of 7.3 percent However he predicted the only threat to a real recovery is Washington. "Because the U.S. government has to pass the budget and quite honestly, the fact that nobody is screaming is making me nervous."
Managing Director and Head of U.S. Research at the France based Société Générale, Stephen Gallagher during the second panel, "Word from Wall Street", noted the uncertainty that the U.S. government might shut down in early October is "quite rattling for financial markets, but not a catastrophe".
David Malpass, President at Encima Global LLC, mentioned that "markets are properly priced now after being through fiscal turmoil", but added that structural reforms around the world are still necessary. He asked the question "How did we get to the point where the government is growing without limitations?" Malpass criticized the fact that not enough small time businesses were launched in the recent past. "The normal we have right now is money flowing to rich people," Malpass described. "We don't have a process in place at the moment to reallocate spending from programs that fail to successful ones."
A longer term problem the U.S. will be facing was discussed by Richard Peach, Senior Vice President from the Federal Reserve Bank of New York and Stephen Gallagher. Peach explained that the work force in the U.S. is currently divided into four groups, the employment of the highest skilled group is "rising very nicely" and employment in the lowest skilled group seems to be stable. "However, employment in the two middle groups is falling like a rock. I predict that longer term education and employment issues might make our future less rosy then the previous panel suggested". Stephen Gallagher added, "The U.S. used to be beneficiaries of other countries brain drain, now we educate them and they're leaving us for better opportunities elsewhere."
A historic undertaking, the transatlantic trade partnership recently established between Europe and the United States was the subject-matter of the third panel, "The Future of Transatlantic Trade". It is "an agreement with the potential to set global standards", as Americo Beviglia Zampetti head of the economic section of the delegation of the European Union to the United Nations pointed out. Jacob
Funk Kirkegaard, Senior Fellow at the Peterson Institute for International Economics supported this argument and added, "This is something that Germany wants and they are sitting at the head of the table at the moment." Kirkegaard further explained, "If the U.S. and Europe can agree on environmental standards, those will become global standards." Michael Calingaert, Executive Vice President at the council for the United States and Italy explained the importance of "mutual recognition" between the U.S. and Europe.
The arguably "softer", but adjuvant matters were discussed during the afternoon session. "The changing challenges of leadership: developing the workforce of tomorrow" and "Mitigating climate change: investing in sustainable development" topped off a day of political discussion that was both, inspiring and substantial.
One of the keywords during the first panel discussion in the afternoon appeared to be "character" and the definition thereof. Former Senator Bob Kerry pointed to the importance of character, and defined the term as the abilities to persist, collaborate, giving other people credit, among others. Bhushan Sethi, Managing Director at U.S. Financial Services People & Change pointed out that "This young generation is very resourceful, but is lacking diplomatic skills." Sethi indicated their "skill deficiencies" at "assessing problems by applying familiar systems." He also explained that while character is often a requirement within the work environment, it often "goes out the window" in practice and is perhaps in need of redefinition.
Nathaniel Keohane, Vice President of the Environmental Defense Fund International Climate could not have coined a better slogan to "sell" climate change to the private sector. "Climate change on our current path represents a fundamental threat to our economy". With this statement, Keohane has his finger on the pulse of time. The ongoing discussions in the General Assembly at the United Nations are trying to find answers to the urgent topic of global sustainable development and the needed alliance between the private and public sectors.