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INTERNATIONAL DEVELOPMENT JEFFREY SACHS ET NOW: Jeffrey Sachs Goes Off, Roasts Donald Trump’s Trade Talk, Says 'Mickey Mouse Is Smarter Than Him' PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=gNson4TqUO4 Peter Burgess COMMENTARY I have interacted with Jeffrey Sachs and Columbia University for many years. There was a lot of overlap in the academic work he was doing and the very disorganised opportunities that I was getting to work on around the world. Over time, some of our thinking came together and some diverged. Much of this was to do with the work Sachs was doing for the UN. I think both of us wanted the UN to be a more effective organization, but I think we both had very different views about how this could be done. Peter Burgess
Jeffrey Sachs Goes Off, Roasts Donald Trump’s Trade Talk, Says 'Mickey Mouse Is Smarter Than Him' ET NOW 2.18M subscribers ... 1,627,023 views ... 35K likes Premiered Apr 17, 2025 control your money with economic times now. YouTube Channel - / @etnow Subscribe To ET Now For Latest Updates On Stocks Market News , Business News, Company News, IPO & More \| https://bit.ly/SubscribeToETNow Subscribe Now To Our Network Channels :- ET Now Swadesh: / etnowswadesh Times Now: http://goo.gl/U9ibPb Social Media Links :- Twitter - http://goo.gl/hA0vDt Facebook - http://goo.gl/5Lr4mC Website - https://www.etnownews.com Follow us on Google News for latest updates ET Now: https://news.google.com/publications/... Times Now Navbharat: https://bit.ly/3zDaKJo Times Now : https://bit.ly/3CyrrYg Zoom: https://bit.ly/3CEK0dv Transcript 0:00 uh if you take your credit card and you go shopping and you run up a large credit card debt you're running a trade deficit with all those shops now it would be pretty strange if you then blamed all the shop owners for having sold you all those things you're ripping me off you're ripping me off you're ripping me off i'm running a trade deficit that is the level of understanding of the president of the United States the trade deficit does not represent at all trade policies it represents spending relative to production or earnings we call that an identity i teach it in the second day of my course in international monetary economics trump never made it to the second 1:02 day so he says 'You're running a trade deficit look they're all cheating me.' But all that's happening is the United States is outspending its national income and you can look at the national income chart you can add up consumption and investment and government spending and you can subtract off gross national product and lo and behold what will that equal not approximately exactly that will equal the current account deficit which is the comprehensive measure of how much you spend on goods and services versus how much you uh sell in goods and services so the United States runs a current account deficit because it spends more than it produces why does it do that we have a big credit card in the 2:05 United States it's called the national government the US government spends about $2 trillion a year more than it takes in in revenues what it's doing is making transfers to the American people and to American businesses it doesn't tax Americans for those transfers because here's another little fact because the congressmen that vote on the budget got into office by being paid for their campaigns by rich people who don't like taxes so the political system says spend but don't tax us so we run a chronic deficit in the United States that spending goes out 3:00 either as transfer payments or goods and services and that's more than our national income which is about $30 trillion and our spending is about $31 trillion and that's our trade deficit and for that Donald Trump blames the world okay I fail him for this if he were my student he's my president it's a little weirder because when he did this in two days the world lost $10 trillion of market capitalization by the way where did it go uh did it get transferred from here to here no it got destroyed why destroyed because trade something also the president of the United States doesn't understand is mutually beneficial so if you stop trade 4:02 everybody loses it's not that one side wins the other side loses he cannot understand that concept as a guy that traded real estate in New York so his idea is somebody had to win somebody had to lose but what happened when he made this announcement was $10 trillion was wiped out worldwide it's not that the US went up and they went down no everybody went down because the whole world system is based on a division of labor and he's breaking that division of labor into pieces so then people said this doesn't make sense even the very rich people that gave him the money for him to get into office started saying this doesn't make sense the hedge fund managers who 5:00 were his big campaign contributors Elon Musk who paid for his election became prime minister uh he said this doesn't make sense and then the markets said this doesn't make sense not only 10 trillion dollars but as the finance minister said interest rates started to rise because people began to dump US Treasury debt the safest thing in the world apparently so interesting what happened it's not quite true that he reversed things first he left on this 10% tariff except for one country for China 145% where he raised the tariff rates that's because the United States has a deep neurotic attachment to China the US political system hates China why because China's big and successful 6:04 and so that the US hates it's a rival it's a competitor and so this is the one 6:12 thing he left on now he's going to mess up everything with this too because in a 6:18 trade war between the US and China China wins china does not depend on the US 6:25 market very much it's about 12% of China's exports china will do just fine 6:33 it's just dumb policy that's There's no more Sorry to 6:40 say it there's just no more explanation to this than that it makes no sense now 6:50 it raises if I could just one last point how can this happen when it makes no 6:56 sense and that people should understand we are in oneperson rule in the United 7:03 States our political system is in a state of 7:09 collapse what President Trump did is an emergency 7:15 decree everything he does is an emergency decree literally you can go on 7:21 to whitehouse.gov gov and then type follow the menu to executive decrees and 7:29 there are dozens of them and each one starts the same way with the powers 7:34 invested is in me as president of the United States I hereby declare a 7:41 nonsense b nonsense c nonsense because he's 7:47 king those powers are not invested in the president of the United states 7:52 they're invested in the Congress you read article 1 section 8 of our constitution it says that all duties 8:00 originate with the Congress and specifically in the lower house all 8:06 legislation has to start in the House of Representatives but the 8:13 US starting in 1945 after World War II 8:18 became a military state to a large extent and so it sprinkled in its 8:24 legislation emergency emergency emergency and Trump doesn't have to 8:30 prove anything's an emergency he just has to says something's an emergency so 8:36 suddenly the trade deficit became an emergency and on that basis he issues a 8:41 oneperson rule even his aids don't know what he's doing you raise one final 8:48 interesting issue which is that the market recovered about $4 trillion when 8:54 he reversed anyone who knew that 5 minutes before made 9:00 billions this is not the cleanest government in the world I can tell you i'd be hugely surprised if some people 9:07 didn't know just a bit ahead of time starting with members of the US Congress 9:12 by the way look we'll get into the more general issues about protectionism and the end 9:18 of globalization question mark in a minute but I think what's happening and the directives coming from the White 9:24 House are such a perfect example of what this panel is about i'd just like to stay on this just for a few more minutes 9:31 um Minister is protectionism always a shortterm aim and does it always come at 9:39 the expense of the longer term gain donald Trump hasn't said it in public but apparently in private during his 9:46 first term he was asked about the problem of the US national debt and his answer was I don't care because I'll be 9:51 dead by the time it's a problem and apparently that's also his approach to the climate crisis so is this 9:57 protectionism coming from the White House a short-term fix which is going to hurt America in the longer term in terms 10:04 of how it grows it's not a fix it's uh apparently a quick fix but it's 10:13 fundamentally flawed as professor has very clearly stated look 10:20 protectionism is nothing new if you look at post global financial 10:26 crisis the number of annual trade restrictions have gone up 10:31 dramatically in fact like last year there were over 3,200 trade 10:38 restrictions that is almost 11 times higher than what it was pre- global 10:45 financial crisis so this has been a trend but what has you know what we have 10:53 seen over the past week or two is clearly a new level this this goes 11:02 beyond you know some protectionist measures trade 11:07 restrictions this goes into something an allout trade war so that's really 11:14 worrisome because if you go back again I mean if you go if you look at 20 years 11:21 to global financial crisis global annual trade growth was 11:27 two times world real GDP growth rate so in a 11:33 way trade was the engine of growth now that 11:39 engine has been slow so if you look at post- global financial crisis global trade growth barely kept 11:47 up with kept up with uh real GDP you know global GDP growth so that's no 11:54 longer really one of the kind of like a strong engine but I think the way things 12:00 are now if you know if if current state of affairs is sustained we may end up 12:07 actually protectionism dragging global growth it is not only growth it's really 12:15 there are many you know additional fallouts from these type of policies 12:20 absolutely yeah yeah so the answer to your question this is not a fix 12:27 there's a fundamentally flawed you know uh policy 12:34 perspective obviously countries have choice you know they they always have a choice but we would rather you know see 12:42 world moving back to rule-based multilateral framework you 12:49 know where everyone benefits i think I agree with professor you know over 1 12:55 billion people since 1990s have been lifted out of poverty 13:02 predominantly in Asia i'm talking about absolute poverty here and that's largely 13:08 thanks to you know trade and and growth associated with 13:14 that trade so it is worrisome that we are now experimenting 13:21 policies that may actually reverse some of these gains which I think were very important 13:27 a billion people out of absolute poverty cannot be underestimated it's quite sign now 13:34 admittedly trade do cause geographic dislocations but the solution is not 13:44 protectionism the solution lies more internal sound policies you know 13:51 structural remedies but also you can deploy tax policy incentives and other 13:57 things to address you know uh dislocations in regions caused by you 14:04 know global trade openness uh so it's not a level but protectionism will 14:12 create more inequalities you will create bigger problems uh already you've got 14:19 significant headwinds for global growth aging population high global 14:26 indebtness climate impending climate crisis so protectionism is going to be 14:33 yet another big blow to long-term growth outlook and that's why growth is barely 14:41 you know at you know sustained at at 3% i think the risk is that we will move to 14:47 a new era where per capita GDP growth will almost disappear if we continue 14:54 down this path really interesting what you say about protectionism having fallout in other 14:59 sectors and we will get on to that about how it might affect cooperation on the climate crisis global health etc etc but 15:07 let's use one country as a particular example about how a nation can react to protectionism so we have the US tariffs 15:15 which in 90 days will come into effect beyond the 10% that Donald Trump has placed let's take two rich countries uk 15:21 and Singapore will stay at 10% bangladesh and Botswana will both go up to 15:26 37% laos will be 48% syria will be 41% 15:32 lisu in southern Africa will be 50% in 2023 the US exported to Lutu $7.33 15:41 million worth of goods loto in that same year exported to the United States $228 15:48 million the US GDP per capita in 2023 was 15:53 $82.8,000 per person in Loto it was $916 gentlemen how does a country like 16:01 Nutu deal with the protectionism coming from the US minister 16:07 well uh look protectionism is an external shock 16:13 meaning it's not a decision by you know the counterparty it's it's essentially 16:19 so how do you deal with it i guess uh you focus on regional integration i mean 16:26 as a an antidote of protectionism so regional connectivity regional 16:33 integration would be one way forward so you know instead of globalization on a 16:41 big scale you focus on how you can deepen and broaden your ties with your 16:48 immediate neighborhood or countries that are still willing to entertain 16:54 rule-based trade so I think that's the only way um 17:00 uh again this is a major shock for many countries i think global supply chains 17:05 are going to suffer uh this will lead to I mean already I think the risk is that 17:12 capital will be misallocated take us I mean take Turkey for example uh we have we are the world 17:20 second largest of white goods exporter we need chips basic ones 17:26 nothing sophisticated we're not talking about four nanometers we're talking about you know 30 40 70 17:33 nanometers if we're worried that countries are not going to supply that 17:38 uh even though it may not be the most efficient way we may have to go into a 17:43 very large capex to see if we could produce them we 17:48 are good at something other countries are better at something so we would rather trade and this is a very simple 17:56 you know uh economics you know theory everybody 18:02 benefits so I don't think you know x country or y country they there's not 18:08 much they can do except to look at you know ways in which uh they could uh 18:16 mitigate the fallout from not being able to sell goods to United States but 18:23 professor that takes a long time to arrange because of course the shock is immediate you can't make deals that 18:30 quickly can you i think uh the particular uh tariff 18:36 rates that Trump announced last week that led to that financial blood bath are not going to come back so I don't 18:43 think we're going to hear again about those numbers after 90 days 90 days in 18:48 US time now is infinity it's eternity uh 18:53 we'll never hear those numbers again where did those numbers come from 18:58 something again so stupid you can't believe that that any uh country any 19:05 country would would do this but the idea is the following as I said if you want to know 19:13 what your trade balance is you earn some income so you sell some services to 19:19 somebody and you buy things and if you sp if you spend what you earn you're in 19:26 trade balance technically you're in current account balance now most of us I 19:32 work for one employer uh my university so I run a a big trade 19:39 surplus with my university and then I run a pretty big uh trade deficit with 19:45 uh the grocery store that I we buy our groceries from and uh if I have to buy 19:51 shoes I run a trade deficit with the shoe store and so forth trump's 19:57 idea just to add to the craziness of it is that you should run a trade balance 20:03 with everybody not an overall trade balance but a trade balance with everybody so you should sell a little 20:09 bit you should work a little bit for your shoe store you should work a little bit for your grocery store you should uh 20:15 you should go around anytime you want to shop you trade something i'll you know I'll write you an essay if you'll sell 20:21 me shoes and you make your living uh somehow trying to balance your trade 20:27 with all of your counterparts well this is insane this is why we have a market economy you don't have to have balance 20:34 with every transaction that you do with somebody and but what Trump said was 'Oh 20:41 Lutu they sell us more than uh we buy from them so they're cheating us 20:48 that's literally what he said literally what he 20:54 said okay is it completely delusional or 21:00 rhetoric it's delusional okay just so you know uh it's weird but anyway now 21:08 then he calculated a formula okay lutu we have to tax them by the amount to 21:15 reduce the imports from them so that we have balance with lutu and then they made some absolutely 21:23 stupid formula that you would not accept in a firstear third week class it came 21:30 out of the US trade representatives office they probably were told do it overnight the boss wants it and then 21:37 they came up with a list of tariffs country by country based on the 21:42 bilateral trade balance you cannot make this stuff up this is not a It used to be not a 21:51 Mickey Mouse country my country but this is Mickey Mouse this is 21:56 not And I'm sorry i apologize to Mickey Mouse he would not do this mickey Mouse 22:02 is smarter than this so we are in a crazy land actually 22:08 with this now it stopped for a moment we'll never hear those numbers again i 22:14 don't know what we'll hear in 3 months god help us really because it probably 22:21 won't have to do with trade it'll have to do with something else but we can't normalize this as what's 22:30 the rationale how to negotiate what to do of course 60 countries immediately 22:37 said 'We'll rebalance with you.' And the president of the United States literally 22:44 used the language I'm about to use i'm quoting him because otherwise I would never say this he said 60 countries are 22:51 coming to kiss my ass he said that in a public speech the president of the United 22:57 States so this is I'm sorry i apologize but it's presidential language 23:04 okay i'm only speaking at high political terms 23:11 so we cannot normalize this we have to say 23:16 no we didn't spend a hundred years 23:22 on 200 years 2007 years since David Ricardo put 23:28 forward the idea of comparative advantage okay and we have been building 23:34 the trade system since the ruins of World War II for 80 23:40 years and we have been building the World Trade Organization which the US 23:46 led the creation of I think it's fair to say for 31 years 23:53 this should not be normalized to try to figure out what is the theory of this 23:59 and it's a more fundamental point ladies and gentlemen the United States is a 24:05 rogue nation right now on many things not just on trade but on making Gaza 24:13 into the US Riviera uh on whatever it 24:18 wants to say it's a little bit of a rogue nation for the world to hold 24:25 together the rest of the world has to say 'We're not going down crazy lane 24:31 we're going to be responsible we're going to go to the UN we're going to go 24:37 to the World Trade Organization we're not going to get into this downward 24:43 spiral because if we normalize craziness there is no way out.' Uh you 24:50 mentioned Mickey Mouse but there's a kind of a theme here from Bloomberg the news agency these are its headlines in 24:57 the morning and the afternoon of Tuesday Wednesday and Thursday tuesday morning 25:02 this is madness in the afternoon a clown show on Wednesday stocks keep falling in 25:08 the afternoon could have been worse thursday morning assessing the damage thursday afternoon Trump blinks 25:16 and by the way if I may because it's interesting because I'm living in this crazy world the Secretary of Treasury 25:23 then with with all deference to a person who has a very hard job he says this was 25:31 planned all along when Trump dropped this can you imagine he couldn't say 25:38 anything else though well yeah I know but to hear this from your Treasury Secretary is not also reassuring cuz all 25:46 you hear is a crazy land rather than what we need to hear which is 25:52 rationality okay so let's make it more general for the moment and by the way ladies and gentlemen in the audience 25:57 I'll give you a few minutes at the end if you want to ask our two panelists a question we'll try to get a few questions in from the audience so to 26:04 broaden it out Minister as the professor says and pretty much everybody agrees protectionism doesn't make economic 26:10 sense because in the longer term it's going to cost everybody so what's driving increasing protectionism not 26:16 just in the United States but in other nations as well because if it doesn't make economic sense does it mean it then 26:22 becomes a political statement from the person uh imposing that protectionism uh 26:29 to almost appear as like a nationalist moment to bring people towards that 26:36 decision maker politically rather than economically 26:42 well it's easy to explain i think what is driving the 26:47 current you know uh what seems like a fundamentally 26:53 flawed policies is first of all let's set the scene I 26:59 mean there's a geostrategic competition between China and United States we know 27:05 that um China has what it takes to become a 27:11 superpower because it has human capital it as state-of-the-art infrastructure 27:17 and now it's catching up in technology united States consider itself 27:23 as the hedgeimon power so we know from history there's 27:29 always been tensions between existing superpowers and emerging ones 27:38 uh it doesn't have to end this way meaning in a trade war or any other 27:43 force but it does in the past I mean history tells us that is you know we 27:50 more frequently see tensions rather than cooperation so what lies behind this 27:56 very simple go back to 20 years ago roughly speaking China accounts for about 8% of 28:04 global manufacturing Today China accounts for more than 30% 28:10 of global manufacturing who lost ground united 28:16 States European Union and Japan united 28:22 States clearly also sees this again go back to 20 years ago and just visualize 28:29 a world map um which country 28:35 commands as the main trading partner of the rest of the world maps are all over 28:40 the place clearly it was United States 20 years ago today it's China 28:49 now normally uh what you would the way you would 28:55 respond the way I would respond is that look we need sound policies structural 29:01 reforms to regain ground instead it looks like this rivalry 29:10 combined with lack of obviously clear understanding is that it leads to to go 29:17 after quick fixes mhm and quick fixes which is also to do with populism 29:25 nationalism is to blame others and is to present it in a simple 29:30 fashion the reality is you have to be more competitive you know you have to invest 29:36 in upskilling reskilling your population you have to invest in your 29:42 infrastructure and you have to you know there's a lot of I mean there's a long 29:47 list of homework but those are politically difficult to deliver they take time and they're difficult so 29:54 structural policy has been lacking in most countries and when you can't deliver 30:02 structural transformation then you go either you rely on monetary policy to fix 30:10 things you know monetary policy in many parts of the developed world have been 30:16 doing the heavy lifting over the last couple of decades in the face of difficulties so my point here is that I 30:26 think we know what drives it is losing ground but how do you regain ground 30:33 again the sophisticated way would be to do the right thing and deliver on 30:40 reforms the easy way would be to blame everyone else and come up with high 30:46 tariffs as a fix uh let's see um okay so protectionism is 30:55 also not helping your friends to concentrate more on yourself rather than 31:02 the outside world we know that the dramatic drastic cuts to USID the Agency 31:08 for International Development has already or is going to cost lives 31:14 myanmar's recent earthquake the Americans have been for 31:19 decades maybe the most important first responder sending hundreds of rescue 31:24 workers they sent three administrators they didn't send a single rescue worker they laid off recently some 31:32 people working for the federal government on uh the US nuclear program 31:38 they realized very quickly within a couple of days that it was actually a national security issue so they were told to come back to their office the 31:45 office said 'Sorry they've been uh excluded from their federal email so we can't get in touch with them.' So they 31:51 couldn't re-employ them professor Saxs when you were president of the Earth Institute at 31:57 Columbia University it focuses I've got to read this from the notes it focuses on 32:02 sustainable development this institute at Colombia including research in climate change geology global health 32:09 economics management agriculture ecosystems urbanization energy water 32:14 everything that we need to live so how does protectionism affect 32:20 these kinds of relationships between one country and another country 32:26 yeah I I want to answer that by continuing on with the brilliant 32:32 explanation that that the minister just gave about the hard stuff and the and 32:37 the easy stuff so uh just to say in American 32:42 politics the swing states in the presidential elections in the last uh 32:47 three elections in particular have been the Midwestern states uh so those are 32:54 states like Michigan Indiana Illinois Ohio Pennsylvania Wisconsin Minnesota 33:01 these are states that can go either way and those states did 33:09 suffer a decline of employment in manufacturing not only or even mainly 33:17 because of trade but also heavily because of automation over the last 40 33:22 years i come from Detroit which is uh Motor City used to be uh and uh I used 33:30 to go uh when young on school field trips to see the assembly lines and 33:36 there were actually workers on the assembly line but now if you go to an automotive plant it's all robots very 33:44 very few people inside that's not because the jobs went overseas in that case that's because uh the assembly line 33:51 itself became an automated phenomenon so Trump is 33:58 giving an answer to those swing states it's China's fault it's Mexico's fault 34:06 it's Lutu's fault what the minister said is really 34:12 important that when he said that trade benefits the economy but it could hurt 34:18 some sectors and what you do is not stop the trade but you make sure that you pull 34:26 everyone along maybe in a regional policy or maybe uh in job reskilling or 34:32 maybe in some other kind of public investment or education policy here's 34:38 where the US really failed over the last 40 years we let the inequalities widen 34:46 and widen partly because of automation partly because jobs did go overseas but 34:53 for the right reason they had comparative advantage in in those jobs skilled people got better and better 35:01 salaries lower skilled people had their living standards fall the gap widened by 35:07 the way not just the income gap the life expectancy became 10 years or more so many of our 35:14 epidemics so many of our social problems relate to this widening inequality the 35:20 United States political system didn't address it at all for 40 years and that 35:29 comes to what I mentioned the corruption of the political system when part candidates of both political parties are 35:36 paid by rich donors for their reelection campaigns and both parties then become 35:43 the agents of tax cuts and uh and and uh no uh really addressing the social 35:52 conditions you end up with a Donald Trump coming in and selling a 35:58 pseudo explanation it's all China and selling a pseudo remedy a trade war what 36:06 the auto workers are going to learn right now is they're they're going to 36:12 lose jobs by even the tariffs that have been put in place because we need the 36:17 intermediate parts brought in from elsewhere now they face higher costs and 36:22 the United States can't compete at all with Chinese electric vehicles china the 36:30 United States has basically handed China the electric vehicle market for the next 20 years so did Europe by the way europe 36:37 delayed the transformation to electric vehicles said we produce great internal 36:42 combustion engines we're going to continue to do that the world actually needs electric vehicles because of the 36:49 climate crisis so all of this is to say the real hard work is to think ahead mhm 36:56 the country by the way in my experience of working all over the world in the 37:02 last 40 years that thinks the head that thinks ahead the most is China china's 37:09 success is not random china's success actually is a lot of 37:15 forwardlooking planning in 2014 China issued a document called made 37:22 in China 2025 and it wasn't a protectionist policy it 37:27 was we need to invest in the technology so we can be at the forefront i think in 37:33 eight of the 10 sectors that were identified there China succeeded in reaching the forefront in 2017 China 37:41 made a plan for artificial intelligence this is already eight years ago deep 37:47 Seek didn't just come out of nowhere it came out of a long-term strategy so this 37:53 is hard work that actually pays off this 37:58 is what every government should do this is what every country should do is look ahead now you mentioned very interesting 38:07 idea we we got a president who doesn't understand 38:13 and maybe doesn't care about the future in the same way but just to say the 38:19 biggest issue on the planet should be the climate crisis not all the things 38:26 we're endlessly talking about and every part of the world is going to suffer 38:31 terribly by what has been built in in terrible very dangerous climate change 38:39 it's it's out of the headlines but you know I had a 38:44 very difficult job i was the director of an institute 38:51 with 300 climate scientists for 14 years some of the world's leading climate 38:57 scientists the reason it was a hard job is that every week they came up and told 39:02 me it's worse than we thought they would give me 39:08 endlessly grim news and the lead climate 39:14 scientist at Columbia University is a man named James Hansen who I regard as 39:19 the world's leading climate scientist and he produced a study in 39:25 January that said 'It's much worse than we have thought the world's temperature 39:32 has gone up by.3 degrees Celsius in three years we have had 21 months of the 39:40 last 22 above 1.5° that's the new baseline by the way 39:47 that's not because of an El Nino effect that's the new baseline we already blew 39:53 the limit that we set 10 years ago in Paris that we said we would not exceed 39:59 we're already above it and what Hansen says is we're rising at an accelerating 40:06 rate now it's the average rate is probably between.3 and point4 degrees 40:13 Celsius per decade now on average so we'll be at 2° 40:19 excess what all of this means is profound danger 20 years from now 25 40:27 30 but we're already seeing terrible danger today it's I don't want to minimize what's already happening los 40:33 Angeles burned down massive forest fires in Korea last week it's everywhere i'm 40:39 My wife and I are non-stop traveling every single place we go is some kind of 40:45 climate crisis literally in some it's a drought it's floods it's heat waves it's 40:52 pest infestations it's forest fires and the sea level is going to rise by many 40:59 meters which is not great for a stumble by the way and not great for coastal 41:06 areas it's very dangerous what is built into the system now what is Trump's 41:12 answer for this yesterday King Donald issued an 41:18 executive decree to bring back 41:23 coal it's willful destruction of well-being 41:30 willful and that is again he pulled out of the Paris agreement what I'm hoping 41:37 ladies and gentlemen is the other 192 41:42 members of the UN have to say 'No we're not entering a 41:50 crazy land we're going to take care of our future right now i live in a crazy land but the 41:59 rest of the world has to avoid the crazy land has to avoid normalizing 42:05 this i don't know if any of you saw it during the height of the coronavirus pandemic an Australian artist uh 42:11 cartoonist drew a cartoon which had the first tidal wave kind of a tsunami of um 42:18 economic recession there was a bigger tidal wave tsunami behind it which was COVID 19 and then a huge one over both 42:26 of them which was the climate crisis so get ready i'll give you a chance to ask a few questions but I just wanted to 42:31 address one final issue to the minister and I was getting a bit depressed professor when you were talking about 42:36 that i tell my kids since they were born they're now 21 and 19 live anywhere you want in the world but don't live near 42:43 the coast or near a river um the professor is saying that the climate crisis is going to be one of probably 42:49 I'm kind of you know putting words into your mouth professor that del globalization if it becomes more and 42:55 more of a popular sentiment and policy the climate crisis will uh be affected 43:01 because of a lack of cooperation through delobalization minister what other big dangers do you see if the trend of 43:08 deglobalization gathers pace well as I mentioned 43:14 earlier in addition to the impending climate crisis which could have a 43:20 devastating impact on the future of humanity you know I think we are faced 43:28 with significant headwinds uh that already exist uh but some of 43:34 them could become more complicated one of them 43:39 is high global indebtness mhm if protectionism you know uh 43:48 clearly goes the way it is today meaning if we really go into these trade wars 43:55 and if this leads to higher inflation even for a couple of years if 44:02 that's the case then that means long-term interest rates are likely to 44:08 rise and if that is so then many countries 44:15 are already struggling to manage the debt service you know global indebtness if 44:22 you look at it overall indebtness was 328% last year 328% of GDP yeah this is 44:29 huge when interest rates are very low but when rates go up 44:37 clearly that's a big issue i mean look at you know look at the Turkish 44:43 scene um yes we've had a you know domestic 44:48 uh you know I mean domestic issue that led to some market 44:55 turbulence but what happened post April 2 CDS have gone through the roof cds are 45:03 counter risk premium you know our external bond yields 10 year five year 45:08 they all gone up significantly on the back of these tariffs 45:15 i think there are already many countries according to UN that pay more 45:21 in on interest on debt than what they you know are able to earmark for 45:29 education and health care combined so I think you know we already have 45:36 issues such as indebtness that could that the current you know trend could 45:42 exacerbate i mean aging population already is could create huge constraints 45:48 on public finances going forward um so those are some of the 45:54 additional headwinds that exist that could actually serve as speed limit or a 46:00 drag on growth so I think you know the world and I 46:05 agree with professor that um the world has to you know rather than going you 46:13 know down this path we need to cooperate more we need to work more closely on 46:19 climate change on how to address other problems because protectionism will also 46:26 lead to probably global inequalities you know if you don't allow AI 46:33 chips to be freely available to everyone clearly that's a big issue 46:39 because then many countries will be left behind in terms of tapping this you know 46:45 AI that has immense potential to boost productivity you know protectionism is 46:53 not limited to trade of goods and service it's now associated with financial 47:01 flows you know with diffusion of technologies through 47:06 FDI so clearly um I think we'll be worse off unless we 47:12 cooperate unless we return to multilateralism uh but sadly right now 47:18 it's all about shift to minilateralism you know a few countries 47:24 getting together but that's not enough i think um issues are too big for few 47:31 countries to address i think you know the rest of the world should come 47:36 together so yes there are significant challenges uh when you mentioned aging population I have a good example from 47:42 Europe that only two countries on the entire continent are having enough babies to sustain their population level 47:50 that's Ireland and Portugal so you imagine the pressure on the taxation system and the spending on those other 47:55 countries that are not sustaining their population levels and are just getting older and older and older okay let me 48:01 look at the back as well if anybody has any questions we've got about 7 minutes left and please make it a question not a 48:07 lecture because if it's a lecture I'll have to stop you gentlemen over there and gentlemen over here okay please 48:12 introduce Oh there's a microphone thank Thank you very much 48:17 doesn't work yeah does work okay thank you very much 48:24 uh I have a question for Mr jeffrey Saxs uh my name is Sarcer and I'm from Haraji 48:30 News um so you mentioned that we shouldn't look for a rationale behind 48:36 the actions of Donald Trump but just just to be a devil's advocate I just 48:42 want to understand their point of view which they mention yes trade deficit and the national debt of the United States 48:49 but also they mention the hard industries that left United States back in the day so uh what I'm trying to 48:56 understand is uh if United States gets into a confrontation with global powers 49:02 such as China or Russia or any other state maybe even Europe one day uh is it wrong for them to want their hard 49:10 industries back and this is their rationale to put these tariffs on because Donald Trump mentioned that uh 49:16 we are buying cars from Canada that we could have been producing uh before so 49:22 uh is there a rationale behind at least on the hard industry part thank you yeah 49:29 you know in in trade theory or trade concept there is the national security 49:35 rationale uh so you may want to procure domestically to have a an armament 49:43 industry that's quite different from imposing tariffs on 150 countries in a 49:49 completely arbitrary way in fact the right policy might be local procurement 49:56 from domestic industry that has nothing to do with trade policy at all 50:02 so that is not an argument for what he's 50:08 doing but I would add one more point we don't need an arms race and we 50:15 don't need a war actually diplomacy is really cheap 50:21 compared to war that's why we're at the Antalya diplomacy forum not the Antalia 50:27 military forum uh so if Trump really wanted to save some money we 50:37 have almost 800 overseas military 50:44 bases in 80 countries this is crazy 50:51 so if you wanted to save money and be close the budget deficit I would close 50:57 hundreds and hundreds of military bases and leave all these countries at peace because 51:06 wherever there's an American military base there's a big headache believe me 51:16 sir okay is your question to the finance minister is your question to the finance minister 51:22 or to the professor because I want to even things up i would come back to you if it was for the professor but if you 51:28 Okay let's address it to the finance 51:35 minister 1212 uh my name is Realel Miller uh formerly of the OECD formerly 51:40 of UNESCO and formerly an adviser to finance ministers so I can address my question to a finance minister one of 51:46 the things that's tremendously tempting and it was really in part part of what the last question was about was the hard industries right so now let's go back to 51:53 being an extractive economy coal mining you know uh be in Canada I'm Canadian 51:59 originally beaver skins right that we sent over so resources right now we have 52:04 seen in the past historically when there was a move from natural resources to manufacturing it was quite difficult for the society and the politics to change because the oligarchs of resources We're not the oligarchs of manufacturing so I have a question which relates to the historical context we're in what if we're moving to intangible economies what if we're moving away from tangibles in general and those robots are going to take care of producing intangibles how do we talk to people who are nervous and worried because they're accustomed i go to Germany and I say 'Can Germany be rich without producing cars?' And they go 'Never.' I said 'Could could the could Britain be rich without producing coal?' Never and so we have this historical difficulty of making the transition and I wonder what you can say in a country like Turkey where you are making the transition through industry and China through catchup and convergence but can we begin to talk about going beyond the tangible 53:04 economy of course we can imagine because if you look at last couple of hundred years there has been significant you know trends i mean if I'm not mistaken if you go back to 200 years ago 90% of employment was in agriculture today in developed west it's about 1% 2% uh but but we are much better off so I think we can uh extrapolate it's true that uh you know we may achieve artificial general intelligence soon meaning within a year or two and according to exports maybe artificial super intelligence within five years and assuming that also gets converted in robotics and advanced manufacturing chances are the 54:01 traditional employment will no longer be there so we have to come up with obvious so that's why I think you know it seems like today's debate considering what is ahead of us a bit outdated so I I I I hear what you're asking and it's really complicated we all have to think i remember attending a global economic symposium in KE uh back in 2007 and one of the session because I was finance minister and you know well treasury they put me in that session in that panel and the question was uh when do we start taxing robots so look uh yes I I do see that happening i don't have the answer but certainly we have to think about it it'll be interesting to know if a robot will need a work permit as well right okay that that's it the time is up ladies and gentlemen it was always going to be too brief with these two particular gentlemen C

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