Affected companies and disrupted billions of lives and jeopardize development process. The june edition of the world banks Global Economic prospects which motivates todays conversation and visions a 5 1 4 percent construction in global gdp in 2020. This is a different recession sinceworld war ii. And a drop in capital incomes since 1870 and it is a timely and vigorous report informed by an assessment of the fundamental drivers of longterm growth includingthe collapsing investments which will slow capital formation. And the dislocation of trade and supply linkages among others. Beyond the headline Economic Growth numbers the pandemic is having a disproportionate effect on low Income Countries where the dependence on commodity prices, food is the largest and in a way economies are dominated by the factor with which lowers its ability to adjust to measure such as confinement similarly, the most vulnerable populations in the advanced economies are relatively more exports as such a pandemic is likely to leave a legacy of even wider inequalities between and within countries unless quality response is integrated with dimensions area and it was refreshing to see the report on inequality. But as disruptive as the pandemic has been to the lives and economies around the world, there is unfortunately no great uncertainty as to whether we have seen the worst case scenario. Notably the epicenter of the pandemic appears to have rotated to the south where the ability to combat the virus is more limited and where fiscal policy response and sufficient economies are constrained by elevated debt levels in several countries and by and an ability of countries to order in their own currencies. The lack of coordination and cooperation means that the global systemremains only as strong as its weakest link. And the virus will remain a threat the Global Economy unless it is eradicated in every country. We are also seeing a resurgence of new cases and some countries, notably the United States causing policymakers to dialback their opening plans. Meanwhile encouraging progress and the timing for the discovery of a vaccine or treatment remains uncertain. The complexity of the environment raises several questions. How sensitive is the Economic Outlook particularly that rebound projected for next year or the assumptions about a timing of the unreliable vaccine treatment. What will be the longlasting effects of the pandemic on the fundamental drivers of Economic Growth such as Human Capital investment but also on critical sectors that were hit particularly hard such as tourism. What do we make of the apparent disconnect between main street and wall street with stock market indexes have recovered much of their losses despite highly uncertain economic environment. Finally, are there any Silver Linings . Where do we see opportunities to peel back and find stronger economies . How should policymakers announce realtor realities while seizing the opportunity to revive the sluggish growth global activities which had been threatening ager economies with secular stagnation. These are questions on our minds at brookings as we emerge into a post covid Global Economy and we are fortunate to have with us a Diverse Panel of experts who help make sentence of this all and i look forward to the conversation which will be moderated by my colleague david wessel and our World Bank Bank colleagues ayhan kose. Thank you and over to you ayhan kose. Thank you and thank you for organizing this session and being a part of this distinguished panel. Let me share my screen quickly. So looking into our report Global Economic prospects in june. Because of the time constraints im going to focus on three points. First is the point about the shorter reparations of the pandemic read this is going to be the best and most synchronized in the global recession since the second world war. So emerging economies, into this first recession these economies are going to experience is a group on record. Risks are still tilted to the downside the second point is about a longterm implications of the pandemic and there we have seen before the recessions that are going to be in the context of the pandemic theyre expecting a potential output, meager investments and weaker productivity over the longterm finally , i arson priorities on the agenda to discuss and then addressing the Immediate Health crisis is the urgent priorities but beyond the crisis, policymakers need to look forward and update policymakers to lay the foundation for strong and growth. Throughout the presentation im going to use this acronym, he and these are emerging. How do we see the Global Outlook this year and the next year. Right now, its clear that there is a plunge in activity around the world. Theyre expecting Global Growth to be around 5. 2 percent this year. When you take into account economies contraction isgoing to be about , but in an emerging market , the economies are really the engines of Global Growth for an extended period of time. As a group no will experience the first recession and they will see their contracts grow by 2. 5 percent. If you look around theregions , you will see differences but pretty much a serious downturn is underway. In terms of the asianpacific theyre expecting positive growth mainly because china will grow this year and its going to be the only asian economy that will see positive growth by about 1 percent. They push growth to about. 5 percent. Other than that, all the regions will have is contracted. Think the caribbean. It will see a contraction it has never seen over the past 100 years area locally there will be around 7. 2 percent. In africa, europe and central asia, middle east and north africa , regions and other countries with commodity exporters who see significant declines in their growth rates. Even in south asia, a region that has no commodity exporters will see historical contractions contracting by about 3. 2 percent. Next year growth will come back but we are expecting a theoretical recovery in the downturn this year. This is a truly historical global recession. If we go back all the way to ancient times if we have a reasonably good data, there would have been 14 global recessions and each global recession you saw Global Economy contracting in protecting incomes. This will be the fourth deepest global recession. The deepest one since the second world war. Here are three global recessions are important to understand here. Two of them will were associated with world war so if you take all those two, this global recession will be the deepest since 1870 after the Great Depression. The future of this episode is global economies will see the highest share of economies in serious contraction, slightly more than 90 percent this year read this number is higher even than what we saw in the height of the Great Depression area there are risks and these risks still tilted to the downside. The single most important risk is an effective way of pandemiccoping. If you look at the reality , the pandemic is pretty much under control in these economies except the United States. You can take out the United States and you will see that the number of daily inspections went down significantly. Since the beginning of march. But on the other hand in emerging markets but the economies, the pandemic is in full force and in the caribbean, in subsaharan south africa, you see a significant increase in the number of infections these are the regions with limited Service Capacity and limited Testing Capacity so we have a limitedunderstanding of the gravity of the pandemic in these regions. Now, beyond the shortterm this pandemic will have longterm implications. There is no question that there are large losses. And these losses are not going to be recouped next year when the growth comes back. In fact, it has happened to remove the 2009 global recession we are not going to go back to prepandemic levels anytime soon. These types of recessions will have longlasting stars in these economies and will affect physical relations, and of course productivity. Another important consequence of this pandemic is how the global economies have pivoted to basically generate growth is going to be constrained by the shock we are going through. Prior to the pandemic, global consensus donald trump says the Global Financial crisis. In 2010, forecasters thought that the Global Economy can use a would generate growth 3. 2 percent. This number declined the low three percent in 2014 and now it is around 2. 4 percent. In all likelihood, this pandemic will have a long shelf life over Global Growth expectations. Now, this policy authorities provided an economic response to the crisis. This response is specific but of course sooner or later there will be a heel. That deal will be in much higher debt levels and much higher decisions and its going to be important, governments to basically try to control the spread of this when the time comes and positive frameworks to basically reach sustainable levels of debt. This is an important risk you need to Pay Attention to. If it. [inaudible] this crisis so far has not led to the type of systemic Financial Stress you saw in previous episodes of these recessions but we shouldnt deceiveourselves. So soon after the Global Financial crisis that there might be repercussions associated with these especially of these economies by the index. Policy priorities are clear. In the short term healthy economy is key andthis will require supporting Healthcare Systems , helping Global Growth and eating the idea to keep the economy afloat and supporting the communities in intelligentways. Policies globally are also difficult and in this context we went to those economies that will open economies unilaterally in their desperate times we are facing now area if the crisis relates policymakers need to move forward and put in place policies for sustained longterm growth. They have developed a number of important basis. Theres only discussion about what is urgent and what is important read that urgent policy issues here, in the context of the shortterm and there are typically important policy priorities that we need to think about the aftermath of the pandemic. And they are institutions and government practices are going to bedifficult. Improving investment transparency to attract the necessary goals to support activity moving forward. Overall, alternating policy globally to address global challenges is key. Including those related to Global Public health and providing the necessary formation in these types of challenges emerge. Global trade and Financial Systems also experiencing headaches, multilateral agreements to push forward and agreeable and basically more friendly trading system and Financial System necessary to establish. It sustained the biggest probability of emerging and adjusting themselves. In this context its going to be important to address the challenges associated with climatechange. So like we saw during the Global Financial crisis, there is a discussion about the shape of the recovery. Numerous shapes have been proposed. The be shaped, ushaped, the vshaped. This cruciate recovery. I think this debate is useful to simplify the kind of specificity that we are thinking about as global economies trouble with the pandemic. Lets make no mistake about the nature of therecovery. Its going to be a painful one and policymakers need to provide immediate comprehensive responses. And think through how they are going to work through it eventually. Thank you. Thank you ayhan. Im hoping everybody can see the whole panel at this time. I am a david wessel director of the Hutchinson Center at brookings. Im joined by my colleague eswar prasad and he splits his time between brookings and cornell which is why you have cornell in the background in case you are wondering and joyce chang whose head of Global Research at j. P. Morgan. You can tell from her backdrop. She only has one employer and brahma Sangafowa Coulibaly who you met at the beginning of our program who is the president of Economic Development at brookings is going to join us as well , given his interest in africa and id like to start with joy and joyce, were interested in whether your view of the World Economy matches the one that i ayhan laid out and what you see in emerging markets. In talking about your recent report i saw powerful growth rebounds in the emerging markets. What we know in ayhans presentation is the diverse set of markets, latin america is different from africa which is different from china. So how do you see theworld and particularly how do you see it differently than the world bank . Thank you david for those questions and thank you to the Brookings Institution for the invitation and for annex a report. Let me just start with the first question that he brought up is why is there such a disconnect between main street and wall street and then i will go into the emerging markets discussion. And the first thing i would say its just that this time around compared to the Global Financial crisis we had an immediate proactive response from all of the Central Banks , developed countries and emerging market Central Banks and if you look at the size of the expansion of the Balance Sheet, we estimate that it is about 20 percent of gdp. If you compare that to what happened during theGlobal Financial crisis , that was about six percent of gdp so you expanded the Bank Balance Sheet by more than three times what we saw in the financial crisis. At the same time ifyou look at how low Interest Rates are right now , we estimate that 70 percent of global Government Debt has a yield of 50 basis points or less. So youve got negative yielding that, then you have basically zero yielding that for 70 percent of the market and thats pushed money into the equity markets. At the same time market liquidity is moving forward here so youve got to be careful going to have this result return in volatility. We estimate liquidity is still about 60 percent weaker than it was below in the market that what it was prepandemic. So thats the first thing id say about the disconnect between main street and wall street is we see that Balance Sheet that has expanded by 3 trillion area you see on a buying spree of epic proportionshere. But let me turn to the Growth Outlook and the growth forecast and we do agree very much with ayhan this is the largest supply in 70 years, thirdlargest and 120 years and we have advanced economy contracting by four percent and in an emerging market, you can take out china because we had China Growing one of the few countries growing positively two percent and youve got a contraction in the order of six percent or more in the emerging Market Countries so i would say that we do see a rebound because the first half of the year we had about a 16 percent annualized drop in gdp. So when you turn everything off youre going to get a rebound. This is the easy part of the recovery and i would say its not a complete recovery with respect to gdp but at the level of gdp at the end of the year we think it will be about four Percentage Points below where it was prepandemic so youve got these shaped numbers that are going to be printing we see 20 percent after gdp in the second half but if you lookat where we are with respect to gdp, the level of gdp , still four percent but before where we were a prepandemic and its the income loss, product loss, productivity losses are going to be very large and longlasting damage so youve got another one or two months where the data points coming out are going to look quite good but this is going to be trickier in the Fourth Quarter of the year because many of these income supports will begin to be lost and what are we left with . Were left with a deficit where estimating at 13. 8 percent of gdp, highest in 80 years area where looking at Public Sector debt of 15 to 20 Percentage Points higher and we would break that down a third lower growth. And were looking at in the emerging markets, really 3 different scenarios for emergingmarkets. Mine, if were in recovery right now thats what korea and taiwan are doing better so the more Asian Countries are faringbetter. If you take a look at latin america, were looking at nine percent contraction or for latin america and this is where the pandemic is not peaked yet. This is where we are seeing really some of the biggest losses that will take place and then you have the subsaharan african countries, some of the highly stressed where there is forgiveness or all these official relief measures that have been in discussion by official creditors and by the g 20 so its hard to characterize emerging markets as one block so china is important here. China we estimate every one percent decline in growth is about four percent of the Global Growth so the average for china , thats why we look at the numbers x china and with china and chinas recovery including theexports has been surprising. What were looking at is a cry for trade thats been going down consistently over the last couple of years that going to continue and let me finish with the risk ahead. We didnt look at the us elections, us china tensions, brexit as well as the possibility of a second wave. What you see is a stubborn first wave that there is still yours of a second wave and sometime before you have a vaccine ready for widespread use. But losses at the corporate level will be significant despite the market rebound weve seen inFinancial Markets. We estimate the corporate profits dropped by 70 percent in the second quarter. Were at a six percent default rate, the highest in 10 years and we battle hundred 50 billion of that debtdowngraded from highgrade to highyield. You still see this tremendous level of support thats been coming from the g4 Central Banks more broadly which has supported the markets and youve seen that its not just developed country Central Banks. Central banks are now purchasing packages as well so whereas in the Global Financial crisis it was about hazing we exhausted a lot of that and weve gone from credit easing and thats kind of the lasting consequences that we need to monitor going forward. Let me put a little bit on the market thing. It says that staff market has been strong despite the scary headlines about the economy. In part because there are few alternatives for money andthe simple may attractive. But if the market basically assuming there wont be a second wave or a decline in vaccine, decline in globalization or longlasting decline in productivity, if the market fully factored in for some ofthe risk that you elaborate . I think the dissent is going nowhere anytime soon, the Central Banks are in this for the long haul and this has been a real paradigm shift. I think theyre assuming there will not be a lockdown like we saw in march and april. Even if you have asecond wave its not going to be met with that type of lockdown. That we are not seen as big a wave of fatalities as we saw a few months ago. I think what the market is looking for is a search for yield. 80 percent of s p 500 stocks have shareholder yield higher than the us treasury yield so even though 70 percent of the debt at close to a zero yield , there has been a search for yield in the equity market and it also has record into issuance out of the bond market and we think it works at 1. 6 trillion this year because corporates are trying to get ahead of this. Theyre trying to create their Balance Sheets and raise money near zero because they do have a cushion if this continues to endure but i would say that its nota vshaped recovery. Its a partial v and what were seen as a necessary but insufficient condition for a vshaped recovery. Its a very incomplete recovery. Eswar, react to whatever you want but i have one question. Joyce and ayhan have documented just an extraordinary response by policymakers fiscal and monetary and of course, theres one set of people, economists. Many of them we know who say that god and this is the reason were not looking at Great Depression 2. 0 and i hear a lot from laypeople about this seems like some kind of perpetual motion machine. How long can we go on with the government issuing trillions of dollars of debt and printing enough money and buying half the bonds the treasury issues and what are the risks of this sort of policy response and perhaps its a bubble . Certainly listening to who started reading ayhans report and listening to joyce that theres a great deal to be concerned about but perhaps we should also be humble enough to recognize that the economists are terrible at forecasting turning points of recessions and its a lot easier to get carried along with whether the economies viable and certainly all the indicators would suggest there is a lot worse coming yet. The Financial Markets seem to be doing okay and joyce has given us reasons why that might be sobut its not related to fundamentals. But there are a couple promising things that are worth keeping in mind. Who would have thought just two months ago or three months ago that the chinese economy would be where it is today where as joyce pointed out the recovery, the Manufacturing Sector is doing all right and theservices sector does seem to be picking up. The capital and merchant merchant economies remarkably are picking up once again even though there is a lot to be concerned about especially among the weaker emerging market economies. And even in the us theyre beginning to see some of the purchasing index numbers beginning to come back up. So perhaps its not all doom yet although certainly at this stage the doom story is a lot harder to tell and its easy to delve partly because its indicative of whats going on in the demand and supply components. The initial phase of this did look like a massive demand search although there were supply disruptions because of the lockdowns as well but there was the projection that once we got past the lockdowns the supply of tech would be better taken care of and on the demand side certainly microeconomic policies fiscal and monetary policies can counteract some of the downturn and as you pointed out david, there have been huge amounts of stimulus that practically every major economy has thrown at this problem. And its at least forestalled the worsening of demand although whether its supported demand enough to provide a robust recovery is far from obvious here. But the bigger question in my mind is whether these policy tools going back to your question about the risk calculus are really going to help in terms of supply. I support points out significant concerns about productivity and in fact coming into thisrecession , we already had very slow productivity growth coming out of the last recessions that were spurred by the Global Financial crisis of 2008 2009. Five investment across the world was what we gave in china which has had decent investment growth, much of that has come from investment by the Public Sector by state owned Enterprises Rather than private sector investment. The other concern is that even though the Financial System doesnt seem to be in the distance and again she pointed out this is an important distinction from previous recessions when the Financial Systems especially the Banking System came under enormous stressthats not quite happened this time but financing conditions are still very tight , especially for the firms that are very important in employment growth and productivity growth in practically every economy and these are the small and Medium Enterprises and especially in economies like china and enterprises in the Service Sectors as well so looking at the longerterm prospects how long this downturn could be, i think there are very significant worries on the supply aspect. Again, joyce and i have both referred to the disruptions that may be taking place to Global Supply chains, to firms both domestic as well as broader supply processes. And these may be with us for a while. Here again one could potentially tell of about the story, many firms, many countries that have been experiencing significant negative effects on these supply chain disruptions so one of these answers might be onentering, another obvious answer might be diversification of supply chains. Both of these ought to lead to more investment. Once things settle down. Because when youre trying to read bigger supply chains thats going to lead to more investment. Perhaps we will get less of the benefits of globalization and the costeffectiveness of Global Supply chains but you could get a shortterm birth boost in investment and therein lies one other problem that i would say which is confidence. Business and Consumer Confidence has shattered right now. This is already we are not investing as much as they could, even for firms sitting on large amounts of cash specifically because they did not feel the environment was conducive. Coming into the pandemic, it was a period of significant trade tensions between the two largest economies in the world and tensions between the us and many other Major Trading partners. So investment is already weak. Business process is weak. One thing that happened in the 2008 2009 financial crisis is the g 20 did stand together and say we will do things to try and control the negative effects of this financial crisis. What is remarkable is that this time we have hadNational Governments , Central Banks to the plate as joyce pointed out even more dramatically than they did during the crisis but i think at a time like this the sense is that there is a concerted strategy both at the domestic level and global level its really important in bringing back Business Confidence and Consumer Confidence and we havent quite seen that happen partly because of lack of leadership but also because i think blame mongering about the pandemic seems to have become an important pastime of National Leaders rather than getting to grips with the problems that we face at the national and Global Economy. So i think that is going to be an important thing to fix and to my mind one of the Critical Issues as we look at what the shape of the recovery is going to be and whether in fact it gets to be more prolonged is whether governments in addition to these measures theyre taking with fiscal stimulus really provide some sort of concerted strategy for dealing with the public elf dimensions but also the broader policy coordination of these policies for domestically and globally and id im not that hopeful but i hope things will change let me ask you eswar how would you grade the performance of the International Monetary fundand the world bank . Have they been aggressive enough . They tried hard. The willingness of the imf and world bank to use our resources to the extent possible to buffer especially the much weaker economies and to try and coordinate that relief has been very much along the lines. Certainly theres been some resistance from National Governments that i think for the small economies, universal moratoriums on debt payments but ultimately ground in the form of debt relief or debt writeoffs are going to be crucial. None of the standards mechanisms that came into play in previous crises are working well for the emerging market economies and developing economies right now. You have china, you dont have china even though their positive growth pulling the World Economy including commoditysupporters out of this problem. For developing countries rely on export revenues. Even when economies are deeply shaded, theres no external demand. So in practically every dimension, the smaller developing economies are getting hammered. I think the imf and world bank certainly done the right things but a lot more needs to be done because after all resources of evs institutions are limited and all they can do is provide capitalistic efforts for National Governments and ultimately for the private markets. One of the things that both the world bank and j. P. Morgan report ois that this prices has not been as bad in africa as its been in latin america. Penny goldberg used to be the chief economist at the World Bank Back at yale did a presentation at the brookings presentation on Economic Activity where she expressed surprise that covid hadnt been more devastating in the low Income Countries with a very robust Public Health systems so i wondered whether you think that a, should we believe the data on africa, that africa has been relatively less hard by this. Be, if this is just calm before the tsunami hits. So it is true that the numbers for africa have been low when you compare it to other regions but the reality is there going up daily. And were seeing no signs really of slowing down. So this would reflect the reality on the ground and then africa is spared bythe worst of it. It suggests some of the policy measures have been taken have been effective. But i will caution because detecting cases means you also do widespread testing and the Health Capacities are really such that we can be confident that its been sufficient amounts of testing to declare that africa will be spared by the worst of it certainly that would be the case, but for that to happen we need to step up in terms of testing to be able to know for sure. In terms of economic front, i think really africa, looking at a very robust order century in terms of Economic Growth going from 2000 and 2020 25 two agreed to have a five percent global outbreak and that would have been home to some of the seven of the 10 fastestgrowing economies in 2025 so this is a moment where they came and disrupted that structurally. On economic numbers in the forecast and including the ones in the World Bank Report relatively speaking its not looking bad but you got to remember that publication is high so we need to normalize this and look at it in per capita income terms so you would see a little bit of narrowing of that gap in terms of how covid is affecting the economy and its the worst Economic Performance in 30 years so for them this means quite a lot. And as i alluded to earlier, there have been its from every dimension. You have about 55 percent in the first months, but in the 2014 shock it took several months for it to reach that level of decline so that certainly low, we have citizens that make up a big chunk of the World Economy theyre going to profit from it and if you look at methods for example, its about 85 billion in 2018. Then compare that to og eight which is about around 50 billion so this show you the extent to which this can effect the economy but importantly these economy is highly reliant on the Informal Sector so in confinement has meant that its very disruptive Economic Activity for living wages etc. So thats also going to have its own economic effect so in many ways like having many crises and one for the african economy but its comforting to hear that its less in terms of recovery because in africa its the performance of the Global Economy in the sector would be really important. If you remember africa is one of the regions where the economic crisis preceded the Health Crisis only because of the reliance on external sectors so similarly as we are seeing signs of recovery from some external environments particularly china we should begin to also see some positive spillovers from it but its chief issue is how to come out of it less being able to preserve fundamentals and their ability to mobilize resources to really respond to the health and economic fallout has been a significant complaint. According to major policy about one percent of gdp in terms of physical response for the event economies, particularly the us we seen over 10 percent and other Major Economies somewhere around four or five percent in african countries, less than one percent because these countries are really unable to follow in their own policies to muster the kind of physical response necessary to get ahead of this crisis. This is where imf and the world banks and other institutions efforts have been helpful but i would point out that they gone a long way but not enough. And what has been missing is the being able to think outside of the box and to about more policies that many other economies have done but the responses have so far been just incremental and is constrained by policy orthodoxy is not really what thismoment demands. Give me an example of some nonorthodox thing that you think the International Financial institutions to be financing for low Income Countries. Low Income Countries for starters can begin by looking into the sdr and i think many have suggested 500 billion of sdr. 1 trillion, yes area but in that case as was alluded to, it requires asupermajority. But the political will is just not there and i think the g 20 has tried but they just could not get that Political Support for. Ayhan, one of the things thats been noteworthy over the past several years is in part thanks to china but not exclusively, a steady decline in the number of people who fall below the world bank condition of poverty. , theres been an increase in inequality within countries like within the United States. Theres actually been a decrease in Global Inequality in part because so many people at the bottom have been lifted out of poverty and it looks like this progress is being disrupted by the covid pandemic and the global recession that you describe so radically and im curious whether you think first, how big a deal is this but secondly is this something that we can recover from in a couple of years that this will look like a is this a longlasting setback to that progress . In communications of the pandemic, it requires significance. Its both back to this issue of counterfeit area and i talk about this global recession and that global recession theyre expecting five percent contraction. We come out your thinking it would be four percent, or warsaw says it could be eight percent. Depending on these outcomes the number of poor is increased anywhere between 70 to 100 million this year. Just look at the first time after a number of years we see an increase in the number of poor globally. And of course, with the deep recession, the Health Crisis and around the world there are these gains in the Global Economy has been able to adjust in the context of global objectives and i think that we are going to lose a significant share of those states so there is shortterm damage. Beyond the shortterm damage when you look at the longterm consequences of one important issue is how this pandemic will affect potential growth. The ability of these economies to generate growth and they are really concerned. Eswar mentioned the confidence issue. We have seen the type of uncertainty, policy uncertainty that youve never seen before at the global level that can address the impact on investment and that impact will be there for the foreseeable future. And then you have these millions of unemployed. Unemployment comes always with erosion to capital. In many countries around the world , School Age Children having all types of challenges require that education they used the require under normal circumstances. If erosion of Human Capital to associate trade schooling in one and then of course when you have the serious slowdown for our contraction in investment it hits limitations for productivity. Why all of these collectively important, you need to have growth to reduce poverty and you need to have growth to have income distribution. To distribute any quality outcomes so the pandemic creates all types of challenges and i think in terms of the outcomes, the types of challenges we have prior to the pandemic will be dramatically magnified because of this. You mentioned briefly used the phrase deglobalization and i wonder if will look back and say 2007 was the shortterm of globalization, trade and direct Foreign Investment andwhether we are going to be on a steady downturn. Trade as a fraction of gdp and stuff like that and theres the possibility that this might have shortterm benefits because of increased investment. But the rest is of course that will lead to the lower productivity growth and efficiency at the World Bank Report speculates. So im curious how you think about this nothing that we wont call you back in 10 years and remind youwhat you said today. Deglobalization is a serious longterm threat is within some of the control of the political actors. So the us elections, the way us china tensions play out, all these factors are big influences but what we saw was that trade intensity as basically solved after the Global Financial crisis. And then you really seem sort of the forward wave of what i would call different shocks. You have the recession after the Global Financial crisis was the first shock and the second was 2015 2016 and you have the slowdown in emerging markets , oil prices and in 2013 you have the us china trade tensions and now you have basically the pandemic all intensifying disruption and it is something that happens very gradually and i would say that if you take a look at the us china tensions , one thing that one has to note is that you look at the American Chamber of commerce and European Chamber of commerce surveys and you look at the business responses. 83 percent of us Companies Say theyre not considering relocating their manufacturing now to china and only 11 percent in europe say theyre considering this. And you still see that there are a lot of things you cant look at that easilywhen you look at china. Over small all these Companies Want more access to chinas market. Secondly china is really the only country that if you look at the 666 manufacturing components, they can manufacture all of them and they have Skilled Labor force 1. 4 million stem graduates. Annually, they have the infrastructure and they also have Government Support in some of these sectors so i dont think the supply chains are going to move that easily. I think youre seeing more Companies China plus one. And you also continue to see to the us and china, what was a trade war has really always in my opinion been more of a tax form of these issues will continue to linger on irrespective of which administration it is written theres real public and democratic concern on some of the technology issues. So i would say that we do see this as a longerterm breath and one that has started well before the pandemic as far as having different ways of shocks that its working through but i dont want to over exaggerate that can change the model that easily and i still do think theres a lot of obsession that will take place after this crisis on just what is the right kind of way to look at getting back to a more multilateral structure or will it stay something that is in more of a populist run. One thing to do know is that many of the populist leaders have lots of support during this pandemic. They have not gained support. So there are reasons to have some optimism as you look ahead. Have about eight minutes left and i thought i might ask a question that each of you can answer. Briefly. And basically it is beyond the obvious, the number of cases of covid which will be the mostimportant factor , what is one thing or two things that you think will most determine whether we have a more robust recovery in the beginning of 2021. What is the thing that really matter. With you, what you think would be the most important. I just testified before the House Committee of Small Businesses a few days ago. I started getting much more attuned to the state of Small Business and i think what happens to small and Medium Enterprises at as i alluded to in my earlier remarks is going to be crucial forevery economy. These firms that have suffered the most because they had traditionally the smallest cash and other types of buffers, if you look at an economy like the us, the next job creation by these firms is not that large but right now given a chicken on the brunt of the job losses, under that sector comes relatively quickly and is going to be difficult to sustain the decent employment growth in the robust way of the us if you look at china unless most other emerging market economies, small and Medium Enterprises have crucial to bothemployment and productivity growth. And having Financial Systems is a good thing but there is going to have to be a way partly with policy support to make sure that these firms are taking care of because if not economic revival is going to be difficult to come by, especially in terms of consumption. We seen the uncertainty that ayhan alluded to largely because of the measure of in most countries raising the precautionary savings but there are still many people hurting those people that are hurting are usually tied to those enterprises so that i think is the key to economic revival. I think i would agree with what booktv. Org said but what i point out is this crisis, is a formal Health Crisis and secondarily an economic crisis which means the certainty around the rebound begins with talking clarity on the timing of a vaccine. If we do not have that and then this is a more prolonged thing, i think the situation would be untenable no matter how much we pump into the economies. Johnny. Let me agree both with all the points that have been made but i would say keeping that were looking at for the us in particular is labor income. So you easy part of the recovery, turn everything off and you turn it back on the real question is are yougoing to be able to increase jobs. The unemployment numbers were not as bad as some people bought we went into this with a 50 year low on unemployment and if you look at the passages, private labor income we estimate has contracted by a third at least we have the stimulus packages knocking off 20 Percentage Points so those stimulus is will rolloff so will those jobs return and its very much in line with what eswar said, will these businesses be able to be sustained and to rehire and what happens in all this limitless rolloff . I would agree that we have to go back to the signs of this, what is the duration of this recession because we are assuming right now 30 but also shortlived so will there be a vaccination that is actually for widespread usage amongst the population and the poor thing i would just mention his commodity prices. Commodity prices are incredibly important for emerging Market Countries and particularly for latin america. And i think that given that one of the hardest regions, that the very important. It is also very tied to the china cycle as well. We heard about africa as well, thats also keith outlook you have thecommodity prices are a big driver for emerging markets. Ayhan, what would be the top of your list would increase the chances for less employment recovery. Is be strong and sustainable, it is basically coming along with the sharp increase in confidence. I agree with what the other panelists said. We need to see confidence coming back and we really need to see that Financial Market constituents think that you will not have a Financial Stress events down the road you these two go handinhand and all is going to depend on how policymakers are going to carry on reedit just goes back to the question youasked the beginning. Truly around Financial Markets. How they are going to basically go forward with largescale policy support measures area and i think back that question can generate all types of confidence issues and can trigger Financial Stress episodes as well. We need to Pay Attention to basically confidence is the single most important entity. I think were out of time and i wanted to thank ayhan for a very comprehensive report and i recommend that people only look to one slide they go to good taste but theres a lot more in the detailed report is of course on the world banks website. And i want to thank joyce for bringing us the perspective of j. P. Morgan is really extraordinarily useful research and update starting this crisis when were flooded with some, i always read the j. P. Morgan stuff and eswar excels in all my colleagues and answering almost any question thoughtfully and incomplete paragraphs for which im always envious. And cold, congratulates you on your new post an important leadership he willprovide to our Global Economic development. We hope you wont policies towards africa which as you point out is the place with a growing population and had so much potential that now seems threatened. Joining us from las vegas is someone the editor of nevada independent. As you look at their Race Campaign 2020 about three and a half months before the election give us in your words the political lay of a land between joe biden and president donald trump. Eide has an advantage here. The democrats have a formidable machine. The last three cycles they won the president ial race and Hillary Clinton be donald trump by 2. 5 points although was closer than i would pick as the