{"id":15644,"date":"2022-07-22T13:48:30","date_gmt":"2022-07-22T12:48:30","guid":{"rendered":"https:\/\/www.worldpolicyconference.com\/?p=15644"},"modified":"2022-07-22T13:48:30","modified_gmt":"2022-07-22T12:48:30","slug":"bertrand-badre-dont-jump-to-conclusions-on-the-economy-as-inflation-rises","status":"publish","type":"post","link":"https:\/\/www.worldpolicyconference.com\/fr\/bertrand-badre-dont-jump-to-conclusions-on-the-economy-as-inflation-rises\/","title":{"rendered":"Bertrand Badr\u00e9 : \u00ab\u00a0Don\u2019t \u2018jump to conclusions\u2019 on the economy as inflation rises\u00a0\u00bb"},"content":{"rendered":"<div class=\"u-margin-bottom-3 u-margin-top-3 u-margin-x-0 u-margin-top-medium-4 u-margin-top-xlarge-5\">\n<div class=\"c-article-contributors\">By\u00a0<b>Pascale Davies<\/b><time class=\"c-article-date\" datetime=\"2022-07-20\" data-timestamp=\"1658327818\"><span class=\"c-article-date__bullet\">\u00a0\u00a0\u2022\u00a0\u00a0<\/span><span class=\"c-article-date__last-updated-label\">Updated:<\/span>\u00a020\/07\/2022\u00a0<\/time><\/div>\n<\/div>\n<div class=\"c-article-content c-article-content--next js-article-content \">\n<div class=\"c-article-content__first-element\"><\/div>\n<p>Following the wake of the war in Ukraine, a global panic has set in with the rising cost of living and prophets of doom predicting swelling inflation.<\/p>\n<p>While the alarm bell is ringing for many, a former World Bank chief says anxious rhetoric could make matters worse and that the global economic model must be reinvented to prevent rising inequality.<\/p>\n<p>The world order shifted after Russian president Vladimir Putin invaded Ukraine in late February, prompting the West to slap sanctions on Russia which in turn have caused Putin to weaponise Russian gas exports to Europe.<\/p>\n<p>\u201cThe issue is that the more you repeat things, the more central banks move in that direction, the more it&rsquo;s a self-fulfilling prophecy,\u201d Bertrand Badr\u00e9, who was also the chief financial officer of the World Bank, said in an interview with Euronews Next at the International Financial Forum in Paris.<\/p>\n<p data-min-tv-running=\"true\">\u201cWe have to kind of see what&rsquo;s going on, not ignore the signals. Be cautious but also not just jump to conclusions,\u201d he said.<\/p>\n<p>But those signals point to a downturn that was worse than predicted.<\/p>\n<p>Last week, the European Commission revised its inflation forecast for 2022 from 6.1 per cent to 7.6 per cent.<\/p>\n<p>Many economists are predicting a recession for the eurozone but for the moment, European officials are keeping tight-lipped on that possibility. However, Badr\u00e9 does not believe the current economic woes will be as bad as the 2008 financial crisis.<\/p>\n<p>\u201cI don&rsquo;t think there is a Lehman Brothers in the making,\u201d he said.<\/p>\n<p>\u201cSo, there are tensions; obviously, there&rsquo;s a war in Ukraine. But at the same time, the pricing of agricultural and energy products are coming a little bit down\u201d.<\/p>\n<p>Badr\u00e9, who authored the book Can Finance Save the World, said governments should be working together and not build walls during this period, which is not happening at the moment.<\/p>\n<p>\u201cI think none of these issues will be solved by a country alone,\u201d he said, adding that if countries isolate themselves it will be \u201cdamaging for everybody\u201d.<\/p>\n<p>\u201cNow is the time for some relocation of production, now is the time for being more cautious with your supply, but it&rsquo;s also time to work together\u201d.<\/p>\n<p>After his tenure at the World Bank, Badr\u00e9 founded and is the chief executive officer of BlueOrange Capital, an investment fund that aims to finance the United Nation\u2019s Sustainable Development Goals.<\/p>\n<p>The 54-year-old said as the world order changes and the current model of globalisation is questioned, people should also be thinking about what he calls \u201cplanetarisation,\u201d issues the planet is facing such as climate, biodiversity and refugees<\/p>\n<p>\u201cWe should not move away from the planet. We have to move away from a certain form of globalisation which was put together over the past 50 years. I think it is responsible for the limits we see today,\u201d he said.<\/p>\n<p>Asked if the financial worries could impact investment on green and sustainable investment, Badr\u00e9 said this is the ultimate \u201cacid test\u201d and that this is the moment \u201cto stay firm\u201d and not deviate from sustainable goals.<\/p>\n<h2><strong>How to solve inequality<\/strong><\/h2>\n<p>The global economy was already battered by the impact of lockdowns due to the coronavirus pandemic before the ripple effects of the war in Ukraine hit the world\u2019s financial systems.<\/p>\n<p>Commodity prices have as a result reached record highs, the UN\u2019s Food and Agriculture Organization (FAO) in April said food prices are 34 per cent higher than this time last year, and have never been this high since FAO started keeping record.<\/p>\n<p>Rising food prices, energy prices and tightening financial conditions have caused inequality to increase.<\/p>\n<p>Badr\u00e9 said stopgap measures, for instance, government cash handouts to those most affected or systems such as a universal basic income or taxing the rich, only really work on the surface.<\/p>\n<p>He believes the whole economic model needs reinventing to prevent inequality.<\/p>\n<p>\u201cQuick fixes are like the pediment sequences from Rome. &lsquo;Give them something so they don&rsquo;t bother us,&rsquo; though I think it&rsquo;s not respectful at all,\u201d Badr\u00e9 said.<\/p>\n<p>The real solution, he says, is to work on education, training and salaries, which he calls the \u201cbread and butter of the economy between the 1940s and 1980s\u201d which have been dismantled.<\/p>\n<p>\u201cThe quick fixes are worth being discussed but I think it&rsquo;s mostly symbolic or marginal,\u201d Badr\u00e9 said.<\/p>\n<p>\u201cThe real fix would be to really provide opportunities for everybody within the system, not repair from the outside\u201d.<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p>Read the original article on the site of <a href=\"https:\/\/www.euronews.com\/next\/2022\/07\/20\/dont-jump-to-conclusions-on-the-economy-as-inflation-rises-says-ex-world-bank-chief\">euronews<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By\u00a0Pascale Davies\u00a0\u00a0\u2022\u00a0\u00a0Updated:\u00a020\/07\/2022\u00a0 Following the wake of the war in Ukraine, a global panic has set in with the rising cost of living and prophets of doom predicting swelling inflation. While<\/p>\n","protected":false},"author":3,"featured_media":15182,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[153],"class_list":["post-15644","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-room","tag-153"],"_links":{"self":[{"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/posts\/15644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/comments?post=15644"}],"version-history":[{"count":0,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/posts\/15644\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/media\/15182"}],"wp:attachment":[{"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/media?parent=15644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/categories?post=15644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.worldpolicyconference.com\/fr\/wp-json\/wp\/v2\/tags?post=15644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}