Economist Dambisa Moyo: Masters in Business (Audio)

who spends a lot of her time traveling. She's been to over seventy countries. Author of three books. I find her perspective and insights into what's happening in the global economy, especially in the frontier markets and the emerging markets, really very interesting. Some of the things we talked about were very much different from what you usually hear from US

economists or US policymakers. She is quite well read, quite highly educated, UH Masters and Policy Administration from the Kennedy School and then a PhD in economics from Oxford UM. Very much a free market person, but very difficult to pigeonhole. Some of her comments about infrastructure around the world and infrastructure in the United States. Uh, make it a challenge to to put a label on her. I find her

to be quite fascinating, quite interesting. And you know, it's unusual when I'm having a conversation in with one of our guests that someone says something that genuinely surprised me. And she did that a number of times. So, without further ado, here is my conversation with economist dan Bisa Moyo. This is Master Is in Business with Barry Ridholts on Bloomberg Radio. My guest today is Damn Bisa Moyo. She is a global economist who has worked with firms such

as Goldman Sachs and the World Bank. Let me give you a quick background on her. A BS. A fascinating actually academic background. A BS in chemistry from American University. You also got an NBA from there, followed up with a master's in policy administration from the Harvard Kennedy School, and then a PhD in economics at Oxford University. That is really quite the eclectic academic background, isn't it. Well?

Thank you, Barry Um. Yes, I guess my attempts at staying in school maybe went a little bit tough, further than my parents had hoped. But yes, I feel very lucky. I've had a chance to learn a lot in different areas, and I've really enjoyed it. So um, you come out of Oxford and you end up as an economist at Goldman Sacks for nearly a decade. You then move on to become a consultant to the World Bank in Washington, d C. And currently you're serving on the boards of

directors for a number of companies. For people who may not know the name Denbisa Moyo, you're the author of three New York Times bestsellers, Dead Aid While Aid is Not Working? And how there is a better way for Africa, how the West was lost fifty years of economic folly, and lastly, Winner take All China's race for resources and what it means for the world. And I would be remiss if I didn't mention you were named to Time Magazines one of one hundred most influential people in the world.

Den Bisamoyo, Welcome to Bloomberg. Thank you Berry. So let's talk a little bit about that eclectic background. How did that lead you to the world of financial services? So I suppose it's really about curiosity. Ultimately, I've always been really interested in the marriage of science with real world outcomes, and so I spent my time, my initial part of my career focused on chemistry and science. That was my

undergraduate degree. And then I realized that a lot of the scientific applications, in particular mathematics, were being applied in in finance and more and more, and obviously, if you think about black shoals and options pricing, et cetera, the sort of gap between science and finances, I would say,

continued to narrow. So it was to me, actually in retrospect, a pretty easy jump from a chemistry degree and also an NBA, but also doing a PhD in economics moving into finance, and that was really it was not more. It wasn't really by design, I must confess, it was sort of by accident. So when you talk about the mathematics of science, when I look at at fields like chemistry and physics, there's a tremendous precision. We're actually recording this the day of the fly by by by Pluto.

You get incredible. The ability to land end on a comet is something that physics does. Do you find that economics doesn't quite have that same degree of precision. Humans are a little squishy and they don't seem to really

operate as they're supposed to. Well, I'm sure i'll be flogged for saying this by my fellow economists, but I mean, I think it's really not a science in the sort of purest form we'd like to be viewed as scientists, because we do think that there's always a closed form solution to some of the economic problems that we're all very well aware of, with its economic growth, UM, issues

around climate change, estimations, et cetera. UM. But the reality is actually um economics is just a compilation, particularly macroeconomics, a compilation of human decisions and human behaviors UM driven by incentives and there and individual utility functions, and therefore it's very hard to model, especially you know, with over

seven billion people on the planet. Richard Faylor, who was a guest previously the economist at the University of Chicago's Boom School, called the father of behavioral economics, said the entire field of economic misbehavior is really a function to of how people operate in the real world, as opposed to how they're supposed to operate according to the rules of of economics. So when you say it's not a science,

you're in good company. Yes, I know Rich I just had dinner with him not too long ago, and you know, obviously it's got a fantastic book out, and he's absolutely right that what we would like to see happen in theory, particularly people like myself who are more on the free marketeer side. Um. Actually, when reality doesn't really transpire, I mean, governments behave badly, individuals behave badly, et cetera, and so

ultimately it doesn't really pan out. So when you were at Goldman Sachs as an economist, what was your role? Were you client facing? Were you advising other people within the firm? So? Um? While of the Goldmen, I actually had a couple of roles. Um. One of them, My initial role when I first arrived was on the capital market side and covered a lot of emerging market clients,

both sovereign states but also a number of corporations. The bottom line was that I had actually spent a long time doing my PhD in economics, sort of three and a half years, and I really wanted to get practical experience and how the markets worked. I was very interested in emerging markets and so landed at Goldman and the debt capital markets business. I subsequently went back into Reach research um and was reading around the time of the bricks work that Goldman put together. So did you work

with a gym Jim O'Neill. He's the one. Oh really, he's the one who coined the phrase bricks. So so let's now move forward. You were at the World Bank.

What was the environment like there? So, actually, just to get the chronology a little bit correct, I've gone to the World Bank before I did my doctorate, and so I had I mean, I'm from an emerging market and so I've always been fascinated not just by the big economic global market, economic and macroeconomic questions, but I was also very fascinating how finance can actually solve some of the problems that we in the emerging markets. So a big, big part of my experience at the World Bank was

around those issues. You're listening to Masters and Business on Bloomberg Radio. My special guest today is macro economist and global observer Dambisa Moyo, who not too long ago published a New York Times best selling book all about China and its consumption of resources. So let's start over there. We've seen China's growth slow, but it slowed from double digits to six or seven percent. What's the outlook for

China over the next couple of years. The I m F just published their World Economic outlook about a week ago, and what they're forecasting is that it will roughly Uh, China's growth will basically, however, around seven percent, and think six point eight is what their estimate was. UM. Just to put this into context, UM, you need to be growing at at least seven percent in order to double per capita incomes in one generation, So you know, I

would say that at UM. You know, unsurprisingly, uh, there are concerns about the outlook not just for China but global growth. And it's it's unsurprising in the sense that China is obviously a very large part of the global economy, and to the extent that the developed world continues to suffer from issues around debt and deficits and issues around

aging populations and slowing productivity. It's no surprise that China, which very heavily dependent has been dependent on the trade arm to feel its economic growth has suffered as well. So let's delve a little bit into your book Winner take all China's race for resources and what it means for the world. China is a massive consumer of natural resources, aren't there. Yes, they absolutely are, and it's been very

well documented. I was fortunate enough about a year ago to spend an hour with the President of China, President Chijing Ping, with a group of ten of US, and the one of the things I thought was incredibly stark was that he expressed the view that the biggest channel in that China has UM is the risk of scarcity of natural resources UM. China is, with a population of about a billion three has only seven percent arable land UM, and it has a significant depletion as we know, around water,

which is very important. UM. They're continuing to try and address the issues around pollution and environmental concerns because they do have to feed themselves UM. But obviously UM a big part of their agenda to continue to drive economic growth has been focused on outreach and going into places like South America and Africa. UM. They are the largest foreign direct investment places like Australia, where natural resources from iron, ore, copper, et cetera continue to be a big part of the

of the China story. And as we see China's economy accelerate and decelerate, we see the impact in global prices. If you look at iron ore and copper over the past few months, it parallels almost to the scent the trajectory of China's GDP and that absolutely and you know, Barry, the the natural resource particularly mineral sectors had a very

bad UM few years UM. Last year two fourteen, I was just looking at some data the impairments for the whole industry, so mining industry, gold, copper, and iron ore put together was a hundred billion dollars of right offs impairments and that's really quite significant UM for for that kind of of an industry. How much of that do you trace directly to China's economic Well, it's hard to say someone growing in seven percent is slowing, but relative

to you know, mid double digit growth, it is slower. No. I mean, well, I think you're right. I mean there's a directional point and then there's a relative point. I think in directional point, I think we're going to see China probably hover around seven percent. I'm pretty optimistic that some of the interventions that the government is putting in place will yield sort of in a flywheel effect, some of the benefits of of sustained economic growth. Um, but

you're right, on a relative basiss is much slower. But I think to look at it in isolation and start handwaving that the sky is falling down, I think it just really doesn't do that shows a lack of understanding of how the global economic dynamic is likely to play out. So there have been a number of China bears amongst the hedge fund community. Uh and here in the United States. It sounds like your outlook is somewhat optimistic for China's ongoing growth. Yeah, I mean, I suppose optimistic is once

again a more relative word. I mean, I'm more constructive, what can I say? And I think that you know, obviously, with the massive sell off we've seen in the last few days, and you know, the government intervention into the market, I know that the bears are sort of cheering and thinking they got it right. I mean, remember that the stock markets are still on the year on your your on your basis, are still above a trend. So I think that on a twelve month basically, and even though

you're so year to date they're still positive. Just to put a little mean on this, can China's government control their stock market? Well? I think there are a couple of things worth stating before I address that tricition directly. First of all, the Chinese mark it is very retail focused about much more so than the rest of the much more so than that. As you know, I think that sort of rule of thumb is like of the U S market is owned by sort of the top

institution institutions. Um. But I think the more fundamental important point here is that the intervention by the Chinese authorities has been seen not just in China, but the US is intervened in their markets. The Japanese have intervened in their markets. I mean, you could argue that monetary policy as we're seeing it now is an intervention by the national governments in order, but it's indirect. What we're seeing in China is a direct intervention in the markets. Look,

fiscal policy eventually finds its way to the markets. Monetary policy finds its way to the markets, even tax policy. You know, if you go back and look at what Reagan did and what George W. Bush did, uh, the Warren Buffet line was, Hey, give me a trillion dollars

and I'll throw you a heck of a party. That said, it seems China is a different entirely than what we see from Japan, or Europe or the United States in their willingness to actually wade into the shares exchange and either buy shares or prevent you know, it's unprecedented to say of the shareholders, you're not allowed to sell for six months. That's really direct. And by the way, that started at once to fifty as they added more and more rules. If you're a five percent holder, if you're

this stock, there's that's got to be unprecedented. Well, you know, Barry, I think people tend to split hairs. I mean we see um, you know, suspension of individual stocks or market suspensions. We've seen that in Western economies. No short selling. They prevented that absolutely, And so you know the responsibility of public policies to ensure that you don't have a complete

collapse in the financial markets or in the economy. As I just said, the structure, the underlying structure of the financial markets in China means that there has to be at bays a nature me I would argue, given that this sort of mom and pop. Uh, you know, holding the stock that the government would be more aggressive in

addressing this and trying to protect them. They don't have the culture of pension funds and insurers as as we have in the United States, and so I think it's a bit naive to sort of think that they wouldn't be as aggressive as they have. And we know about interventions with foreign exchange, UM in many countries you picked

out Japan. I mean, we know about interventions in Monterrey policy more generally, UM, I think it's it's really incumbent on public policy to step in when the markets are not clearing or there's a fundamental problem in the market system. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Danbisa Moyo. She is a global

economist who specializes in emerging market and frontier markets. Um. You're also the author of a book called Dead Aid that was pretty critical of Western aid to Africa, and you had noted a trillion dollars of aid has been sent from risk rich Western countries to Africa and it's essentially been wasted. Explain that the fundamental premise is we have to reflect on what is the purpose of aid, And the purpose of aid was twofold as far as I could see. Number one was to create economic growth

in a sustained way. And as I mentioned to the seven percent is really the rule of thumb, the number that we need to achieve in order to double per capita income growth, double income generation exactly, so really important that we get to the seven percent number. Um. The second thing is that we wanted to meaningfully put a dent in poverty, and on these two metrics alone, the fact of the matter is that that has not been

the case, and of course not even close. We've seen many African countries regress, and I you know, I pick on Africa because that's my origin. But the reality is, if you look across aid recipient countries around the world, it's been the same catastrophe Latin America, South America, South East Asia and the look. The reality is we have seen some cases where aid has been effective, but it

tends to be in short sharp interventions. The Martial Plan, for example, a hundred billion dollars in roughly in today's estimates, which is five years US putting money into Europe. But it was noticed it wasn't an emerging market. It was rebuilding developed that which is a different it's a completely different tax. But there are also examples from the emerging markets,

places like South Korea, Butswana, they received aids. In fact, they called the aid graduates because these countries were able to utilize this received aid and to to basically to catapult or two basically a catalyst for economic growth for those economies. I am guilty of forgetting that South Korea was once an aid recipient because they're one of the most successful economic nations in the world. Absolutely so, so what went right in South Korea that didn't go right

in Latin America or Africa. So I think that there are many, of course, many aspects to what has happened. I mean, they became very a cultural focus, so the aspect of being able to be self reliant. UM, they've obviously invested a tremendous amount of innovation and R and D, and so they are, as you pointed out, one of the very big competitive competing countries around the world in

those areas. UM, I would argue that what we've seen in places like Africa and South America in particular, is that there's been a large recipient of these countries have been recipients of of money, um. But there was no expectation that it was ever going to come to an end. So we've seen the catalog of of corruption and misuse. UM. We've seen inflation, we've seen concerns around debt, you know, debt, I mean, and we're talking about Africa here, not Greece,

but I'm sure we'll come to Greece in a minute. UM. But I think that there's a bigger issue here, which is the fundamental problem with the aid system is that it does sever the responsibility of the relationship between the taxpayer in the individual country, um, and the their government. So the government's very rationally spend their time courting the donors, and the donors, i'm afraid to say, have tended not to really care about what was going on on the

ground in the sense as a follow up. So even if countries didn't deliver growth, they still gave them more aid, as opposed to sort of punishing them or or you know, really trying to change the Okay. So so I'm benevolent dictator and I'm appointing them be some way in charge of all global aid to emerging economies. What do you do to make this work better? What's what's the what's your prescription? So that's a fantastic question, Barry, because we know the good news is that we're not living on

a planet zoo where there's no information. The reality is we know what creates economic growth in a long term in a long term context. We know that trade is better than no trade. We know that investment in infrastructure is a critical piece of this. We know that financial liberalization and investment in financial sector is huge. Define that as it applies to a frontier African country. What is that?

How does that actually manifest? Well, we need capital markets, you need them to be liquid, right, and you need them to be able to be transparent as well, in the sense that like anywhere else, you need people to be able to make bid an ask offers that people are bid at, ask spreads that people can see and make judgments on whether or not they want to sell

their goods and services at those prices. And I think that one of the big problems with the eight systems that does create a lot of lack of transparency, much more opacity around market prices, and that's a massive distortionary aspect in the economy. I have a friend who's a banker in South Africa is his name is Prior Duplessis, and he five years ago said I would like to create an e t F for Africa, and I think

since then that's finally come about. But five years ago, if you wanted to just make a purchase of of African equities, it was almost impossible. Yeah. Absolutely, and I must tell you, you you know, things have changed considerably, and I think the financial crisis, if it was, if there's anything good, was that it did force African countries are the emerging markets, to figure out that they have to stand on their own. And so we've seen now about

twenty countries in Africa have stock markets. We have in about twenty countries in Africa also that have credit ratings and they're issuing international debt. They have to take responsibility for the running and management the economies. And by the way, that is good democratic democratic policy anyway, because the governments are then held accountable by their people. You're listening to Masters in Business on Bloomberg Radio. My guest today is

Danbisa Moyo. She is a globe trotting economist who has visited more than fifty countries, and she likes to specialize in the brick and frontier economies in Asia, South America, Africa, in the Middle East. So let's talk a little bit about your eclectic background and how you're really a citizen of three different continents. You're you're born in Zambia, you Compton the United States when you're fairly young, Right's right, yes, and then you go back to Zambia to study chemistry

um in college. Yeah, so my formative years were definitely in Africa's at least, let's let's way the way I view it. Um. You know, my more recent time has obviously been in the United States, where I did my messes at Harvard and then going to Oxford to my PhD and subsequently working abroad. Couldn't get into I know, just shocking, what can I say? And you're now you're kind of not even by coastal, you're by continent. You're in London a couple of months a year, right, Yeah,

I'm told it's called Nylon. So I spend time New York London exactly. And someone did say to me, you can also have Nylon Kong, which is New York London Hong Kong. So but anyway, for now, it's Nylon. Um. I have been actually over seventy countries around, yes, and I have say, loved every minute of it. Um. And I, you know, encourage listeners to put their boots on and grab their passports and get out there. One of my great laments about my fellow Americans is that only thirty

four percent of them actually have a passport. And I often get into arguments with people about the state of the US infrastructure. It's like, oh, you haven't been to Asia or Europe? Have you? When you go to Brussels and their roads are fantastic when they are about to be repaired. Like what they think needs work is what we I are two. Um, not even talking about the Autobahn in Germany. And then let's not even talk about

trains and other infrastructure in Europe and Asia. We the United States, once led the world, were so far behind. You mentioned the importance of infrastructure, So let me ask you that question. How significant is infrastructure even in a developed nation like the United States. So we're sitting in the United States and there's been a catastrophic under investment in this country and infrastructure and at least three reasons

why it should be a no brainer. UM. One, Obviously, developed economy and developing countries need the foundation of solid infrastructure. But number two maduration perspective for long dated pension funds and insurance companies. That absolutely And the third thing, which I think is completely obvious, is that it's what a great way to create employment in the United States. So, by the way, now it's fascinating, I see a lot

of road construction that I haven't been seeing previously. But we're reading more and more that it's the state and not the federal him and that's doing it. So Utah and um, Washington State and now New York some of them have passed increase in the gasoline tax, which by the way, is frozen where it was. There's no cola, there's no cost of living adjustment. There's been no increase as the number of people in the country of more

than double since then. So what a big surprise. And I guess people don't get elected for for doing maintenance work. That crazy idea, um, But you know the truth of the matter, I think most people would be willing to pay a little bit more to get decent infrastructure. I mean, the road situations is atrocious. And actually the airports as well. I mean, I've been to better airports, you know than JFK and at Lagos in Nigeria. You heard what what

Vice President Biden said about LaGuardia. Third World airports are nice, and then LaGuardia. I think they just approved about a six I know they approved, I don't remember, was seven or nine billion or less, but it's a multibillion dollar renovation of LaGuardia, which hopefully will be done in our lifetimes. But it's really such a dump. And so overneath, at least there are a handful of terminals in Kennedy and JFK that that aren't half bad, that are are tolerable.

Although you know, the airport in Detroit is nice, the airport and Denver is nice, but it's they're noticeable because they're nice. The rest of them are. And you're in Asia pretty regularly regale people with what infrastructure in Asia is like. Well, you know, this is one of the one of the hallmarks of the Chinese and also Asian success story is that they very quickly understood they needs to invest considerable amount of infrastructure. It's the way that

you get goods and services to market. It's the way that your economy functions, the way to tell the communications work, and that that's what they've spent a large chunk of their money on. And you know, to the critique of some, I mean, the people would argue that it's probably gone too far. In the property bubble in China that people have been talking about is probably an artifact of that.

But the reality is um. You know the US has about GDP is consumption um in China, it's it's you know, much just if that I mean, some estimates are on And this is I think really a testament to the way people think about infrastructure and fixed income investments in the place like China versus that I'm gonna I'm gonna sick you on Grover Northquestern you'll be able to change

his perspective. Far too much focus on deficit financing. Right by the way oil and gasoline prices are down so much, What would be so terrible if if gasoline prices had a twenty cent tax. Yes, it's a tax so that the roads and bridges and tunnels don't collapse. This is how civilized societies behave UM Before I forget so you're you're in London? How often about once a month? Oh, so you're there pretty right? Yes, I know you have you have an apartment, you're in an office right in

the middle of London. I wish that were true because it's so expensive. I do an apartment or I did have it. I did have an apartment, but as you probably have seen the cost of apartments, it's just insane how expensive it is to get on the on the property letters. So more than San Francisco people have been set, which is which is more than New York. As you know, England is an island, and so it's you can't exactly keep expanding and they don't really do skyscrapers the way

they do. That's the thing is is you look at you look at Hong Kong or Shanghai or New York. Well, there's no more land, but there's lots of air. And now this new round of towers that have gone up in New York are are they're astonishing residences as tall as the Empire State Building. That's a whole new thing. You really don't see that now, you definitely don't see that.

I wonder if they're ever going to find uh, they're totally out of space and need to start building up, or they're just going to be a flat city like Paris, like some of the other great cities of Europe. They don't build up, they build out, and then they run out of space and they're done well. You know. I think the which we were essentially talking about here is urbanization, which is a huge pillar of public policy agendas, particularly

emerging markets. As you probably are aware, in China today they are about a hundred cities that have at least one million people um and there have been very they they the public political class, and China has been very explicit that they're looking to increase that to two hundred and twenty one cities with one million people each in

about twenty years by comparisons. Wait before you move off of that, is that because they're moving people away from the agrarian hinder land and in the farms and into uh more educated, more professionals. Partly partly to do with it, but obviously, as we've seen even in the United States, where in the d yet sixty of the population living on land um you know, now have less sort of two to three percent of Americans are involved in the

agricultural space. I mean that essentially the transition that we're seeing in places like China. UM. And so it's very deliberate because governments can then deliver public goods like infrastructure, but health care and education in a much more efficient way if people are closer together. So you've been to over seventies different countries around the world. What do you think Americans should know about the rest of the world that we simply are ignorant about. Well, I think it's

more about a mindset. Um. You know, someone said to me recently, actually, a very senior chairman and CEO of an American companies said the interesting thing for him was that the rest of the world was more similar to each other than the United States. And so by that meaning the America is the anomaly. Everyone else is much more similar, even even the European allies. UM. And I think that the important thing from that is to really

understand why countries have developed in a very different way. Um. There are many countries that have very long histories and civilization, and it's very important to understand that countries do evan flow. China and India were the largest economies of the world in the eighteen hundreds thousands of years far. Absolutely well,

you know, Angus medicines data is from the eighteen hundreds. Um. But they made mistakes, which countries do, and they paid for it the whole referring to under investments in education and infrastructure, all the stuff that we're talking about now. They became much more clothes society and you know, there they are. They lost multiple generations of their country internal progress. Absolutely. But you know, the United States and I think this

is a fantastic country. I love being in the United States, but we know that. You know, the O E c D Report, piece of reports on education is showing that the United States right now is not in a good place where education is concerned anything. It's getting worse. The statistics around mathematics, performance and science is showing that the

United States is sort of number twenty five in the world. Um. In fact that the o E c D also put out a report saying that this generation of Americans is less educated than the previous generation for the first time in the history of the country. And you know, we've talked about infrastructure already. I mean, to me, these are the sort of the this is the impetus for declining society if the government doesn't do and not just the government, but if citizens don't really get up and say this

is not what the direction we want ahead. So there's there's enough sort of warnings about the sort of economic challenges that the US is going to face, And the question is is there anybody who's responsible enough to really take charge of them to move is positively? Well, well, is there? Well, we'll see when the election rolls around next year, whoever you decide to elect, we'll decide that. All right, Well, we'll find out. We've been speaking with them.

Bisa Moyo, global economists and consultant to various banks and other institutions. By the way, if people want to find your written work and research, where can they access that my website don't be Samyo dot com. If you enjoy this conversation, be sure and check out our podcast extras, where we let the tape rolling and continue discussing weighty issues with our guest. Be sure and check out my daily column on Bloomberg View dot com. Follow me on

Twitter at rit Holts. I'm Barry H. Halts. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast Portion of our show. You noticed the way I have to do that. That's my welcome gesture. I'm sitting with Dan Bisa Moyo, who I was fortunate enough to first meet at a UM, trying to remember where we first met, and then we subsequently went to a lunch with a friend, Josh Frankel of of Merrill lynch Um and there are so many questions that had come up

during that lunch. I want to run through some of them because they're they're quite quite fascinating. But before we start getting into your early history, UM, there were some questions that I missed during our broadcast portion. So the most important I want I want to get to is you're a board member for a number of global companies

and that's really it's a fascinating set. So Barclay's Bank not only on the board of directors, but you're a member of the risk committee that they're a giant financial UM headquar they headquarter in London. They based in London, but they obviously purchased they brought Lehman Brothers assets. They've been in Africa for a hundred years and after the Lehman brother assets purchased after the financial crisis. Obviously they've

got a big for a song. It was such a great purchase post you know, they were negotiating pre bankruptcy and nobody could look at their books and make an intelligent assessment and you have forty five minutes, here's a hundred billion dollars um. So they it was a fantastic purchase out of bankruptcy. I love those sort of like let's be a little patient and see if we can get a distress sale. And that's exactly what they ended

up doing. S A. B. Miller the giant beer company, beer company, brewing company US based, but they're global now every and I said, I actually misspoke, I said beer company. But actually they also produced water and soft drinks, so they themselves have you know, expanded their portfolio and really capitalizing on mention of the emerging market growth of consumer.

What we see with Coca Cola and Pepsian and similar be companies is the soda sells no pun intended or flat um, but it's the water and juices that are really the growth drivers these days. It's not T two to some degree also, but it's no longer soda. It's healthy, natural and water is an issue wherever you go, isn't it absolutely um? And then the third company Barrack Gold,

where you're also a member of the Order committee. So these are so eclectic, and you know, if I were to randomly pick three companies, I wouldn't say Barclay's, a gold company and a brewing company. How did you end up finding these companies? How did this come about? Well, I'm really very lucky that I've had the opportunity to serve on these boards. And the reality is that I was very interested in being constantly being able to capture

a view on what's happening in the world economy. And so through the financial services, Barkley's consumer goods, fast moving consumer goods, through the beer sab Miller, and then natural resources through Barrack, I've been able to me to get a good idea of what's happening in these many different aspects of the global economy. And so that's been quite deliberate but also very fortunate on my part. And I always call them Barrack Gold, but really they're Barrack Gold,

Copper and other wars. Gold is just a part of what they did. That's absolutely right. I mean, we've had a copper business for a number of years, not quite significant number of years, a century or two something like that. That long. We've only been around about thirty years, that's all. Yeah. But even though it's it is the largest gold produce in the world, it is. Yes, that's fascinating, and you're only wearing one piece of gold, usually dripping in gold.

So so let's talk a little bit about your background. I just wanted to make sure I touched base with that before. Um there's a tendency to just get lost in digressions, and I wanted to make sure we covered that. So so who are your early mentors who basically said this chemistry stuff is interesting, but you should look good at finance and economics. So in my case, absolutely my parents.

And I know that sounds a bit canned, but I really think to look at my parents as being the real pioneers from um, coming from Africa, which is where I come from. I come from a landlocked, small country and you know at that time about ten million people and uh, you know, they left Africa to come to the United States. My father's his PhD. Here where PhD Wisconsin? And what was his PhD? It was in linguistics. Yes, oh, that's fast. So how do you go from Zambia to Wisconsin.

That's not round? No exactly. I think they learned the hard way, how brutally they called it, can get out there. Um but he also they also studied briefly at U C l A. But you know that transition, it's not we we take things so much for granted. Now to tell a communication, just up the phone and call home.

But but at that time they had never no one from their families had ever left Africa, so they didn't know how to get an airplane and to connect in London to get to Los Angeles and then obviously to medicine later on. But um so I considered them to be the pioneers, and they're really a testament to open

mindedness not getting bogged down by negativity. I mean, they were coming out of the colonial era, but they were still very optimistic young Africans, very keen on economics and education, educational success, and so they had to be thrilled watching you work your way from one university too. There's still some schools you haven't gone to. Yeah, I know, I'm still working on it, but but your parents have have

to when you graduated with your from Oxford. They had to be thrilled to say, oh look what a little well you know. Thankfully they were there at Oxford when I was awarded the doctorate, so they were very thrilled and that was a great experience. That's fantastic. Um So what about economists who have influenced you? Who are who were the great thinkers and economics who affected your approach to macro? So I've tended to air on the side of being a free marketeer. Um So, perhaps more of

the Chicago school than anything else. Yes, and some of the stuff you've said has not been so people think of you is a little more right leaning. But you're right leaning in the UK. Here you're what would have been considered a moderate Republican thirty years ago. Unfortunately, you have to go to the musingum in natural history and next to the Brontosaurus you can see the moderate Republicans who pretty much aren't certainly not elected anymore. No, I

I do know I have these strange monikers. I mean, I suppose I come from a place where I don't want to feel hamstrung by Are you a Democrat or your Republican? Are you Kansian? Are you I just think that those type of ascribing, those type of of labels takes away from what the real issues are. UM. And you know, I was a couple of years ago was awarded the hyak um Uh Frederick Kayak Lifetime Achievement Award UM at a young age. Say that, but you were there.

Tell me if I'm staying this wrong. You were the youngest recipient of the high Ak Lifetime Achievement Awards. That's what I was told that. Who knows so, But anyway, the point was that, you know, in researching about high X work, he and Kaine's were actually very close and respected each other's work. And I've actually written a number of articles about the need for unified approach to economics.

I mean that neither of us are correct. And you know, I mean things companies, companies and economies EBB and flow. What might be true in a moderately growing economy which doesn't have any shocks is completely different. UM in terms of potential government intervention when you have a financial crisis, for example, if you're going to be rational, how are we going to be able to argue? I know, it's

kind of crazy. So I think in my in my later life and just talking coming back to your question about mentors and from economics, I tend to like people are more pragmatic, and we clearly need governments to be involved in delivery of public goods, and there is clearly a point at which governments can do too much and therefore really undermine incentives and utility, the stuff that free marketeers love. And so we're constantly trying to find that balance.

But I think, you know, I'm very interested in in the sort of the a Navyan model because I think they probably on the whole have a more interesting approach to the left versus rights views about economics, and so that's how I tend to approach things that that's pretty fascinating. You know, the debate we need some government, should it be the line be here towards more or here towards less is a rational debate sometimes, especially some libertarians and

followers of Hiak. I've made the argument you really don't need government, the free market will take care of it. And my answer is always, well, that ain't working out in Somalia, why do you think it could work out in a developed country like the United States. No government is going to create a power vacuum and some entity, be it military or corporate, is going to fill that that empty space, So you have to have something there.

It seems rational. There are people who don't buy that argument. Well, I mean, it's it's interesting because I think what I would say is that there's much more scope for improvement of the electoral system in the United States and by and more generally of liberal democracy. I think that a lot of the challenges of the world faces right now, whether it's aging populations, infrastructure challenges, under education, those tend to be intergenerational, long term structural problems, and yet the

political system is very short term. You've got elections every two years. The motivations are kind of skewed and very rational, but skewed all the same and in fact disincentivizing politicians to focus on these long term issues. And so you know, the question is is their flexibility in the democratic system to actually innovate and improve upon the liberal democratic system so that it's better matches the economic challenges with the

political system. And I think that's where the discussion should be in the United States and in many of the developed world countries. You know, it's very easy to become frustrated and cynical when you look at, um, just a relentless parade of negative headlines in the United States. Not so much that bad things are happening, it's that simple

things can't get fixed because of political realysis. And then you enter a period of time like the last sixty days, look at everything that's going on today, it's almost enough to give a person hope. Maybe maybe it's easier when you're talking about foreign policy, because there's a look, we

see what's going on with I ran today, that's surprisingly hopeful. Um, when we ran our analysis of what this does to the price of oil, uh, and then what a reduced price of oil does to the global economy, I'm reluctant to say, it's almost enough to make one optimistic. But then when you look at basic stuff like rose, it's incredibly frustrating that even the most simple government functions seems

to be mired in paralysis. It's not that government can't work, it's that government presently as it's constituted isn't working absolutely. And I think we shouldn't be pollyannish about democracy and liberal democracy and its failures. And I think that's part of the problem. People hold it so sacrasanc to our our forefathers said this, and therefore we can't do anything about it, which is sort of the antithesis of Americana. I mean, America is about innovations, about improvement, it's about

creative destruction, et cetera. And so I think that democracy. And by the way, we should absolutely be optimistic, whether it's about the U. S. Economy and about the global economy or foreign policy, etcetera. Um, but we shouldn't be sort of obtuse about what needs to be done. And I think that there is a lot of scope for improvements, such as looking at term limits, looking at extending of terms, um. You know, and some of those experiments are already taking

place around the world. Mandatory voting, god, you know, dare I say it without getting shots in America? That would be of you know. The problem that you run into with mandatory voting is the people who are too uninformed, talking about low information voters, the people who are like, oh, is it an election in November? So I don't know the On the one hand, I like the theoretical concept of mandatory voting. Then you look at the people who never bothered a vote and it's really is that. But

that's a civic responsibility. I mean, we can we look at another whole conversation, but you know, we cannot sit here and complain about the government's under performance. If we can't be bothered to go and vote. You know you, if you can't be bothered to go out there and express your view, then you really therefore should not sit around complaining about lack of infrastructure, under investment, education or pensions or etcetera. All the other things that we spend

a lot of time moaning about. There has to be some way to speaking of Richard Thaylor, to nudge people into voting the way they've done it with Oregon donation and other such stuff. It could be set up to encourage more people to vote, certainly to make it easier to vote. Um, but we're a nation that maybe it's we're too wealthy and too relatively well off to be all that concerned. We have amongst the lowest voting turnout.

Voter turnout in industrialized democracy certainly much lower than Europe, although they're trending down also aren't Yes, they are, absolutely so. Is that a function of wealth or just people getting lazy? So there there's a whole history and you know, literature on this issue, and you know, obviously we won't have time to go into in grave detail, but I definitely think that, you know, there is an element of indifference

that can occur. You know, when people are quite satiated, they're sort of physical and human needs, sort of Masow's hierarchy of needs, that you're sort of satiated, and therefore, you know, on the margin, they may not like certain things, but it's not so fundamental that they feel like they need to go out there and express a very strong view. So now now we don't have to you just resolve that issue to spend a lot of time in that. So let's talk a little bit about global events, because

we really haven't. Um, what do you think about what's happening in Greece with the European solution to them staying on the euro Do you think this was the right decision? Do you think Greece uh overplayed their hands, should have

left the euro? What? What? What's your impression on that? So? Um, my view on Greece is that what we've seen in recent sort of months and probably even the last few years has never been a transition it's been an equilibrium, and I think it's very important people understand the difference.

I think there's been a misunderstanding in the markets that somehow Greek's debt and the restructuring needs and around pension funds and UH civil service, et cetera, where things that we're going to get resolved and then we move into this amazing equilibrium where the euros functioning. And I don't agree with that at all. I think that what we have is has all the hallmarks of the aid system.

We have a large functioning UH in it's called institution Group of countries, which is the European Union, that has a lot of money. Put the call on the donor, and you have a relatively poor UM, non performing, dysfunctional many ways, it's dysfunctional UM economy that actually, I would say, and I use the term lightly is being rewarded for

bad behavior. And so you've ended up in this locked equilibrium where the donor needs the recipient to stay in because obviously there are too many risks and a number of very significant risks for Greece. Leaving you could you know, to be a portal for terrorists, it could be undermine the union, itself because other countries will say, well what about us, We will also want to be a bit more lax, etcetera, etcetera. UM. But there's also benefits for

the recipient to keep in the in the game. And this is like a game theoretic corner or solution that I've seen play out in the emerging markets. With the aid system, you have donors that continue to give money even though these countries are not doing what they said they were going to do. Um, but you know they will will get to such an extent that the donors are even willing to pay the countries to repay the debt.

So the book on the books, it looks like the country is paying back the money, but actually we don't see the improvements in the metrics such as growth or improvement, increases in retirement age, all the stuff that you know, Greece in particular is looking at. But you know, more structural issues that need to be addressed. When we look at the strug tlitioners in Greece, the concept of everybody having to pay their taxes just seems to be completely foreign,

and it's not a surprise. There's an underground economy. My favorite data point I'm trying to remember who ran the story. It was either the Times or the Wall Street Journal about the swimming pools and Athens. So you pay a tax on a swimming pool. It's not a whole lot of money, but it's a trump of change, and something like a hundred people paid the swimming pool tax and Athens. But you use a Google satellite image and there's sixteen

thousand swimming pools. So the lack of the taxpayer avoidance data, people aren't paying their taxes. How can anybody run a government on infrastructure and economy when when the bulk of the public just aren't participating in their civic obligation. But that's what it's gonna say. It goes back to the civic obligation because that is I mean, you know, it's patently unfair, I would say, to be to for people to draw on the system, a societal system without feeling

that they should be contributing in some respect. And now, obviously over the lifetime of certain people, things happen so that the society and that's why society's have been flows that they have a welfare aspect, they have government stepping in when markets don't clear et cetera. But clearly what has happened in the grease construct is that this economy is not a developed economy in any way near what

it should have been. It's somewhere between emerging market and and a developing kind, and I think it needs a lot more latitude and flexibility to do what it needs to do to improve it's, you know, its own lot, and under you know, under the auspices of the Euro. I think it's just made it much more, much more difficult. I mean, in a nutshell, I don't think that they'll

be able to leave or be asked to leave. All right, So I only have you for ten more minutes, So let me plow through some of my favorite questions that I ask of all my guests. Let's talk a little bit about books and reading. You're obviously well educated, and you've read a lot of UM textbooks. What other books do you enjoy reading? Um? I'm trying to think of what I'm reading now that I really like, I tend

to like. I'm kind of into the marathon zone right now, so I'm actually reading a book by Stu Middleman, who is a marathon I believe he's in the mid to late sixties. I mean he's run so many marathons and ultra marathons, which a hundred milers and he's actually eroded his his knees. Um, he's got no cartilage and so but I'm fascinated by sports. I love tennis. I was just at Wimbledon finals over the weekend. Yeah, so that was fantastic. There are repeated opportunities for him to pull

that out. And you got to give Jokeovic credit. He's just a machine. He's a guy, has total package. There's we could digress into tennis. But anyway, the blonde so short as I'm really into books now more on athletics and how your running marathons? You started a year ago, Yes, I did. I was in my forties already. Um, and so you still have some cartilage left. I have a little bit of cartonage left at least hasn't been eroded by the passage of time. But well, those, by the way,

those ultra everybody forgets. I I'm fond of telling you know, you say an ultra marathon or has no cartlerge left in his knee. Everybody forgets. The guy who ran the first marathon was it Sparta to Athens or to to marathon. He dropped dead when he arrived. I think we took the wrong lesson from that. The lesson is twenty six miles is too far to run. It's twenty six point two bad. Don't forget the point too. Don't forget they

dropped dead at the end. That's the thing that I remember, and that's why I used to run long distance in in high school and college. But I competed three miles and that's it. Three miles is plenty. And since I stopped that, I've fortunately managed to retain my girls figure. But so, so, what other nonfiction books do you do? You like? What something related to finance and economics, to anything. I'm actually reading a book right now. Um, I'm gonna

get the title wrong. I think it's called The Fallen Cut something Catastrophe. It's on Greece. Funny enough. I don't know why it's popped out of my head. I remember before we head off. But basically it's case studies. It was written by New York New York Times journalists. Has

just come out. It's basically case studies, really underscoring the stuff we're talking about, the dysfunctionality of the society and how it's really I think for traders in particular, it's as lots of lessons learned about how we should be thinking about the the Greece is likelihood of of exit, but also the likelihood of some of the reforms that are being demanded upon them actually been coming to fruit.

And thank you so much for not saying Grex. But what's interesting to me about Greece is economically there's only so far tourism and agriculture scale. They really need a little bit more of a modern economy, and there's just real massive cultural resistance to that, isn't there. I think many countries need a little bit more of a modern,

modern take. And if you look at what's happening in technology space, it's very clear that you know, we we there will be gains of a there will also be significant losers if countries don't continue to innovate in a more aggressive way. So, so you said you started running marathon in your forties. Whatever motivated you at that age to say, I think I'll start running twenty six point two miles Like that's sort of an unusual thing late in life, isn't it? It is? Um, I think, But well,

the oldest marathon runner started running at eighty nine. He's now his hundreds. He's about a hundred and two hundred, stunning, still running marathons. And by the way, I just remember the name of the book. The book called The Full Catastrophe by James Angelus. It's very good running marathons at a hundred, yes, absolutely, and a hundred you're entitled to sit down for he could take a cab. He doesn't. He didn't take a cab across the line. He's fantastic. Yeah,

it's really amazing. But in anyway, it's the long story. Short is that you may recall last year two thousan fourteen April, there were about three hundred girls that were abducted in Nigeria, Northern Nigeria by terrorists and I was actually kicking and screaming to a media mogul, a friend of mine, who I said, this is completely outrageous. You know, the media is not even picking up in the story in an aggressive way. And he said, well, what are

you doing about it? And he's a very you know, he's a very famous global media person, and he said, were you just sitting here and moaning about why don't you do something, and so I was trying to think what could I do that was going to put me, you know, in a little bit of discomfort, but actually try and do something quite positive and constructive. So I ended up running the New York Marathon, had a very disastrous time. It was six thirty six, hold and windy.

I did finish, and then your first marathon I did, And then I just did the London Marathon a few months So how did that correlate to the girls in uh? Raised money, raised money for the girls UM and you know, really hopefully brought some awareness to today and there's been more and more coverage about that has been But again, you know, as we were talking earlier, sixty five out of a hundred and fifty countries around the world and now UM considered to be high or I'm very high

political risk of geopolitical uncertainty. Sixty five out of one and fifty fifty nations in the world are at high risk of political unrest. Yes, exactly, This is according to the e i U. So so what does that mean in terms of moving forward, is that we've got security risks, which means people are less likely to want to invest

in these regions. This is a very serious problem for places like the emerging markets where the populations on the age of twenty five, where they need jobs, they need trade, they need investment, and if we're not going to get that because there's so much political volatility, you're creating this sort of cycle where there's lack of investment and therefore you have more populations that are disaffected and they joined

these radicals, interrorists, pocal procal um. I'm trying to remember North Africa's hotbed of this as we know, but also in the Middle East. So at this point is a huge incentive for developed, wealthy nations like the United States and the UK to try and be more productive in in how they interact with these countries. Yes, absolutely, but I mean no, I think there's also a premium to be made for the old adage of physician heal thyself.

I think the United States really gets its house in order, it can actually do much more to signal to the world what a positive society can look like. So we have to get our house in order. That's a shame crazy idea, that's a shame that. No, we won't that that that's the prerequisite. We haven't don't be don't be. So let let me go through my last few questions before you run off. So, since you joined the fields of economics, what do you see as the major changes

that have taken place within that area of study. Well, clearly, as a macro economist, the big problems that we've been shown to not be able to you know, the truthsayers of the future, right, I mean, we were not able to call the financial crisis, some of us were. But I understand what you know. I understand what you're saying about the mac goes back to the science point. It's not a science and people there's are human beings, and you know, I think most economists would be sitting in

Tahiti if we could. And I think that has probably been the biggest mark and probably undermine the profession considerably, and it's made people go back and think about what might be a better way to approach it. There was a wonderful book, I want to say, in the late nineties called The Fortune Tellers, and it described how people economists, politicians, business people who are all engaged in the act of forecasting the future, and they're all terrible at it. And

there's reasons why they're bad. At it. But there's also reasons why they tend to make these forecasts that are attention getting, albeit inaccurate, and that set of incentives are so Um, we're talking about various career options for people under twenty five. What sort of career advice do you give to millennials who are just starting out recent college graduates? What would you advise them? So? I think that two things. One is you just absolutely have to get out there

and buy that. I mean, don't just spend your time in the little environment and community that you live. You've got to travel. The world is living an amazing time where the costs relative costs of travel have come crashing down. Um, there's just a world out there that is really important for you to experience firsthand. But the other thing is that you should not underestimate the importance and the need

for hard work. I think that there is a little bit of this view that perhaps things don't you don't require the investment of time and energy and you know, really getting things wrong, and that experience I think should not be missed by millennials. How much time do we have left? Can I keep here for another hour? What? What's the word? Five minutes? I got the last two questions,

all right, So alright, so we'll make it quick. So so when we went to launch, so you and I of the four of us who are actually here today, went to launch. One of the things we were discussing was what was like being an African woman working in a corporate environment at at places like Barclays and sab Miller. And I said, you know, from my perspective, I'm a white male working in New York as and I'm would have to call myself a New York progressive Jewish liberal

socialist summer camps that Holdwoody Allen line of jokes. But it's hard for someone like me to imagine the obstacles that are are in a path. If somebody like yourself coming out of Zambia, how do you adapt to that? What sort of challenges were in your path? And were they not really challenges? Were there just something that you said, oh, this is just another hurdle to overcome. Well, there clearly

aren't a lot of challenges. And I've been very lucky because many people, not people who were necessary from Africa or black or women or from Zambia, et cetera, have been very supportive in fact, many people don't look like me at all who have given me an opportunity to take a chance. Having said that that, there was an onus on me to also perform when I got those opportunities.

And so I think it's really important for for all of us to understand wherever we come from, by the way, to understand that the world is um is worse off by not having the perspective and the experiences of people

who don't necessarily look like us. And you know, it's it's very it's it's a great disadvantage to our societies um to assume that our little countery of people know how things should be and how they are, because I think that ultimately, in terms of trying to solve the most intractable problems of the world, whether it's growth, poverty, climate change, et cetera, we're going to need many different minds, many different perspectives, and really shouldn't matter what the gender origin, races.

And if societies and institutions recognize that they are the disadvantage, I think that they will um be much more positive about attracting. So so want to related note, you're in London half the time, you're in New York after time. How how do these issues differ in the UK and the US. Well, I wouldn't. I think obviously in the place like the United States, UM, there has been a considerable improvement in participation of people from different genders, people

from different races. I mean, I was just looking at some data on the number of women who are CEO s UM in Fortune five companies. Of course it's not you know, anywhere we don't like. It increased over the last years, and I think it's very important that we are happy and celebrate the improvement. We don't think it's again, it's not a permanent equilibrium. It's a trans transition, and we want to see more Mary Barras and Meg Whitman's and et cetera around And I think that that the

trend is in the right direction. UM. But this is not about a favor UM. We have shareholders who expect returns, we have societies that expect performance, and UM to the extent that we can really impress upon societies that we want to see more of the diversity, whether it's a race and gender, et cetera. Even age, I might point out, these are all very big aspects of you know, our

societies should draw on those those talants. And my final question, what do you know today about the world of economics or business that you wish you knew twenty years ago when you were first starting out. There are no right answers and anything is possible. Anything is possible. That's fascinating. Well, Den Pisa, I know you were running off to lecture Barack Obama about foreign policy, so thank you so much for being so generous with your time. This was really

both fascinating and wonderful. I've been speaking with Dnbisa Moyo. She's a global economist and consultant. If you enjoy this conversation, be sure and look up an inch or down an inch on Apple iTunes and you could see all of our previous conversations. By the way, you are the fifty second UM interview. So this is one year anniversary, so thank you so much for making this so special. I want to say thank you too, Matt, my engineer, Charlie

our producer. You've been listening to Masters in Business on Bloomberg Radio.