The Dubai Chamber of Commerce and Industry building.


Global CEOs warn of economic stagnation in 2021 to 2022 post-Covid


GERMANY – The world faces a long and difficult road towards a full economic recovery amid the coronavirus crisis, according to a panel of leaders at the Virtual Edition of the Global Manufacturing and Industrialisation Summit.

The heads of Mubadala Investment Company, Siemens, Honeywell and Schneider Electric joined a keynote panel on day 2 of the #GMIS2020 Virtual Summit to discuss how leaders are repurposing our economies to deal with a post-crisis era.

The panelists praised swift government financial actions taken to protect jobs and businesses amid the widespread lockdowns imposed around the world to slow the spread of the coronavirus pandemic.

However, they warned that this would likely lead to a period of economic stagnation in 2021, and possibly even through 2022, especially given the potential threat of a second or even further waves of the coronavirus.

Khaldoon Khalifa Al Mubarak, Managing Director and Group Chief Executive Officer, Mubadala Investment Company, said: “Getting back to a more stable period of economic activity, and visibility into business growth, will take time.”

Darius Adamczyk, Chairman and CEO of Honeywell, said that attention must now turn to financing the vast economic stimulus that has been required to support the world’s economies during the pandemic.

He said: “There’s been an incredible level of stimulus in the United States, the EU and other economies as well. Now governments around the world are going to have to figure out a smart way to pay for this that doesn’t damage the economies going forward.”

Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric, warned there was a danger there would be a lost generation of youth who would struggle to find opportunities in a depressed economy in the coming years.

“Protective measures have understandably focused on vulnerable older people in our societies, but the people who are getting punished because they can’t get jobs are the youngsters, and they are the future of our world,” he said.

Tricoire added that government stimulus should also be directed towards small and medium enterprises (SMEs) which provide the lifeblood of the economy.

“Large companies like us live within an ecosystem of many suppliers and smaller companies and it’s very important that we help those companies through the crisis and actually use it to help them modernise and digitise, to be more sustainable and prepare for the future.”

Joe Kaeser, CEO of Siemens, agreed that it was vital for government rescue packages to be channeled into the right areas.

He said: “It’s crucially important that we not only have trillions of dollars of government money and stimulus, but also that this money is invested into future-oriented and not backward-oriented industries, because they are going to die anyway. And if we are not mindful about this today, we risk forfeiting much of the future.”

How UAE’s Mubadala is changing post-Covid

Mubadala has been shifting its portfolio focus in recent years, investing more in technology and moving away from some of the traditional sectors the company had previously invested in.

Al Mubarak said: “The way that we’ve been shifting our portfolio to these areas, be it energy, renewable energy, energy storage, mobility, automation, robotics, artificial intelligence, these are all areas that we at Mubadala took a view on pre-Covid. The crisis now just confirms we were on the right path, and we will continue to invest aggressively in that space.”

Al Mubarak added that one of the areas that Mubadala is now monitoring closely is hydrogen, which holds huge potential to help combat climate change through the decarbonisation of energy systems, industry, and mobility.

Al Mubarak concluded: “The world has changed, and you have to evolve. And I think the companies and countries and individuals that are able to pivot and really look at this new world will be the ones that succeed post-Covid.”

In his keynote speech, Patrice Caine, Chairman and CEO, Thales Group, said: “As the world is getting increasingly unpredictable, it’s vital that people have confidence in the ability of institutions and companies to perform their roles and successfully address the challenges ahead. What has become evident this year is that agility and resilience are at the forefront of adapting to a new normal and building a future we can all trust.

“Our investment in human capital needs to evolve and strengthen with a view to driving success. Countries and companies can continue to be pioneering only if they pay more attention to their role in education. Education leads to innovation; and we must continue to innovate to be better prepared to face any unexpected crises and to help society bounce back and sustainability move forward.”

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