Piyush Gupta: «Tensions in the U.S. Are Not Just About Race»
Although uncertainty is rising, DBS group CEO Piyush Gupta stressed that what is certain is that the post-COVID world will undergo profound shifts in economics, politics and social politics.
From economic growth concerns to rising social and political tensions, the coronavirus pandemic is expected to fuel not only long-term headwinds but also disruptions to longstanding fundamental assumptions.
«The impact of Covid-19 in respect [to] lives and livelihoods is apparent. What is less obvious is the large number of fractures that this pandemic is unmasking and the several trends that it is accelerating,» said DBS's Piyush Gupta, during the bank’s virtual conference.
«The future of the world is economics, it’s politics, it's social politics. In fact, the very way we live is going to change profoundly from here on.»
Economics
On economics, Gupta highlighted the immediate focus on the changes in macroeconomics especially with regards the post-COVID financial environment which will shoulder an additional $10-15 trillion in fiscal debt. Following the negotiation of an exit from extraordinary support, Gupta underlined the critical tail risks for growth outcomes.
«Are we in for a world of hyperinflation of are we expecting to see the 'Japan-ification' of the entire world?» he asked in a video featured at the bank’s virtual conference lobby.
Quantitative matters aside, he also noted qualitative changes in economics such as digital consumption on the demand side or work-from-home measures as a norm on the supply side.
Politics & Social Politics
On geopolitics, Gupta named the increasingly rising U.S.-China tensions and their impact to the broader economy. Potential effects include an environment with two tech regimes and a fundamental shift in supply chains.
And on social politics, Gupta highlighted issues about the rising wealth gap which has emerged since the global financial crisis and been further accelerated by the pandemic. In fact, he suggested that worsening inequality and public sentiments against the «1 percent» have been drivers in the recent «Black Lives Matter» movement.
«Some of the tensions in the US recently were not just about race,» Gupta said. «They were also about inequity.»
Post-COVID Evolution
As a result of the pandemic, Gupta expects more spotlight to shine on environmental, social and governance-related factors across the public and private sector. In addition, he also sees profound shifts to specific industries such as healthcare, technology, and food security and supplies.
While he has covered vast grounds in terms of the areas that will be impacted post-COVID, Gupta is hesitant to predict actual outcomes.
«I think it is quite clear that crystal balling and crystal gazing is going to be difficult. Frankly, nobody knows all the answers,» he said. «At the same time, it is equally clear that it is incumbent on all of us to reflect deeply and reflect seriously on these issues. because our thinking and our actions are going to be fundamental to describing and defining the new world and the new economies that we wish to create.»
