Zelenskiy, Singapore’s Wong to Speak as NEF Talks Focus on Risk

(Bloomberg) — Ukrainian President Volodymyr Zelenskiy said only the return of territory taken by Russia will allow an end to the two countries’ war, in an interview that concluded the Bloomberg New Economy Forum in Singapore.

Speaking via video with Bloomberg News Editor-in-Chief John Micklethwait, Zelenskiy underlined that a simple ceasefire won’t be enough, with Ukraine needing to see the return of Crimea and Donbas and a removal of threats.

“Crimea is part of Ukraine. This is not just a state within a state, it’s part of our country and part of our sovereignty,” he said. “Therefore, indeed the de-occupation of Crimea and Donbas will bring an end to the war.”

Zelenskiy also said that Ukrainian officials would go to the site of the blast in Poland to be part of investigation of the incident that killed two people earlier this week, adding that “the most important thing is for an investigation to take place.”

In an example of the rebuilding task that Ukraine is facing, Fortescue Metals Group Ltd. founder Andrew Forrest pledged $500 million to help kickstart a plan to attract at least $25 billion to help upgrade decaying and destroyed infrastructure in Ukraine with more advanced, greener replacements.

The Ukrainian leader’s remarks capped three days of discussions among executives, investors and policymakers attending the forum that were dominated by worries over geopolitical tensions and inflation.

Earlier Thursday, speakers at the forum pointed to signs of stabilizing relations between the world’s two biggest economies following Monday’s face-to-face meeting of US President Joe Biden and his Chinese counterpart Xi Jinping, but concerns remain over flash points.

Singapore’s prime minister-in-waiting Lawrence Wong said that the meeting between Biden and Xi was “a good start,” but that fundamentals between the competing economies had not changed. Former Australian Prime Minister Kevin Rudd said neither power wants a war over Taiwan, in part because neither are in a position to win.

“The reason for that is not because of a lack of nationalism, the reason for that is because both sides are concerned they might lose, militarily,” Rudd said on a panel discussion. That’s “quite apart from the monumental economic catastrophe globally which would come from a full-scale military encounter in the Taiwan Strait.”

On the forum’s other big theme, inflation, International Monetary Fund Deputy Managing Director Gita Gopinath described rising prices as one of the biggest challenges facing economies around the world and noted there are few parallels in recent decades to this year’s pace of monetary policy tightening.

“It is very important for central banks to stay the course,” Gopinath said. “We’ve had false dawns before.”

In its first two days, the NEF featured speakers including US trade chief Katherine Tai, Chinese Vice President Wang Qishan and former Secretary of State Henry Kissinger.

Here are some of the other issues that were top of mind for executives on the forum’s concluding day:

Central Banks

The IMF’s Gopinath cautioned that it’s going to take time for the full extent of this year’s interest-rate hikes to become apparent and she cautioned against hidden risks in the shadow banking system.

“Interest rates may need to go up much more than any of us would like it to,” she said. “I still do believe monetary policy works in the traditional way of reducing demand” as it takes time for their full effect to be felt.

Policymakers will likely need to continue raising interest rates even amid signs of slowing inflation, said Axel Weber, former UBS Group AG chairman. Continuing to hike offsets second round effects as inflation becomes embedded, he said.

“I don’t think they are done, I think they have some more work to do,” he said on a panel discussion. Emerging markets have been “amazingly resilient,” though frontier markets will see potentially “massive” pressures, he said.

Long Journey

Singapore’s Deputy Prime Minister Lawrence Wong said in an interview at the forum that the meeting between Xi and Biden was “important and constructive,” but also “just the beginning of a long and difficult journey.”

“We shouldn’t have any illusions that this one meeting has changed things overnight,” he said.

Wong warned that the lesson from Ukraine was not to wait until conflict arises, but to ensure communications remain open and red lines are understood.

“Accidents can happen,” Wong said. “Miscalculations can happen.”

Covid Zero

Worries over how and when China eventually pivots away from Covid Zero were flagged by James McGregor, the chairman for APCO Worldwide Greater China, who said the government needs to address dampened consumer confidence.

“The thing about a consumer economy, you can’t order people to spend, they have to have confidence,” McGregor said on the same panel as Australia’s Rudd. The government may need to “move ahead with some economic reforms that we’re not expecting out of necessity.”

Rudd said that barring a new Covid variant, China will by the middle of next year be “well on its way to being out of this — that will have a huge positive impact on domestic consumer demand, which has been suppressed for a very long period of time.”

Climate Change

Extreme weather events like deadly floods in Pakistan have made the issue of who will pay for loss and damage in poorer nations a central climate issue, said Sameh Shoukry, COP27 president and Egyptian foreign affairs minister.

The issue of how developed nations should compensate developing countries for climate change-fueled disasters they had little role in causing is on the agenda for the first time, which in itself is progress, Shoukry said in a video interview.

Richer countries, already falling short on previous commitments to the developing world, are wary about exposing themselves to open-ended liabilities. There’s still a “substantial gap” in climate finance going to developing countries, Shoukry said. The loss and damage issue will likely continue to be refined and further developed at next year’s COP28 in the United Arab Emirates, he said.

Energy

In a warning of what’s still to come, Europe shouldn’t let its guard down on conserving energy despite the recent drop in natural gas prices and success in refilling inventories, according to the region’s top operator of gas infrastructure.

“We are in a better situation, but that doesn’t mean we should relax,” Catherine MacGregor, chief executive officer of Engie SA, said on a panel discussion. “On prices, one can expect continued volatility.”

Volatility in energy prices is not good for the system or long-term planning, Yngve Slyngstad, chief executive officer of Industry Capital Partners, said during the same panel.

Future of Work

LinkedIn Corp. Chief Executive Officer Ryan Roslansky said there’s continued to be a surge in job listings for remote work: They account for 15% of listings on LinkedIn, compared to only 1% before the pandemic.

On the same panel, PayPal Holdings Inc. Chief Executive Officer Dan Schulman said productivity at his company increased substantially when everyone had to work from home, though he still sees the need for in-person venues to welcome and train new hires. PIMCO Managing Director John Studzinski said the finance industry has embraced in-office culture as the most effective way to collaborate.

The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.

–With assistance from Philip Glamann, Lulu Yilun Chen, Zhang Dingmin, Russell Ward, David Stringer, Jeff Sutherland, Stephen Stapczynski, Selina Xu, Michelle Jamrisko, Vladimir Savov, Siegfrid Alegado, Philip J. Heijmans, Adrian Kennedy, Bill Faries, Clarissa Batino, Cecilia Yap, Aradhana Aravindan, John Cheng, Rebecca Choong Wilkins, Jill Disis, Daryna Krasnolutska and John Micklethwait.

(Updates with more comments from Zelenskiy.)