COVID-19: The view from Mexico

Key Takeaways

hello I'm Peter Tufano the Dean of sight busy at the University of Oxford welcome to the latest in a series of events and conversations called leadership and extraordinary times the series has two elements the first we hear from we're leading academics from Oxford and other parts of the world who can help us understand what's going on and how to deal with the set of health economic and humanitarian crises the second part we hear from leaders at the front women and men who are in positions of leadership in these extraordinary times well the science of the coronavirus is not defined by Nations or regions these economic humanitarian political and other implications vary dramatically across the world in the coming weeks we'll be speaking to leaders in different regions the Americas China Africa and more to understand what's going on in their areas I think that we'll find that while there are clear differences there also similarities and themes arrey I could echoed in this series which will resonate across countries the need for principled leadership the need to make evidence-based decisions and the yeah unsatisfied need to collaborate today we traveled to Mexico to hear from two leaders in the business world they're introducing them today and moderating the discussion is my Oxford cited colleague professor Matthew Hammond Gil Matthew is a member of our international business group as a scholar of Latin America with particular expertise in the political economy of development and global world global labor standards his work explores the politics of promoting economic development that is both equitable and sustainable Matthew's research is rooted in comparative political economy and focuses on regulation Latin American politics and global labor standards however do you Matthew for a great afternoon thank you very much thank you Peter so I'm very glad to be joined today but I guess that a guy and Maria ELISA Alberto is a co-founder and managing partner of agnya a venture capital fund in Mexico he was chairman of the board of Banco Palmas the largest microfinance institution in the Americans and importantly as a member of the society business schools Global Leadership Council he's been recognized internationally as a leading social entrepreneur and has more words and is on the board of more organizations that I could recount in this brief bio we just be here his accomplishments so we're thrilled that he can join us Maria is the general director of a new institutional stock exchange in Mexico Viva she is also the founder and Managing Partner of facial design the company develops and markets products for women and she was the CEO of Annex cap the Mexican Association for private equity and venture capital again these are only some of her impressive achievements and we're delighted to have her with us as with the other leadership and extraordinary times gasps I will interview a little Maria for about 35 minutes and then we will open the floor up to you all who are out there watching in your questions um before we get started I'd just like to echo Peters points and highlight some of the reasons why I think that this session is particularly important as Peter alluded to the response is from businesses governments and society this pandemic have been starkly different throughout the world well today we begin the process of taking these diverse experiences seriously as a global community to Oxford we come from and work in countries all over the world operate globally at a minimum you need to understand what is happening around the world and at a in addition when we learn about the experiences from a variety of context we can better understand what's happening in our own home countries and other places as the current crisis deepens it's forcing us to reevaluate our priors about what allows societies and businesses to respond effectively and equitably in the face of such large challenges and for this reason I'm especially glad that I little money have joined us today so I'll start out broad before we get into the specifics and ask you before the pandemic kid what was happening in in in Mexico's economy what would were promising opportunities where were where were things going positively I'll start that's ok with you thank you Peter thank you my innovation I'm very very honored let me just pick you back three to five years ago in Mexico we were doing good maybe we reach innovation stages very comparable with many important out outperforming growing regional economies and this had grown private investment in the form of microfinance companies financial letters and also venture private equity managers that were you know supporting this entrepreneurial ecosystem we saw spaces for new ideas disruption innovation in access to capital in fact in fact they had been amazing to see the whole ecosystem strengthening across America startups and entrepreneurship ecosystem was really really flowing in fact Global Entrepreneurship manager considered latter as one of the most important region of 30 entrepreneurship worldwide I'm talking innovation in several industries we saw important activity within the Pinta space specifically since almost half of my times population remain on them so in terms of venture capital the last five years were the most active in terms of transactions and amount invested I saw it through a mix cap when I was leading the private equity Association and there we experienced and saw is great 22 percent an appropriate for ten years we got to the point of having eight months of private equity through more than an average of 50 active France and Mexico managing more than 58 billion under assets under management we transacted more than 2000 companies and those are you know becoming important growing companies institutionalized and we I think we actually managed to you know to mature and transform this traditional way of doing business you know as family owned business we're very you know traditional and not reaching institutional investment so we started to see mixing startups being funded from international investors as well and all of the sudden big names you know soft banks and many others came in so in the past three years we saw at least 50 startups that we had received Rams about five Millions with some that had even received more than 100 individuals so in the sense the early and expansion stage funds were boosting but we were not seeing many exits now equity investors some of them specifically Liacouras which are the pension plans in Mexico were participating from beginning right around 200 2005 2008 but we're supposed to you know be seeing exit soon they even see creating only 4% of exits were tapping the in the markets compared to other economies with where private equity growth there's amazing companies pulling and investors took the pretty bad so the reality is that EU funds in Mexico we're actually considering the market answer exit strategy so what was happening actually we compare the size of capital markets we're very very behind its potential the role market capitalization is equivalent to 30 to 73 trillion in reserves and of this amount point 51 is represented by X alone the market is considered small not found normally stagnant with the same companies no investors no dynamism very boring in other countries capital markets have active fund funding participation even for medium and password companies in Mexico or my market is only responsible for 9% of the total national financial rights so this is why was the objective Vibha behind the handle in order to offer an efficient and accessible funding option for medium-sized growing companies prepared early those back quite privately hundreds of businesses immediately across capital to supporting manage risk in the years ahead in nobody stop in startups and major technology corners even know even we did a hub for Latin as well that could attract more activity into the region we saw all of this we are of you know all medium-sized companies or mature startups reaching higher series our graduated pizza companies so we had a great great potential of market out there that was not being certified markets at all Viva you know has been an important actor we have been in place since August 2015 and started operations with three very important improvements in both primary and secondary markets we used NASA technology and that has been able for us to attract new institutional investors to dynamize our credit as of today only one and a half year after operation started we have reached an average of 20% of money market share we're doing so more than 37% so we've made open innovation we got regarding in this index is more inclusive we've reached more than 37 new securities that have been listing in Viva and we have been financially more than twenty billion dollars so far so we were you know confident that we were doing our job we were creating an option of different option to access the credit for investors in winning the private equity industry that we saw was not looking into the public market as an exit strategy so that was okay but no after after year and a half of our new government he has been really quite a challenge complete change political and economic policy an economy that had already stagnated and Psyche into the denial recession in the first semester of 2009 nineteen accompanied by decisions taken against long term investments such as a new airport for example and among others that have been so completed was so even before the pandemic we saw to decrease in processing flows of non-resident citizens we saw retraction right right pouring in November more than a billion dollars so we believe me you're reaching let me just compliment with Maria was saying and you know some things which were really exciting before the pandemic Matthew was Mexico a friend of mine says that when when the world ends he wants to be in Mexico because everything arrives late in Mexico and and the the digital revolution is no exception and to this either right late but it really arrived with a force a little bit as Maria was saying in Mexico today we have hundred percent of the working arrows to connect it to the internet we're the the market with the highest growth of e-commerce in the world above India of China and Latin America actually as a region is the highest growth ecommerce marketing in the world and some large companies like Facebook or Netflix or Spotify or Amazon have seen Mexico's as a very important market for example for Netflix Mexico's second largest market in the world and for Spotify Mexico City it's its largest market in the world on top of for example New York and for Facebook Mexico is number five and Amazon started until 2015 talking about coming late but it's the market where it's reached a billion dollars in sales the fastest and so so we were we were seeing a tremendous detail revolution and that's something that was going on really well in Mexico before the crisis great so there's an interesting view of things exploding and going really really well and then sort of a crisis hitting before this this current crisis so why don't we move up to the current day and and and start with the the focus on capital markets so I this crisis hit what's been happening in capital markets around high-growth firms around foreign direct investment what impact is that has that had in these last month's sure let me just go back to 2019 and we we ended easier week Ultima highs in the international capital markets with the longest bull market period in history some of the main world indexes such as the S&P 500 the fact around a penny from pious the day exam dates from Germany close in an average 30% growth even one in Latin America Brazil was participating around this the strangest of real returns Mexican market close though with a modest 4% due to national factors uncertainty and low economic growth expectations so we started 2020 and despite this trade agreement that was reached early January between US and China the US and global markets began to speculate and show some volatility given the expansion of monolayers closer closure of factories shops contraction of the productive supply of this country which has history he started to being the supplier and created a whole global wealth so our risk as a result of rapid rapidly developing global pandemic heat global stock exchanges so for the worst intraday fall since 2008 limiting at Passy and Pacific start to require in terms of dry cleaner and quarter per activity the SMP 500 increased more than quite trained by persons leading to new bear market state wide case of Europe and Germany London Spain France all have collections of over 30% doing it this year in the same month market volatility reached its highest level since the global financial crisis as well Mexican place was no exception expectations for job creation in Mexico for the rest of the user- and local consumption will fall approximately 5 percent this affects the results of our capital market and we compare our proper index which is called puts it even in April to to April 2010 until were looking at a 50 percent increase in density and that's all I know growth expectations of Mexico are being revised downwards as well according to various banks and financial entities applications ranging from minus 3 to minus 9 so we've seen a contraction from investors to little country not only spectacles spectacle about Mexican situation and economic expectations for the rate study we are not only facing Kovic but also we have the various factors some to displace with the old oil crisis as well have direct effect on Pemex and that resulted in a downgrade of accompany and I'm sorry so this this situation also compromises the viability of the all productive productivity in Mexico and that's that has gotten also the fact government all of revenues from down we have a currency evaluating to history to historic numbers recently real special collaborations that have surpassed 25 pesos per dollar range so this context has been accompanied by not well perceive government decisions such as cancellations from order for investments such as episode on conservation brands and and finally the persistence of federal government to carry out with large investment opportunities that that not yet demonstrated physically so the outlook for the remainder of 2020 is highly uncertain and until the markets become more comfortable with a consensus on the effects of local measures on the economy and how recovery will look after best measures you can expect further volatility and fund managers rebounds and these are portable impact power markets as well and we are so not seeing any any movements any employment or any pipeline in productive or developing projects so we don't have any check that is or sharpies or weeds or any any projects in the short run well and Matthew let me let me and put a more positive note because clearly the macro situation here is is is very very concerning but as I was saying we were coming from from a big booming that in in the digital space in the digital economy in Mexico I'm partly because still things were very under penetrated that penetration of e-commerce for example in Mexico was at half that of Brazil and Brazil was about half of the United States so in general it was very under penetrated and this this pandemic has become an accelerator to the deal to a economy and and and we're seeing it already and give let me give you some examples you know a company called the new way that operates in Brazil in Argentina has since see seen sister since the crisis between 100 to 250 percent growth this company helps SMEs to start selling in e-commerce or a company called a Canada which does early childhood education and has increased about 120 percent since the crisis were a company called Archos that does build collections you can now pay your you know your utility bill online instead of what people used to do going to the back etc it has grown 135 percent since the start of the crisis and so these are some examples of companies that are doing really well in general we are seeing tremendous growth in the whole space of of the deal T economy so this is a this a huge opportunity for new entrepreneurs and a huge opportunity for new talent then that a world that is moving from analog to digital great it's that's that's fascinating it's interesting to see the way or the baseline was in terms of penetration creating there's new opportunities for really really rapid growth as I'm thinking about the services that they're talking about I'm imagining sort of the the users of those services and some of the smaller firms that that they might be competing with the small stores on the corner and the micro-enterprises so it's sort of thinking about it from the workforce level and sort of the the great majority of TVs of small/medium eyes size enterprises and the workers who are both in the formal and informal economy what's been going on there and how those sectors been holding up we got here however we can't for some reason we still can't hear you a little hopefully one of the tech people will get you sorted quickly many a heady thoughts while we wait for a little to get sorted out I hate to put you on the spot yeah sure yeah you back muted something happened that that you can hear me and I don't know what happened so anyway if you can put a slide number a number eight and we'll go from there two to support me to answer this question so um in Mexico we had before the crisis we had very very low historical lows into in terms of go to number 8 please and um we have historical loads in unemployment and so we were confronted the crisis for a fondo of strength from that point of view and however obviously things have changed significantly so let's go to the next slide and so I'm not present here what's going on in terms of micro entrepreneurs in Mexico and and also people that are employed so since the crisis when you ask them what your biggest concern and number one day answered that their debts and number two is their job and number three is their health it's interesting how low health is which tells you a little bit that the message hasn't really penetrated and on how deadly it is bad viruses the the different colors is in the past four weeks so this situation has stayed pretty much stable in the past for which it hasn't gotten worse in the past four weeks in the next slide and as you can see here and you can click one more time please one important part is okay people don't have a job but they usually either receive government subsidies or help for family members in the case of Mexico is very important for example money transfers for that from their family members that are working in the u.s. so 60% were receiving some sort of subsidy or family support so what has happened with the support since then if you click one more it's about feet about half of them have lost one of those supports so this is obviously something which is quite quite dire especially for for people in the base or pyramid if you go to next slide and now if you are a make mic entrepreneur I see if you ask them what what what would you say is that 11 percent say everything is the same but four weeks ago was thirty percent so this situation has become quite working for which even though in the past couple of weeks has stayed a quite stable now 50 percent have closed their business imagine you're an entrepreneur mic entrepreneur that's selling in a you know as a fruit stand in the street and you are living in a daily basis and either you're not selling or you have to close your business and 36 percent of them have decreased their shelves now if you're an employee 16 percent says everything is the same but four weeks ago was 35 percent and about 17 percent has been fired that has stayed quite stable in the past four weeks 37 percent have experienced a salary reduction and and again it has gotten worse in the last four weeks and eight 18 to 20 percent have been paid for I still have not been paid for still word so the situation is quite dire in the base year pyramid go to the next slide now if you ask them what's your income today versus before covet 19 on average is 30 percent income versus before covet 19 this has stayed quite stable in the past four weeks but the big question is how long will people be going to be able to last with one third of their income and and and this is this is the part that is most worrisome in in in Mexico right now the majority of the population are earning one-third of what they were they were earning before how long can they last wow that's sobering to think about so in inter thing about the size of this problem can you describe what the government has been doing so far to confront it and what is sort of the main sense of that that had been taken there's been a lot of comparisons between Mexico and other parts of Latin America in particular and other other governments on the left like like in Argentina have seem to have taken a different route so what's been happening in Mexico to confront this yeah well as I was saying basically 99.8% of companies or as a meze in mexico and that reduces to 5 million companies of which 50% are equal so government announced as part of its economic recovery only 2 million loans for this company's greatest primary one of those million will come from the Mexican social 3 inseams Iran crates around $1,200 which continued in the cost of wages I think will be their law to be enough to cover it plus government said that the so these sort of loans will only be given to us and demonstrate to have not reduced the workers during the previous month so that makes even harder for companies to get along and basically lessen the other the other million will be given by the Ministry of Economy and those are also $200 credits but for self-employment mostly important sector including taxi drivers waiters markets on roads and servants so 20 package from the governor was less than 5 percent that you know packages were larger companies and no streets with Chatswin intentions assuming all the economies so as you said you know other other countries such as Colombia and Chile packages between 5% unity in addition the current federal government has decided not to incur more debt not to make use of experiments by International Monetary Fund and that and not to postpone high investment projects in the short term such as a minor three and the canary below us so what we see in its many of this business had been closing resulting in unemployment and economic applications just in Europe 2020 the government announced that happen million jobs were lost this figure especially alarming when when considering that he is only accounting for formal jobs so the negative impacts for most disadvantaged will be felt for years to come within education health care and access to so basically that's the part of the government and monetary sure so obviously we have the central bank and that can also do they announced and a liquidity line for four banks approximately approximately thirty billion dollars and one part of it one-third of that was to fund SMEs and which is when when then an announcement was made that was a very good very good news however now that we're starting to understand how that will work it's going to be extremely difficult to implement so as a comparison to to the PPP in the in the US the support that was giving to SMEs which was very simple to operate this one is tremendously difficult to operate so we are not very hopeful on those funds making it today today to decimals and then there was also a big announcement from the part of the IDB the inter-american Development Bank together with a group an organization of business people in Mexico to also provide financing to SMEs they announced about twelve point five billion and but this turns out that it's only good for those that those at Sammy's are b2b that sell to businesses and that's a minority of the SMEs the majority of the SMEs are b2c they sell directly to consumers so unfortunately there's not a lot of help in Mexico the the announcements that have been made it's only 0.1 percent of GDP for help and when you compared to countries like a rule which is you know in the high single digits and the u.s. obviously what the US is doing just to put things in perspective they the incentive package from the US is 2 times the Mexican economy and which also brings an opportunity for us as an export country today to the US but we can talk about the layer great great and you've been talking about the macro government response have there been pockets of excellence at the state level certain states managed to get out in front of this a little bit more so that there has if you can put if you can put slide 13 and I can show you a little bit of of how states are faring differently in terms of of the pandemic and so if you go to the next slide so here this is a heat map of where the different states are and and it's divided in three groups it not Group one are the states are doing the worst and group three are the states that are doing the best and the the different columns are you can see number of deaths and hospitalizations etc so the good news here as I as I was saying earlier is that some sound of the states are very much an an export engine for Mexico for example novo Leone which is at the at the Bell in group 3 is doing very well now along has a lot of manufacturing facilities that export today to the US and so there are some states that are doing extremely well in facing the pandemic and they're well-positioned to capture that opportunity in the US when the US starts the economy again and from a geopolitical perspective the fact that the u.s. now wants to diversify more from China this stage will be able to capture a lot of that demand from from the US so at the regional level there are there are good news that's good that's great to hear and you know I've read somewhat about pressure from the US to get factories opened along the border and it's sort of secret synchronizing the pandemics across the two countries seems to be complicated and what are your thoughts on and how that might influence the you might be exit although we're all really speculating and thinking about the exit throughout the world it would be interesting if your your build on that a little bit of geography and and proximity to markets and thinking about potential lights at pathways well and a Mexican president about a bit more than 100 years ago said a show closed from from from the US so far from God so we am we have the benefit of being very close to the US and that puts us in a position of strength and clearly as we speak they they the cabinet of the of the Mexican government is having meetings to see which sectors are gonna allow to open up and at what speed and very importantly as the graph showed in what readings because you have to think regionally here those days are doing well let them open up sooner and be able to connect with the supply chain of the US one obvious one is there sector we have a huge out of art sector that supplies to the u.s. Oh II am sore car manufacturers it's been said that that will open up in the US on May 18th for them to open up they their supply chain needs to open up and and there are huge companies in Mexico that's applied to those a car manufacturers and obviously that needs to be connected so and hopefully hopefully that that's that can be implemented supposedly this Friday will be announced how those companies will be able to open up right great um we'll see so we have a number of questions I've been coming in now and from all over the world to you all so I'm let's start with with one that came in from from the UK and and going back to the discussion about what's happening in capital markets and the question is the despite volatility one of the elements that make the Mexican market attractive so exchange rates skilled workforce and what's your sense of really what what makes Mexico an attractive investment destination yeah yeah thank you money I think Mexico has a great opportunity as the Sun rose it seems you're proximate to the US and we have this agreement Megan you have great potential to really together I mean in short you know as soon as US opens up Mexican can start opening operations in that sense and I think that makes us very compact very competitive area but also I think we learn all the talent in Mexico over technology we've seen you know the opportunities within the financial sector to deepen our financial my financial markets not not only within the back to the banking sector but also making the markets other non-bang sermons you know more more reliable more more open to innovative new new startups I think that that's a very interesting area that Mexico has has has their future anything I mean we're not saying it's morning funds from abroad and investors looking at opportunities and Mexico in terms of allocating capital to these new technologies digital as I said you know physics non-banking institutions that also permit that capital T as unique and in those areas will be important to develop and and accompany the process of the process of Mexico being next to the US and opening new ways of trading within us just to compliment I mean a couple of things one is Mexico has great talent we graduate 120,000 engineers per year and one interesting anecdote is for example with Lego the toy company came to Mexico and and set up a manufacturing facility they were the first ones to be surprised that out of 1500 people that they had to hire they there were only two expats and because they they found tremendously good talent in Mexico and in specifically in areas Maria mentioned FinTech there's a huge opportunity in FinTech partly because the low penetration of financial services but also because incumbents have a lot to be desired on on the quality of their services in that is for example collective Assamese there's a cute opportunity I talked about exports all about logistics it's a huge opportunity and also industrial facilities and everything about e-commerce and this pandemic will create a huge change in behavior and a lot of people were still reluctant to - do you buy through a through e-commerce and now they are having to do it they're being forced to do it and they're figuring out that it actually works that you pay and it's ok and and and the package arrives and and that's going to change behaviors and the boom that we're gonna have in Mexico it's gonna be huge those - just to give you some numbers by 2023 we expected to have about 11% and penetration of e-commerce now by 2023 we expect to have about 15 to 16 percent penetration of e-commerce which is where the u.s. is today so so just around the corner we will have the penetration and as you can you know the disruption that is going on you're in the UK the UK right now is at around 18% so we're gonna be close to a country like the UK in just a few years and that's a huge upper third well so one of the questions you just answered was is thinking about the opportunity to start digital services and locations as Mexico is and I'm understanding you're saying that there's a there's just going to be an explosion of growth that makes it a real advantage another question that came in actually from Mexico from viola Garcia was is about the rate of recovery of the SMEs so how fast do you think and this was for a little that the SMEs are gonna recover from me from the crisis triggered by Kovac 90 so let's usually when we talk about this amis we're also talking about micro enterprises so Maria was giving us some numbers about about that we have five million companies in Mexico including micro enterprises so let me just give you some numbers so there are SMEs which are companies between ten employees to a hundred employees there are about 115,000 in Mexico companies below and ten employees there are close to five million in Mexico okay so let's separate between the micro enterprises and SMEs because these are two different problems micro entrepreneurs are very nimble so the lady that had a fruit stand today is selling antibacterial gel or she's selling face mask masks so she switches her inventory and her business very quickly and the numbers that I showed tells that it's very worrisome of you know they are also very resilient but how how resilient can you be well so you know they will they will recover they will recover relatively fast because they tend to focus um basic needs the SM is again companies from a hundred employees to Detroit from ten employees to a hundred employees the holes will take much longer those are much they those are much more connected to the macro economy and when you when you put on top of that the fact that there is no access to financing and just to give you some some sense of dimension credit to SMEs in Mexico is 2 percent of GDP for example Brazil is seven percent of GDP Peru is eight percent of GDP Chile is 11 percent of GDP so penetration of loans to SMEs in Mexico is tremendously low that lacks financing it's going to be very very hard for them to recover anytime soon okay well I'm thinking about that and the plumbing effects of that one question that came was whether or not the government will or should implement universal basic income if the crisis continues past September and we see a second wave that that that comes back through in the autumn I mean what one of the issues that we have with with this government it this is this is a very interesting government to analyze because it's it's a leftist populist government but you've never seen in the world a populist government that does not want to increase its levels of debt so for any of this right or wrong you need to increase your level that you have to get the money from somewhere and and also because it's going to take a long time for SMEs to - to pick up taxes will probably go down so they need to invent themselves so it seems like they were not willing to do that and opposite to what most people are doing or most countries are doing in the u.s. in the world most countries are doing counter-cyclical and initiatives and there are reasons in their philosophy of why they are not willing to do that and we get into that but the fact is they are not willing to in that themselves so they don't have the funds to do something like that okay you know I think you know basically the packages that we're seeing the micro companies small and micro companies and the informal one formulating formal employees you know we're not really seeing something for medium and medium sized companies that have invested that that have a you know manufacturing plant or that have a store and that need not be capital to go on oh and and that's exactly I while we're trying to sell you I mean Mexico as a as a financing system that has only been looking at traditional banking and you know also the government has only seen the pinecone as a way of getting that recovery package out so I think with your reasoning this other part how do we tap into the destinies that are being capitalized by non non banking institutions so when we believe is those can be tapped through market those are accredited those and for those that are already accredited within the market government can can you know can King push some capital into those angels non-bank institutions that are listed and though and that capital can flow into the as a means that there are accredited so I think we have this other part that you're not talking there we're not using and you're forgetting and that's a lot of companies out there in Mexico than me they need the capital to pass this this crisis no and also and for the future I need to get in line with with the Grail but we need Mexico we need other institutional investors order being that individual investors participating in the financial markets we we have a very concentrated why not an institute institutional investors in Mexico you have really participated participating in the venture capital industry for example we need and no development that's actually active right now so we need to push those investors those institutional investors again to get the flowing of essence right from the front from the early alias area statistics and that poll will continue to through the of the axis of mr. vehicles or not listed but that the slope the capital will flow with larger companies I think it's important for them and I think that's not something that we have been telling the government not only you know to look at packages in implication as I was saying but also push institutional investors this structured vehicles can get access to capital for those entrepreneurial ecosystem and in essence great thank you so well another question that came in is more general stepping back as we get to the end of our for our hour together um and it's a question from Samuel say what kind of leadership do you think the world is looking out for during these these difficult times and thinking about what kind of skills and traits of leaders well I think I think this in this is a really interesting discussion in terms of where this endemic this world crisis and that we're facing we're facing it I think with very weak leadership and when you think about when was the last time that the world faced such a large crisis it happened probably in World War two and in that case we face that crisis with very strong leaders leaders we now look back to the Churchill's and their roots as as examples of great leadership and and I think I think the leadership that we now have it leaves a lot to be inside so we we definitely are handicapped in facing this crisis them when you when you will do a correlation of the countries are doing the worst in the crisis and the the type of leadership that they have there's a strong correlation between pub lists and not doing well in terms of the on the pandemic right so to answer the question we definitely do not need publicists and because the numbers show that they're not doing well in facing the pandemic and the biggest oculis they're doing don't populist are doing better Argentina stands out I would say as someone who often thinks a lot about Argentina's difficulties there's a populist government that's taken a very different turn but I know there's definitely always exception to the rule yes and now once the pandemic is over we have the economic crisis and and and that's gonna be a long winter and so I think people that that have a much better understanding of the economy and how to say that better would be a very strong capability for leaders great many of you know the way I was maybe thinking on you know committed leaders risky leaders activists needed our leaders are working different ways are flexible there are resilient that can engage their talent into into new ports of you know every day into new ideas every day that can be certain to others positions or positions and take those recombination see I think that's exactly what we mean we need to be able to move in navigate different people ways and be able to be flexible Merlin take one thing in that question it home to Mexico and I think once after the economic crisis were gonna face a social crisis and we have a huge difference our last big economic crisis was in 1995 so it's already been 25 years but in that case we had two big benefits one was the bailout from the US and the second was emigration about three million people emigrated to the US which that was a huge press repeal for us this time around were not gonna get a stoppage by the US they have their own problems and to forget about emigrating to the US there are no jobs there so why am i doing right and so there are no there are no pressure about this time and without a pressure Bob the social crisis will most likely be dire and so locally you will need a credible leaders that are able to work with society so that in the social crisis doesn't get out of hand so so to end on an optimistic no we have just a few minutes what are your hopes for the world that will emerge from its other sides we've talked about so we have this priceless but but things have shifting what are your hopes for for where we might be better off well I'm actually quite hopeful on two fronts one is we will talk about the change in behavior and for the first time we've been talking about not having profit as they as the only objective Sayid is a leader in the world in in social enterprise and and it's had for many years a focus on how to create a better society so for the first time we did not put profits or the economy as a priority we put health as a brotherhood and I think that's a huge shift in the paradigm and I think that paradigm will remain and that world that many of us were imagining for many years and especially you know Oxford aside the new generations that really understand how profits cannot be the only priority I'm not saying that it should be a priority that it should not be the only priority I think that world that those that the generation is managed imagining it's going to happen and the new generation it's much better prepared to cope with that type of a of new rules and so I think it's a huge opportunity not only in the fact that those rules would change but to that for the new generations and if certain part that I'm very optimistic about this the world will become much more digital and by the world becoming much more detail there is a lot to be said that the the world will be much flatter Tom Friedman wrote the book the world is flat already know about it 15 years ago with this now the world would be become much more flatter now we're used to working remotely and now you'll be able to much easier hire the computer scientists from Thailand and that before you know you thought that probably you need to bring him that person locally etc etc so I think the the it's gonna be much more democratic okay Maria I'll give you the last word no I mean I'm optimistic as well I mean I know this is a great challenge and we're leaving very tough points but we have leave them in the past and we have recovered and markets recover after all I don't know if it's gonna take one month or one year or ten years but will be will be and opportunities will be there for those who are ready to take them so investors all around will look and we'll keep looking for those opportunities for those managers for those entrepreneurs for those great ideas for those that took this time and use that strategically to become more I don't know with more R&D or with more lean teams I don't know use this time for the companies use it to be I don't know more strong for the next the next and I think opportunities will be there investors will be there capital will be there for them and I think we were there for helping those companies reach the next step than reach the next level we won that company those entrepreneurs we want a company those BC politic responds to those companies but the wanna take the next the next level they want to take in the markets and make available this opportunity for many other people through so we we are in a good in a good moment to retain to reshape and to be ready for next the next level and if I might I find my old deities have have flourished after pandemics and Wars and great innovations have emerged of after times of crisis great well I'm it's a great note to end on segue to the next session that we're gonna have in our leaving you know an extraordinary time series on Thursday that will focus on on on entrepreneurship and asking how entrepreneurs cannot just recover from the crisis but actual helped rejuvenate the economy so I'd like to just wrap up by thanking you very much for joining us today we've been wonderful to hear your insights to learn what's going on and for all US tech side business school thank you just that my deepest thanks you you you