BONUS | Alia Moubayed - The Regional Economy because of and Post COVID-19

FULL EPISODE TRANSCRIPT:Adam:
(00:00)
 Welcome back to Count Me In IMA's podcast about all things
affecting the accounting and finance world. I'm your host, Adam
Larson and today I have another bonus episode for you. This
special conversation features my co-host, Rouba Zeidan and Alia
Moubayed, an experienced economist, General Manager, and Global
CFO. In this episode that discussed the impact of the COVID-19
pandemic and Alia shares her perspective on how the world has
changed because of it. She also shares how finance and accounting
profession can better arm itself for the next chapter of
business. Stay tuned as we begin listening to their conversation
now.

Rouba: (00:47)
Good afternoon, Adia, and thank you so much for joining me for
this episode. I'm really looking forward to getting your input.
You are one of the top economists in this region, and your view
on the current situation and going forward, you know, as we
begin, 2021 is of great importance, and so thank you.

Alia: (01:07)
Thank you very much for hosting me.

Rouba: (01:09)
How has the pandemic changed your role as an economist?

Alia: (01:15)
Well, I mean, the, pandemic changed the way we do our work as
economists, particularly in the middle East and North Africa
region at two levels. The first is, our own understanding of the
economies in the light of the COVID. It requires from economists
a non-traditional approach to analyzing the impact of the
pandemic. So fundamentally it is hitting, people's health and
therefore a key resource. So fundamentally the pandemic is
affecting our work as economists at two levels. First in our
approach in, analyzing, the developments in the economy, notably,
understanding the impact of the pandemic, both at the macro, but
also more importantly at the micro level, because, particularly
that, that the pandemic is hitting, the lives and livelihoods of
people, but also supply chains and therefore industries, and at
the same time global economic factors like oil, and, capital
flows, and trade. So our understanding of, and our approach to
analyzing, economic development has been transformed. But I think
also the second level is, how go about doing our work. The East
and North Africa region, is a region that you cannot analyze by
staying behind your desk and looking at numbers, first, because,
there's less data transparency in the region, and our work as
economists requires us being, in the country, traveling, talking
to policymakers and to decision makers in both the public and the
private sector. And obviously our, ability to travel has been
challenged by the pandemic and that significantly impacted our
work, but thanks to digital technology. We have, moved our work
and our connectivity with people in the region, to all these
platforms, Zoom and others, and they have also transformed the
way we interact with decision makers in the region.

Rouba: (03:52)
Every quarter IMA and ACCA collaborate and we publish an economic
conditions report, which details global developments, and in the
most recent global economic conditions survey, which covered Q4
2020 and the middle East region recorded a huge jump in
confidence. In your view, what is driving this kind of progress?
Is it the easing of geopolitical tensions? is it the continued
recovery in oil prices and demand? I mean, when you look at oil
prices, they've jumped around 25% to $50 per barrel between
September and December.,and also, what are the challenges that
remain ahead for the region?

Alia: (04:34)
Sure, I think all the factors that you have listed have been
important in shoring up, sentiment in the region, and I think,
the four are essentially, first one is a sign that we have seen
in Q4 that there are signs that the vaccine is at a reach and
that a rollout is imminent. So that has, given hope of the
resumption of economic activity, particularly in the hard hit
sector, service sector, which constitute a large part of the
services economy in the region, but also globally. I think
certainty from that sort of, this, expectation that a, economic
rebound is slowly on their way has transpired into the demand for
oil, even though there are still pressures and uncertainty on the
outlook for demand for oil as has been estimated recently by the
IMF, but also by the International Energy Agency, however, I
think the response from, all exporters, particularly in the
context of the OPEC plus meeting to, to curb and continue to curb
supply, has also helped, bring oil prices, to levels that, that
affects sentiment in the region, I E 50 plus, level. And I think
as long as, as oil prices remain in that, in that bound, the
pressure, particularly on the, fiscal, and external, wind oil
windfalls to the region, will be much less than what we have seen
in 2020. And that takes me to the third factor, which is really,
in Q4. We have seen, most with Eastern country countries,
particularly in the gulf put out budgets for 2021, that confirmed
their commitment to supporting, their local economies whether in
Saudi Arabia or in the UAE, in Qatar. These are budgets that have
maintained, some form of minimum fiscal stimulus, but also there
have been a rollout of many of the liquidity packages that have
been provided by the central banks or, delaying, the periods of,
further exemptions from paying taxes and fees. So alleviating the
pressure on, on businesses across the economies. So the kind of
fiscal and policy framework, that has been maintained for 2021
also has contributed to the sentiment. And, finally I think, what
we have seen is also the reduction in geopolitical tension on the
back of the U S election, and this is a perception, at least so
far, that, a diplomacy and not confrontation, will be the theme,
when it comes to, to dealing with the, many, complicated,
tensions, that has marked the region for a long time.

Rouba: (08:19)
Undoubtedly, the global economy is in a very fragile state at.
Its worst state since 1930. COVID infection rates are increasing,
was the virus continues to mutate. And what lies ahead will
definitely include further lockdowns, compromise, consumer trust,
and respect of spending a lot of strain on cashflow and rising,
private, and public debt that to name, but a few, but the
progress made on vaccine approval. And what is being dubbed the
most ambitious global vaccination campaigns humanity has ever
seen. It kind of raises hopes for a permanent economic
improvement. How do you see its successful implementation
impacting the regional and the global economy? And can we hope
for an economic bounce back?

Alia: (09:09)
I think, bounce back is a bit, too optimistic. I mean, there
certainly there are based effects we quote because we are going
to go to go from a deep recession, as you rightly said, I mean,
let's, let's just put some numbers here. I mean, the word economy
and the world output, is estimated to have been, to have
contracted by, by 4.4%, in 2020, with advanced economies 
contracting by around 5.8% while emerging markets, by, a 3.3%.
These are by far, a very deep recession, and obviously they will
leave deep scars in, in many of the economies, therefore, why
there will be a rebound from this recession, however, there is a
great uncertainty first on the, extent and strengths of this, of
this recovery, but also on its durability, because, first we are,
we are seeing, unfortunately second waves of hitting in many
countries leading to second waves of severe lockdown,
particularly in Europe, and in some emerging economies, but also,
the rollout of the vaccine will be a long drawn, and it will take
time. It needs resources, it needs the right infrastructure.
That's why maybe in the developed world, they will be able to,
they are relatively well prepared, although, I mean, not all of,
all of them, but in much greater part of the emerging world, that
w...