Joao Vale e Azevedo: Lack of long-term policies are Aggravating Today’s Problems

While Covid-19 has heavily influenced last year’s economy, specialists are suggesting that economy in 2022 will be defined not by the coronavirus, but by central banks. According to Bloomberg, for the past two years, the U.S. government has distributed a trillion dollars in federal stimulus and the removal of it would inevitably create a hole in total demand worth at least 3% of GDP. In other words, now that the world’s most important central banks are withdrawing support, 2022 holds a worrisome perspective.

This is no news for Joao Vale e Azevedo, chairman of KUNST Global – one of the largest equity firms in the world. As an influential voice in international finance, Azevedo thinks the prospects are not optimistic as the numbers are already saying. In the meantime, inflation has reached peaks comparable to the events of the 1970s and 1980s, and the demand for goods is not being supplied by the distribution industry. “The offer is no longer able to meet the market demands and this is not a contingency, it is a physiological fact,” he stresses.

In addition to that, as the price of energy skyrockets, not only American companies are being damaged by it, but families as well. Although proposals to change from coal to gas or from oil to electricity might be a reasonable solution for the current scenario, we are way behind the agenda when it comes to the implementation of infrastructure. For Azevedo, one of the reasons why we are lagging behind in this sense is that politicians often focus too much on a short-term perspective rather than investing on infrastructure for the future.

Joao Vale e Azevedo also explains that while electrification is good for the environment, it is important to remember that the Western economy relies mostly on the car and gasoline industries. Moreover, he argues that current suggestions are relying too much on propaganda rather on active solutions, thus ignoring all the issues that come in a chain-reaction to that migration.

“We can give all the incentives in the world for the purchase of electric cars and ban petrol and diesel cars, but we must understand how to manage the millions of unemployed that will grow around the world when traditional car factories or oil refineries close,” he alerts, also mentioning the lack of tax revenue that is currently guaranteed by fuels.

In spite of that, there is still something we can do – at least, if done collectively. The chairman of KUNST Global claims that due to the past two years, people are more aware that they are part of a community, so it is this very sense of collectivity that might show us the way out. “The fact that we have had fewer opportunities for interaction has meant that we are now more aware of the value of those interactions, and probably also of human life. We are a stronger community. The challenges that await us are very difficult, but together we are much better prepared to face them,” he concludes.