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For individuals, institutions, governments, and countries, adaptability is the key to successfully navigating through periods of change. That’s a lesson Thunderbird alumnus and President of the Inter-American Development Bank, Luis Moreno, has experienced throughout his life and career.
Moreno was elected President of the Inter-American Development Bank (IDB) in 2005, in what he called “a very positive moment of growth and economic development around the world.” It was a time of great transformation, due in large part to an increase in technological advancements and the awareness of climate change. In order to meet the demands of this rapidly changing world, Moreno and his team had to adapt the bank’s goals and strategies.
Three years later, the financial crisis hit, and everything changed – requiring further adaptation. While the crisis was less severe for many countries in Latin America, it still had a large and lasting impact. The biggest consequence was an overall slowdown in growth.
This year – Moreno’s last as IDB President – the bank faced another monumental hurdle: the COVID-19 pandemic. Coming into the pandemic, Latin America already had what Moreno called “preexisting conditions – high fiscal deficits, current account deficits, inflation, and more importantly, slow growth.”
But because adaptability has been part of the IDB’s DNA, it has been easier to navigate through this very challenging global experience. Moreno said, “It is truly the quality and adaptability of our staff that is our biggest asset. They have embraced the challenges of the pandemic and as we search for creative solutions to the challenges of COVID-19, we're much more fit for purpose.”
“All over the world people are challenged with: ‘Do I go out and work and risk getting this disease, or do I starve?’ This is a set of very stark choices.” – Click to Tweet
With COVID-19, one of the key areas for adaptability is figuring out how to balance health and safety with economics. As the number of coronavirus cases increases, so does debt, unemployment, and poverty. Moreno explained, “The U.S. could end up having 20-25% unemployment, which is shocking. Countries in Europe are projecting negative growth of close to 8%. And in Latin America, we’re projecting negative 2% (best case) to negative 6% (worst case).”
“We need to develop a plan to preserve jobs, give governments more fiscal space to spend on recovery, and help small businesses to survive these very challenging times,” Moreno said. Without sacrificing citizens’ health and safety. He continued, “It's a false dilemma to think that you can make a choice on the health of your citizens over the health of your economy or the other way around.” However, in many countries, “people are dealing with the challenge of ‘Do I go out and work and risk getting this disease, or do I starve?’ This is a set of very stark choices.”
“You have to take care of the health of your citizens and the health of your economy. It's a false dilemma to think that you can make a choice on either of the two. – Click to Tweet
One key differentiator for countries that have been able to achieve the balance is how quickly they were able to adapt. In El Salvador, for instance, before there was even one case of coronavirus, the president made the decision to require a lockdown. The government gave a 90-day tax and utility payment holiday and created a set of rules and restrictions to prevent the spread of the disease. Countries like Brazil, on the other hand, responded much later. And the results show it: Brazil has 8 times as many cases as El Salvador (relative to each country’s population) and a 1.2% higher death rate among patients affected by COVID-19.
“Set your goals high, look forward, and be unafraid.” – Click to Tweet
Moreno said that while he recognizes this period is going to be very challenging, he also believes it’s an opportunity for humanity to come together and for individuals, institutions, governments, and countries to redesign our future. “If history teaches us anything, it is that the greatest innovations and the greatest changes have come during times of tremendous human stresses.”
“The greatest innovations and the greatest change have come during times of tremendous human stresses.” – Click to Tweet
“The rule book for this new age is not written,” Moreno said. “But my father always told me, ‘Do whatever you want, but whatever you do, strive to do your best.’ And perhaps it's a very simplistic way, but it's always been my guiding principle. You can always make a difference in whatever you do, whatever chances and challenges life gives you, but you have to remember every day that you can do better.”
“This is a tough moment for all human beings but be unafraid to deal with the many challenges that come,” Moreno urged global leaders. “The more fascinating challenges that come to you are the ones that are the least expected. We're defined in our lives not by what we do every day, but by how we react to difficulties like this one. This is what truly defines us. Set your goals high, look forward, and be unafraid.”