Volume 1, Issue 2
G20 Bulletin: 25 October 2000.
by Aaron Gairdner
At the G-20 meeting of the world's leading industrialized countries and emerging markets in Montréal, finance ministers and central bank governors discussed the state of the world economy and globalization in all its aspects.
While finance ministers and central bank governors welcomed "continued strengthening of global economic growth" they remained "mindful of the importance of sound national economic and financial policies in building an international financial system that is less prone to crises." Regarding globalization, there was recognition that "the increasing integration of national economies resulting from the greater international mobility of goods, services, capital, people, and ideas" provides both opportunities and challenges for countries. Furthermore, although the globalization process "has deep historical roots, it has been accelerated in recent years by unprecedented technological change, the increasing universality and acceptance of market-based economic systems, and the liberalization of international trade and capital movements."
The benefits of globalization were viewed as "providing people and societies around the world with an unparalleled opportunity to achieve sustained and broad-based improvements in living standards through participation in world trade, further trade liberalization by all countries, including improved access for developing countries' exports to advanced economies' markets, access to cheaper consumption and capital goods, integration into international capital markets, and openness to technological change and innovation." Finance ministers and central bank governors further reaffirmed the view that "the economic integration that is at the heart of globalization can continue to be an enormously powerful force contributing to improving the lives of hundreds of millions of people in industrial, transition, and developing countries alike, giving them greater access to goods, capital and ideas - and thus a much greater capacity to achieve rapid and enduring growth in the living standards of their citizens, and to attack income inequalities and reduce poverty."
The challenges of globalization, on the other hand, were viewed as the "rise to economic difficulties and social dislocations." Finance ministers and central bank governors stressed that "governments have an important role to play in formulating and implementing policies to promote financial and economic stability and harness the benefits of globalization." They noted "that putting in place the right frameworks and policies for promoting a globalization process that works well for all of its participants will be the key challenge for the international community in the 21st century."
More specifically, G-20 finance ministers and central bank governors committed themselves to: (1) further improve the effectiveness of international institutions; (2) implement the emerging international consensus on policies to reduce countries' vulnerability to financial crises; (3) improve integration into the globalized financial world; (4) create more favourable conditions for the integration of heavily indebted poor countries into the global economy; (5) strengthen efforts to combat financial abuse, including money laundering, tax evasion, and corruption; (6) contribute to international efforts to increase the provision of other global public goods to address serious issues such as infectious disease, agricultural research, and the environment; (7) support continued efforts by the WTO to build consensus toward further multilateral trade liberalization and strengthening of trade rules; (8) promote the design and effective implementation of "social safety nets"; (9) ensure that efforts take account of a diversity of perspectives.
The G-20 chair, Paul Martin, noted that the 2000 meeting of finance ministers and central bank governors was "unique" because their free-flowing dialogue "dealt with areas that have not been the usual subject of discussion among finance ministers and central bank governors." This was a recognition that financial issues and global issues such as the environment are intricately linked in what Martin labelled the "Montréal Consensus." In summary, the G-20 seriously engaged the difficult subject of globalization, albeit on a simplified and general level. However, the G-20 has pioneered a significantly broader agenda far beyond financial management, likely laying the foundation for an enhanced G-20 role in global governance. The potential of this increased global role is ideally suited to the G-20's small membership and its representative quality.
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