The G20: maintaining the spirit of cooperation
Felipe Calderón, president, Mexico
The G20 was successful at setting a framework for reviving the global economy during the 2008 crisis and must show the same commitment and togetherness in creating its strategy for dealing with an equally challenging situation today
From "The G20 Cannes Summit 2011: A New Way Forward," edited by John Kirton and Madeline Koch,
published by Newsdesk Media Group and the G20 Research Group, 2011
To download a low-resolution pdf, click here.
It has been more than three years since the world was on the brink of economic and financial collapse. The 2008 global crisis prompted leaders of the G20 to commit to make every effort to avoid a global economic meltdown. Since then, the G20 has emerged as a more inclusive forum that brings together developed and emerging economies, and has become a group in which economic decision-makers can foster international coordination in a complex and interdependent global economy.
The unprecedented economic stimulus plan that was instrumented by the G20 to address the 2008 crisis included trillions of dollars that restored confidence and liquidity to global financial markets, prevented the collapse of global demand, saved millions of jobs and set the basis for global recovery. The G20 created a framework for promoting strong, sustainable and balanced growth. It also created the Mutual Assessment Process to monitor and coordinate domestic economic policies in order to prevent and gradually correct global imbalances, accelerate the recovery in jobs and, in general, produce a macroeconomic setting aimed at stimulating global recovery.
The G20 also played a central role in reforming the World Bank and the International Monetary Fund to better reflect the changes in the world economy. It endowed them with enough resources to help countries facing economic turmoil and enhance their management structures.
Despite the initial success of the G20 in setting the framework for recovery, recent events have shown that the global economic outlook remains challenging. Public deficits are too high in many developed countries, while job creation rates show no improvement. Stock markets have experienced sharp volatility since early August, due to concerns about the effect of fiscal problems in developed countries on the international financial system, particularly in Europe. Expectations have turned gloomy due to the difficulties that some leaders are having in designing credible and effective solutions to this challenge.
Once again the world economy seems to be at a critical juncture. There are a number of issues that G20 members must address to avoid a new recession that could have long-lasting consequences.
First, we need to stick together in the spirit of unity and solidarity that characterised the creation of the G20. We have to focus on our common resolve to face the current situation and embrace once again our original vision of global cooperation.
Second, we need to act urgently and boldly, through a targeted mix of fiscal, monetary and exchange-rate policies to restore confidence in financial markets, keep liquidity flowing and promote growth.
All G20 economies must commit to fiscal sustainability. Some countries need to start this process urgently, while others can afford to implement medium- or long-term plans, but we must all walk this path sooner rather than later.
Another crucial point is that we must all keep our economies open to trade. During the 2008-09 crisis, countries that kept a true commitment to free trade, such as Mexico, resumed growth more rapidly than those that insisted on protectionism. This time, the risk of a deeper global recession makes defending free trade even more important.
Third, we need to explain our views and strategies, and we need to listen to what civil society has to say. Our universities, our business communities, our young people, our non-governmental organisations, all of them have interesting things to say about what we have done so far and what we could do. The same goes for countries outside the G20, to whose proposals and viewpoints we must pay attention.
For all these reasons we should prepare the ground for a successful G20 summit in France in November.
We will have to send a message of unity, we will have to act and we will have to listen. France has proposed a number of important initiatives and, on that basis, we are working together to reach broad agreement. We will deliver in Cannes. I am certain the G20 will be up to this new challenge.
The G20 has proved its worth. Current global problems demand creative and innovative solutions. Global governance today entails further interdependence and collaboration on an equal footing between developing and developed countries.
In 2012, as president of the G20, Mexico will welcome member economies for the seventh summit. Finding ways to strong, sustainable and balanced growth will continue to be the top priority. The challenges of improving international economic cooperation are very significant, and Mexico will do its best to promote a strong and successful G20 meeting. A flourishing G20 means robust growth for the world economy. It means more jobs, opportunities and wellbeing. This is what we need. And this is what Mexico will work for, with all its determination.
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