Working together to secure growth for all
Felipe Calderón, president, Mexico
The response of the world’s 20 leading economies to the financial crisis prevented an even deeper global recession. Now the task is to build on this cooperation to create strong and sustainable growth in both established and emerging markets
From "The 2011 G8 Deauville Summit: New World, New Ideas." edited by John Kirton and Madeline Koch
Published by Newsdesk Media Group and the G8 Research Group, 2011
To download a low-resolution pdf, click here
The G20 has become a central forum for international economic governance. It exemplifies what we can achieve through open collaboration between emerging and developed economies. Indeed, the added value of the G20 vis-à-vis other international mechanisms has
been the inclusion of emerging economiesí interests and priorities as we deal with the most pressing global issues. The G20 has also shown the advantages of working in a forum that, rather than being constrained by excessive formalities in its decision-making process, works by building consensus. Thus, the G20 adequately reflects the indisputable reality of a multi-polar and interdependent world.
Within this framework, Mexico has played a key role as a bridge between emerging and advanced economies.
For example, Mexico has worked with other nations to strengthen the governance of the international financial institutions, restructuring member representation in order to reflect the size and influence of emerging powers. This has certainly been one of the main achievements for developing countries working with the G20.
The G20 has also proved to be a useful venue for economic coordination. The economic policy response we articulated to deal with the global financial crisis of 2008 is probably the most remarkable example of international economic cooperation in recent decades.
The economic stimulus plans adopted by G20 members helped restore confidence and liquidity in world markets, thus reducing the impact of the global recession. More significantly, macroeconomic coordination among the most important world economies proved to be the most effective way to spark global recovery.
While this recovery has been strong, it has not been equally robust in all countries and regions. This continues to be a problem even for some of the most developed economies, including Japan and European countries such as Greece, Ireland and Portugal. Some still face high unemployment, overheating or inflationary pressures, or widening fiscal deficits. As countries deal with their own challenges, it has proved difficult to agree on a common set of macroeconomic policies going forward. That is why we need to renew our commitment to achieving strong, sustainable and balanced growth together.
As we stated last November during the Seoul Summit, it is time for G20 members to work together to enhance the global economic recovery. In other words, our most pressing goal is to keep the current momentum going in order to achieve sustained global growth. I am convinced that we can do this. Certainly, it will not be an easy task, but ushering in a new period of global growth is of the utmost importance. A short-lived recovery could have severe and long-lasting consequences for the world economy.
France currently holds the G20 presidency and will be hosting its forthcoming meeting later this year in Cannes. In preparation for this summit, there are a number of issues that we must address if we are to stick to our previous commitments and lay the foundations for future growth.
First, G20 countries must put forward structural reforms to boost domestic demand and accelerate job recovery. We must deepen macroeconomic policy coordination in order to attain fiscal consolidation and adjust global imbalances. Such imbalances, reflected in the current-account balance, debt and capital flows, and private and public savings, have the potential to destabilise the world economy. This is why we must spare no effort to adopt collective policies to deal with them.
Second, we must revitalise free trade. This issue has been put on hold for too long. Keeping our markets open to trade and investment is essential to boosting global recovery and bringing about sustainable growth for all. This is why avoiding protectionism and resuming the Doha Round of trade negotiations as soon as possible is essential.
Third, it is equally important to advance the agenda of the Seoul Consensus on Development, not only because it is our moral duty to narrow the gap between rich and poor, but also because strong economic growth in all nations will lead to a sustainable global recovery. Key initiatives are considered in many areas, including infrastructure, human resources development, private investment and job creation, food security, growth with resilience, financial inclusion and knowledge-sharing, among others.
Fourth, we must continue enhancing financial regulation and supervision through comprehensive proposals that lead to more robust financial institutions and protect taxpayers. We are working to incorporate the perspective of emerging economies in reforms, strengthen regulation and oversight of shadow banking, improve market integrity and enhance consumer protection. This will help prevent future crises such as the one that brought the global financial system close to collapse in 2008.
As host of the 2011 summit, France has proposed including monetary system reform and food security in the G20 agenda. With regard to the reform of the international monetary system, Mexico and Germany are co-chairing a working group focusing on the management of capital flows and global liquidity. Its purpose is to identify ways of improving the international monetary system in order to ensure systemic stability.
In summary, our goal is to create a more transparent and effective global financial architecture that fosters equitable growth. This is our best bet; as it is often said, a rising tide lifts all boats.
As a believer in the multilateral process as the optimal way to resolve global challenges to the benefit of all, Mexico is already looking ahead to 2012, when it will assume the presidency of the G20. My government is committed to building on the successes I am sure can be achieved in France, and will propose an agenda based on the state of the world economy that reflects the growing importance of emerging countries such as our own.
As we prepare for the Mexican summit, we will actively seek the advice and opinions of countries inside and outside the G20, international organisations, the private sector, academia and civil society. We will also work with our partners to enhance the effectiveness and accountability of the G20, and bridge differences between developed and emerging economies.
As we have stated before, the goal of the G20 is an ambitious one: to set the foundations of a more equitable, transparent and fair international architecture that effectively promotes sustainable development for all humankind. To do so, we need to pursue a more ambitious agenda for the future. It is a challenge we must embrace. I am certain that the G20 can and will deliver on its promise to attain sustained global growth. As a key link between developed countries and emerging economies, Mexico will play its part in working towards this shared goal.
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