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Mexico's vision of innovation and cooperation
at the Los Cabos Summit

Felipe Calderón, president, Mexico

From "The G20 Mexico Summit 2012: The Quest for Growth and Stability,"
edited by John Kirton and Madeline Koch, published by Newsdesk Media Group and the G20 Research Group, 2012
To download a low-resolution pdf, click here.

We must find fresh approaches to stimulate global trade while ensuring financial inclusion and food security in developing countries

Since Mexico took over the presidency of the G20 on 1 December 2011, the global economy has continued to face a number of challenges. The temptations that are facing leaders in the context of the current crisis are many: resorting to protectionist measures, failing to take bold action on medium-and longer-term issues, and focusing on the domestic sphere at the expense of global well-being, among others. However, I believe that the G20 is the best forum for encouraging countries to maintain an international, cooperative outlook, even in the most difficult of situations. I know that leaders will arrive in Los Cabos armed with the courage, ambition and creativity required to put the global economy back on the path to sustained long-term growth and to create a fairer and more prosperous world for developed and developing countries alike.

Economic stabilisation – complemented by structural reforms to stimulate growth and employment – must remain one of our key priorities. That was the strategy we followed in Latin America after the crises of the 1980s and 90s, and it has led to the region being in a much stronger economic position today. Learning from these experiences, I look forward to seeing leaders at Los Cabos agreeing on an enhanced action plan that encourages member countries to swiftly implement previous commitments and to carry out further concrete actions to correct macroeconomic imbalances and stimulate growth. It remains crucial to avoid protectionist measures and, instead, to foster international trade. The progress made at the ministerial conference of the World Trade Organization (WTO) in December 2011 was very encouraging, and I look forward to Russia’s entry, as well as to the implementation of measures to help the least developed countries join the WTO. In the absence of agreement on the Doha Development Round, we must continue to find fresh, credible approaches to stimulate global trade.

Following the financial crisis of 2008-09, the G20 and the Financial Stability Board (FSB) have done a great deal of work to formulate policies that will help strengthen financial stability. This year we have moved to the implementation phase in many areas. At the Los Cabos Summit we will review the progress report on previous G20 recommendations, including derivatives reforms, resolution regimes and compensation practices. We will also discuss recommendations on regulating other areas of the financial sector, such as shadow banking, in order to help avoid future crises.

Financial stability

As the first Latin American country to hold the presidency of the G20, Mexico is committed to reflecting the concerns of emerging economies on our agenda. With regard to financial stability measures, it is important to strike a balance between the implementation of agreements such as Basel III and the need for the global banking system to continue to play a major role in the development of emerging economies. We have also been keen to focus on financial inclusion. Although this is not generally an issue of interest for advanced economies, it is of great importance for the development agenda. It could make a tremendous difference to the well-being of millions of people, giving them greater security and life opportunities. At the summit, I am certain we can agree on measures to advance financial education, consumer protection and access to financial products.

We have also emphasised the need to strengthen the international financial architecture; we have worked hard to make progress on creating a robust global financial firewall. We celebrate the agreement reached recently to strengthen the finances of the International Monetary Fund (IMF). Now, we should continue with this effort and reinforce the ability of this international financial institution to respond effectively to global crises. To achieve this goal, a key element is to enhance the voice and representation of emerging markets and developing countries. The G20 will also continue its work to strengthen the IMF’s surveillance framework, ensuring more effective integration of bilateral and multilateral surveillance.

Finally, we look forward to the implementation of the action plan to foster the development and deepening of local currency bond markets, so that emerging economies are better able to deal with negative shocks.

Sustainable development

Another priority of the Mexican presidency of the G20 is food security. The poorest households allocate half of their income to food. However, food prices have more than doubled in the past decade, and this alone has led to a dramatic increase in global poverty. This is the reason why Mexico has worked hard to foster compliance with the commitments set out in the Cannes Action Plan on Food Price Volatility and Agriculture. We would like to see agreement at the Los Cabos Summit to strengthen international cooperation on agricultural innovation, technology transfers, and research and development. We also need to advance in the incorporation of sustainability criteria into agricultural practices. And we need to address the issue of financial speculation and its impact on food prices. It is vital that we commit to put an end to hunger; famine is unacceptable in today’s world, and we must ensure that there is no repeat of what happened in the Horn of Africa in 2011.

Mexico is also well aware that the potential consequences of climate change in the coming decades are such that many of our current concerns about the world economic crisis will seem superfluous in comparison. Climate change is affecting the whole planet. Each country must do its part under the principle of common but differentiated responsibilities. At Los Cabos, I am certain that we will have the opportunity to make progress on green growth policies, the phase-out of inefficient fossil fuel subsidies, and the Green Climate Fund. We must succeed in designing tools that enable developing countries to boost their technical and institutional capacities, in order to implement policies that achieve sustainable development, compatible

with economic growth and poverty reduction. We will also aim to provide countries with policy options to insert green growth strategies into their structural reform agendas. Furthermore, we will promote disaster risk management as a policy tool of crucial importance for economic stability.

Clearly, this is an ambitious agenda, which can only be achieved through the efforts of all G20 member countries. However, I believe that at this crucial moment, my fellow leaders will come together in a spirit of cooperation. Only by working together will we be able to achieve prosperity, security and justice for the generations of today and those of tomorrow as well.

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