Meeting goals in a changing worldThe global economy remains vulnerable; major challenges loom over us. To overcome them, it is now up to Group of 20 members to demonstrate they have the political will to implement and deliver on the commitments made by the leaders last June in Los Cabos, past the halfway point of the Mexican G-20 presidency.
The agreements made in Los Cabos cut across all the priorities Mexico has championed during its presidency: to restore economic stability and growth; to strengthen the financial system and expand financial inclusion; to improve the global financial architecture; to enhance food security and address commodity price volatility; and to promote sustainable development, green growth and the fight against climate change.
Our chief priority has been to stabilize the global economy and implement structural reform as foundations for growth and employment. The Los Cabos Growth and Jobs Action Plan commits us to focusing our policy actions on addressing the sovereign debt and banking crisis in the euro area, ensuring financial stability, boosting demand and economic growth, reducing unemployment, continuing fiscal consolidation efforts, maintaining emerging market growth and resisting protectionism.
One of the key steps we have taken to achieve these goals is agreeing to contribute to an increase in funding to the International Monetary Fund to the tune of more than $450 billion. This gives a clear signal to markets that the international community stands ready to support those economies that have suffered as a result of the crisis, and that we are committed to helping them back onto the path of growth.
Our actions matter because of the impact they have on our citizens’ lives, particularly with regard to employment opportunities: 400 million jobs must be created in the next decade simply to keep up with population growth. Our young people have been especially hard hit by the crisis, and the measures we have agreed on for tackling youth employment will help us to avoid condemning a whole generation to a lifetime of wasted potential and economic and social disadvantage.
Trade is also clearly part of the solution for restoring economic growth and creating jobs. Trade negotiators have been instructed to explore outcomes in trade facilitation, which is an essential component in the smooth working of global value chains, something that has become increasingly important to the way we do business. In order to restore economic growth, it is also crucial to reject protectionist measures as a response to the crisis so firms are able to compete on equal terms.
We have made progress in implementing the G-20 agenda to update the global financial regulatory framework, but there is still considerable work to do to incorporate the main lessons from the crisis and to address the challenges posed by current conditions. We also need to ensure that developing countries are not inadvertently damaged by financial stability regulations, such as by limiting access to financial services. Linked to this is the issue of financial inclusion. Around the world, 2.7 billion adults still do not have access to basic financial products such as savings accounts, loans, insurance, payments systems, pension plans and remittance facilities. In Los Cabos, we therefore adopted initiatives on financial inclusion, financial education and consumer protection to address an area that has the potential to make a tremendous difference to the well-being of millions of people by helping them move out of poverty.
We are also still living in a world where every six seconds a child dies of hunger. The lack of progress in reducing chronic malnutrition is of great concern and G-20 leaders have put their support behind efforts under way to improve global nutrition. By 2050, agricultural production will need to increase by an estimated 70 percent to feed the 9 billion people we will have on the planet. This will be impossible without further responsible and sustainable investment in agriculture and measures to ensure that commodity markets operate transparently and efficiently. We have therefore taken steps toward ensuring progress in these areas, including strengthening international cooperation on innovation, technology transfer, and research and development.
To achieve our development and economic goals, while still protecting the environment and improving social well-being, we need to start thinking in terms of “green growth.” Several of the commitments made in Los Cabos were specifically designed to address this issue: spanning structural reforms, urban transportation, energy, agriculture, eliminating fossil fuel subsidies and financing options.
Mexico is honored to be part of a forum that seeks to enhance international cooperation and coordination to face the current global challenges through engaging in dialogue, including with the business community, labor organizations, academics, young people and NGOs. We have clear evidence that emerging markets are an important part of the solution to the economic issues facing the world today; the G-20 works because both advanced and emerging markets are represented and are willing to work together to find a way forward.
It is important to underscore that the G-20 is not just the annual summit: the hard work that has taken place during the first half of Mexico’s presidency included meetings of G-20 finance, trade, labor and foreign ministers, agriculture vice-ministers and the G-20 groups such as the Task Force on Employment and the Development Working Group.
The G-20 strives for stability in these times of global change. The Los Cabos Declaration and Action Plan defines clear economic and financial commitments for each country in order to improve the world’s situation and have an impact on future generations. Furthermore, it shows our ability to work together to find solutions to global challenges in favor of a new global financial governance.
* The author is vice minister of foreign affairs of Mexico and current “sherpa” to the Group of 20.
by Lourdes Aranda