Delivering results in a changing world

Updated: 2012-10-23 08:06

By Lourdes Aranda (China Daily)

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The global economy remains vulnerable; and there are major challenges ahead. To overcome them, it is now up to G20 members to demonstrate they have the political will to implement and deliver on the commitments made by the leaders last June in Los Cabos.

The agreements made in Los Cabos cut across all the priorities that 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.

The 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 the G20 countries to policy actions that address the sovereign debt and banking crisis in the eurozone, ensure financial stability, boost demand and economic growth, reduce unemployment, continue fiscal consolidation efforts, maintain emerging market growth, and resist protectionism.

One of the key measures taken to achieve these goals is agreeing to contribute to an increase in funding to the IMF 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.

In the next decade 400 million jobs must be created simply to keep up with population growth. Young people have been hit especially hard by the crisis, and the measures that have been agreed for tackling youth employment will help us avoid condemning a whole generation to a lifetime of wasted potential and economic and social disadvantage.

International 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, an essential component in the smooth working of global value chains. In order to restore economic growth, it is also crucial to reject protectionist measures as a response to the crisis so that firms are able to compete on equal terms. Therefore the commitment to resist protectionist measures has been extended through to the end of 2014.

Progress has been made in implementing the G20 agenda to update the global financial regulatory framework, but there is still considerable work to be done to incorporate the main lessons from the crisis and to address the challenges posed by current conditions. And it is necessary to ensure 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, pension plans and remittance facilities. Financial inclusion, financial education and consumer protection initiatives were adopted at Los Cabos to address an area that has the potential to help people escape poverty.

It is an unacceptable fact that every six seconds a child dies of hunger. The lack of progress in reducing chronic malnutrition is of great concern and G20 leaders have put their support behind efforts 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. Steps have been taken to strengthen international cooperation on agricultural 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 to address climate change.

The G20 is striving to bring 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. It shows a common will to work together to find solutions to global challenges in favor of a new global financial governance. There is clear evidence that emerging markets are an important part of the solution to the economic issues facing the world today, and the G20 works because both advanced and emerging markets are represented and are willing to work together to find a way forward.

The author is vice-minister for Mexico's foreign affairs.

(China Daily 10/23/2012 page8)