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World Bodies: Follow WTO principles for more global financial governance

17
Nov '08
The Chambers of Commerce of the G20 countries are deeply concerned about the current economic crisis, the effects of which are now being felt across the global economy.

The crisis has brought global stock markets to the levels of several years ago and world growth is currently projected to hover around 3.9% in 2008 and at barely 3% in 2009, with growth forecasts which are expected to be revised further down. The world will also witness a reduction of inflationary pressures due to temporarily lower commodity prices, declining potential growth and reduced demand.

But for us, this is very welcome as inflation hits the poor most in the developing countries. In a context of economic recession, policy makers should pay adequate attention to potential deflationary pressures in the short-to-medium term. It is clear that the financial crisis will hit developed as well as emerging economies. Nobody will be unaffected.

The signatory parties attach great importance to the G20 meeting which will take place in Washington on 15 November. This meeting must be followed by a series of international summits to be convened in the early months of 2009 with the aim of not only restructuring the global financial system but also bringing back stability to it; restoring confidence in financial markets and alleviating as much as possible the effects of the financial crisis on the real economy. In this context, we expect the summit on 15 November not only to give a strong sign of political coordination and unity, but to come up with concrete proposals to tackle all abovementioned issues.

The G20 proposals should aim at strengthening supervisory structures at national and supranational level, at enhancing cooperation between developed and emerging economies with the aim of reducing global economic, monetary and trade imbalances. The quality of regulatory standards should be improved in the framework of a broad reform of the global financial system that must also include a higher degree of financial and macroeconomic surveillance and improved crisis prevention mechanisms, as well as early warning systems. It is important that banks are still able to lend to businesses.

At institutional level, the role, activities, set-up and composition of the IMF, the World Bank and the Financial Stability Forum should be carefully assessed in the light of the current crisis and the global financial and economic developments of recent years. In this context, significant emerging economies should be invited to sit together with developed economies on a permanent basis in international economic and financial fora.

Last but not least, we expect the G20 leaders to come up with a global economic roadmap to protect the real economy as much as possible, especially with regards to rebuilding confidence in the financial institutions, to support the business and investment capacity of small entrepreneurs by securing their access to finance, and help stimulate growth with economic and fiscal incentives. In this framework, we insist on respecting the role of the private sector and transparent competition, while drawing the lessons of the recent financial crisis.


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