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Recovery and New Beginnings
By the Right Honourable Stephen Harper, Prime Minister of Canada
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The Canadian summits will focus on ensuring results on the commitments that have already been made.
Accountability is critical to the success of the G8 and G20
The theme for Canada’s 2010 summits is “recovery and new beginnings”. At both the G20 and G8, Canada will act to facilitate global leadership on the challenges of an interdependent world. Our approach will centre on the concept of enlightened sovereignty. Although the worst of the crisis may be behind us, leaders must continue to accept shared responsibility, especially for the state of the globalised economy. We must come together in a spirit less about narrow self-interest in sovereignty’s name than an expanded view of mutual interest in which there is room for all to grow and prosper. Enlightened sovereignty, then, is the natural extension of enlightened self-interest.
The discussions in Toronto and Muskoka will focus less on seeking lofty new agreements than on ensuring results on commitments already made. We know that determination and follow-through are essential to achieving results. If the summits are to be truly successful, then this sense of accountability is critical on the part of all G8 and G20 members.
We have no choice but for the G20 to be successful. While the market’s awesome power to generate and widely distribute wealth is self-evident, we also know markets need governance. For the new global economy, the G20 is what we have.
Now, as we work through the final stages of recession and embrace recovery, there are four critical areas where G20 actions have been and will remain vital: financial sector reform, stimulus programmes, reform of international institutions, and global trade and growth strategies.
Let me begin with reform of financial sector regulation.
As many of you know, Canada was not a part of the problem. No major Canadian financial institutions failed and none required bailouts from the government. As a consequence, Canada now has one of the largest banking sectors in the world, and it is entirely in the private sector.
The World Economic Forum and, more recently, Moody’s Investors Service both ranked Canada’s banks as the world’s soundest. The performance of the sector during this crisis showcased the effectiveness of Canada’s approach. Thus, we want to urge the adoption of similar regulatory practices globally.
Inadequate national systems need to be restructured and should be subject to international peer review in order to enhance transparency and reduce risks to the global economy. Anything less would expose every economy to needless risk and potential contagion.
Through the G20, we will be encouraging this strengthened financial sector regulation and improved coordination between regulators. But Canada will not go down the path of excessive, arbitrary or punitive regulation of its financial sector.
The second ongoing G20 policy priority has been to drive globally coordinated stimulus measures, both monetary and fiscal. We believe it is important to stay the course for now, but with an important caveat.
Fiscal expansion, enhanced government spending and increased deficits were necessary during the recession. In fact, with rapidly falling output and employment and interest rates near zero, economic theory was clear
– this was the only option. However, recent events are highlighting the real risks to highly indebted countries that lack exit strategies from large budgetary deficits.
This view informs our own economic planning. Canada will complete its two-year Economic Action Plan, its fiscal stimulus measures, in support of its economy. We shall faithfully meet all promises made at earlier G20 meetings. We also have laid out a gradual but clear plan to return to fiscal balance in the mid term. Our situation is obviously enhanced by relatively modest debt and deficit levels, even during the sharp contraction of 2009.
More broadly speaking, it behoves the G20 to make progress on the Framework for Strong, Sustainable and Balanced Growth agreed to in principle in Pittsburgh. We must look behind the current crisis and address the underlying imbalances that have contributed to it.
Likewise, G20 members need to ensure that international financial institutions, such as the International Monetary Fund, the World Bank and multilateral development banks, are key underpinnings of global growth and stability. We need to fulfil our commitment to enhance the voice and representation of dynamic emerging markets and developing economies at these institutions, in order to increase their legitimacy, credibility and effectiveness.
Finally, let us talk about global trade and growth strategies. Growth in global trade has been largely responsible for wealth creation worldwide in the past generation. Enhancing trade and resisting protectionism are both essential to the world economy, and to the just cause of raising millions from poverty. The G20 has said this at every meeting.
Of course, there have also been national actions that detract from this goal. Even so, we have thus far avoided anything like the protectionism that turned the stockmarket crash of 1929 into a decade-long depression.
In Canada, we have tried to be leaders in promoting free trade and open markets. Our stimulus package did not raise tariffs. In fact, it lowered them unilaterally, making Canada a tariff-free zone for manufacturing. Since 2006, we have concluded free trade agreements with eight additional countries and we are engaged in six other negotiations, including with the European Union. We will continue to resist protectionism and work to reduce or eliminate tariff barriers.
Our ambition – the necessary condition for success as the G20 moves forward – must be a shared belief that the rising tide of recovery must lift all boats, not just some. This is the exercise of sovereignty at its most enlightened. It is not, fundamentally, about the structure of global institutions. It is more a matter of attitude. It doesn’t matter what global structures we devise for our mutual betterment, if we don’t have global attitudes, they will not work.
With the G20 necessarily focussed on the economy, there remains an important role for the Group of Eight nations. Developed, allied countries with close values can still accomplish much in promoting democracy, development, peace and security.
In this troubled world, we clearly recognise how much there is in these areas that requires international cooperation. Terrorism threatens all of us. Piracy has returned to strategic seaways. Climate change disproportionately threatens the peoples least capable of adapting to it. And although tensions between the older nuclear states have largely dissipated, the spread of nuclear weapons to new actors, especially non-state ones, is a serious concern.
These complex, daunting threats cannot be met by any one country working alone. The G8 together must show leadership. Maternal and child health is one area where we can do just that.
Did you know that every year more than half a million women die in pregnancy and nearly nine million children die before their fifth birthday?
Far too many lives and futures have been lost. And to the world’s shame, so many have been lost for want of relatively simple health solutions, all well within reach of the international community. Often the keys of life are no more sophisticated than clean water or the most basic treatment against infection.
As president of the G8, Canada will champion an initiative to increase the number of healthy pregnancies, healthy mothers and healthy children. This involves a wide range of interventions across the continuum of care, including training and support for frontline health workers; better nutrition and provision of micronutrients; treatment and prevention of diseases such as pneumonia, diarrhoea, malaria and sepsis; screening and treatment for sexually transmitted diseases, including HIV/AIDS; proper medication; family planning; immunization; clean water and sanitation.
In conclusion, the G20 and G8 meetings have before them a huge agenda, all to be addressed in an atmosphere of ongoing global economic and financial uncertainty. We must bring to the table the belief that the solutions are the collective responsibility of all participants. We must be pragmatic, focussed and, above all, encourage accountability for our actions.
As host of the G8 and G20 meetings this June, Canada will use its leadership role to focus on these key challenges. I look forward to collaborating closely with our international partners as we continue to support the economic recovery and chart new beginnings for humanity worldwide.
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