PRESS ROOM

• SPEECHES
• INTERVIEWS
• PRESS CONFERENCES
• PRESS RELEASES
• LATEST NEWS

Print | Send

Washington D.C.Press Statement by Mexican President Felipe Calderón in this city
Good afternoon, members of the media.
I
am going to give you a very brief summary of the results of the G-20
Meeting, but since I understand you did not have acces to the audio or
video of the meting, I am going to repeat the speech I gave at one of
the meetings. There were several speeches, copies of which will be
handed out later.
I said:
Heads of State and Government.
Friends:
At
the beginning of the 21st century, we are experiencing a global crisis
and the only way to deal with it is through global solutions.
There are three main causes of the crisis:
First.
A long period of growing global economic imbalances that led to excess
liquidity, a greater appetite for assets and increasingly great risk
taking on the part of investors.
Second. Lax regulation and supervision of the financial system, based on the false premise of self-regulation.
And
third. The limited capacity of international financial organizations to
effective supervise the health of the world financial system.
It is
important to stress that the crisis did not originate in developing
countries. On the contrary, the dynamism of the global economy has been
sustained by the vitality of the emerging economies.
It is crucial
to implement determined, immediate actions to be able to break the
negative spiral of uncertainty, and in this respect, Mexico proposes
four main actions.
First. Containing the financial crisis.
Second. Adopting contracyclical economic policies in a coordinated fashion.
Third. Reforming national and international financial institutions.
And fourth. Preventing a new era of protectionism.
Regarding
the first measure, I insist that we need to take measures that will
guarantee the containment of the financial crisis and minimize its
impact on the world economy, thereby preventing its spread.
Developed
nations could develop the processes and measures implemented to
stabilize their financial markets and prevent financial policies for
harming other economies by awarding broad or indiscriminate government
guarantees to all kinds of financial liabilities.
Second. All
countries, particularly developed countries, must adopt wide-reaching
fiscal policies in a coordinated fashion to obtain the best possible
synergies. This would offset the fall in consumption and private
investment that has recently been observed.
The best way to overcome
the crisis is to maintain our economic growth. In Mexico, we are using
all available instruments to implement contra-cyclical policies, at
least in the fiscal and financial spheres.
We have used the
Development Bank to offset the reduction of available external funds
for our economy and we have provided sufficient liquidity for the
financial system and the firms that require this.
We have boosted
public spending, especially on infrastructure projects and reinforced
the network of protection and social security to protect the income of
the families with least from deteriorating and prevent poverty from
increasing as a result of the crisis.
At the same time, we have
maintained health public finances and a macroeconomic balance, as a
result of the reforms of both the government employees' pension system
and taxes.
Third, we have proposed a reform of national and
international financial systems. Both developed and emerging countries
must carefully review the regulation of financial systems.
Discussion forums must be more inclusive, because they are almost exclusively dominated by developed nations.
That
is why Mexico proposes including emerging countries as members of the
Financial Stability Forum and eventually having the International
Monetary Fund resume its leadership of this debate, in view of its
universal membership.
It also proposes undertaking additional
reforms of the governing boards of multilateral financial institutions,
given the increasing importance of emerging nations in the global
economy.
It also proposes reinforcing the International Monetary
Fund to enable it to undertake an impartial review of the international
financial system, in order to identify any systemic problem it may have
in a timely fashion, not only in developing but also in developed
countries.
We also propose greater effectiveness and flexibility in
financial institutions, such as the World Bank or regional development
banks, such as the Inter-American Bank, since there is an urgent need
for greater speed and flexibility in providing loans for developing
countries, due to the sudden reduction in the flow of private credits.
Fourth.
Lastly, we must prevent the resurgence of protectionism at any cost. It
is essential for our countries to promote confidence in the
international commercial system and prevent tariff increases. It is
also essential for us to promote the completion of the Doha Round
Negotiations, within the framework of the World Trade Organization.
Ladies and Gentlemen:
The
invisible hand failed and it is now up to the visible hand of the state
to correct inequalities and imbalances and especially to reactivate the
economy through contra-cyclical policies that will prevent recession.
This
does not means that the market economy is dead or that the global
economy is over. Now, more than ever, we need more market and more
global economy, more trade and more global investment.
There is also obviously a global need for faster actions and more efficient regulation with better aligned economic incentives.
Coordinated
actions must not only resolve technical needs to reactivate the economy
but people must also see sufficiently clear leadership in their
representatives to feel that their is a firm hand at the helm in the
midst of the storm. This will enable countries and economic actors to
recover their confidence in themselves and in the future because
distrust is one of the main causes that has paralyzed our economies.
Restoring
faith in the financial system and the capacity for response of
governments and multinational institutions will reduce panic and enable
us to return to the path of stability and growth.
What the world
requires of its leaders at this moment is to make the leap from words
to actions, which is why Mexico has embraced this effort and urges
other countries to continue working to achieve a global response to a
global crisis.
I will now move on to the summary of the declaration
which was eventually negotiated, voted on and approved within the
framework of this G-20 Summit.
It is worth noting that the meeting
was convened in the midst of a severe global economic crisis, whose
solution requires the coordinated action of all countries.
As leaders, we reflected on the causes that led to this situation and the immediate measures we are taking to cope with it.
Most of our discussions focused on the actions we must adopt to pull through this crisis.
The declaration and plan of action that were approved include the following actions:
Firstly
Stabilize financial markets and reactivate economic activity, in
addition to establishing a reform plan to correct financial systems and
redefine the architecture of international financial organizations.
We
decided to boost international coordination within the sphere of
macroeconomic policies as a means of reversing the recessive trends of
the world economy.
We also pointed out the important of offsetting
the effects of the crisis on financial markets and the real economy of
developed and emerging countries.
We therefore underlined the need
to adopt special measures to enable the economies of emerging countries
to continue to have access to the resources of international financing
funds, to the extent that they need.
We decided to review the
regulatory and monitoring framework governing financial institutions in
order to make them more transparent and to strengthen accountability
mechanisms to achieve greater control that will prevent future crises
without reducing the dynamism of these markets.
A fundamental
agreement I would like to stress is the commitment to reform the
institutions that resulted from Bretton Woods, such as the Financial
Stability Forum, so that they will adequately reflect the new realities
of the world economy, particularly the specific importance of emerging
countries such as Mexico.
We leaders acknowledged the fact that any
solution to this crisis must be based on economic liberalization and
free trade. We therefore agreed on a 12-month moratorium on the
imposition of new barriers to trade and investment and pledged to
redouble efforts to conclude the Doha Round negotiations before the end
of the year.
Lastly, in order to achieve these goals, we adopted a
plan of action consisting of approximately 50 key measures that must be
implemented over the next few days and in the medium term.
In order
to follow up the implementation of these agreements, we decided that
the G-20 leaders must meet up again before April 30 2009.
As a final
reflection on the Summit, I can say that it is quite clear that we
cannot act in an isolated fashion in the face of a crisis of this size
which requires a firm, timely, global response.
This juncture
revealed the need to act in a coordinated fashion and showed the need
for more determined, effective action on the part of the state, as we
said at the meeting.
These agreements, the Declaration and the Plan
of Action are, in my view, an excellent starting point, not only to
cope with the prevailing economic situations but also to redesign and
transform the international financial system in the medium and long
term.