The G20 saved the global economy (Canadian PM Harper)
G20 Summit, September 24 and September 25, 2009 in Pittsburgh, Pennsylvania (USA)
Canadian Prime Minister Stephen Harper speaking at the press conference, Sept. 25 2009
You asked me a question, one that has been asked before. I remember being asked this question in Washington, and again in London. The question is: What is there today that will make a difference in people’s lives? Let me take you back to Washington. After that, in London, the world was facing a catastrophe. Financial markets, not just stock markets, were falling at a precipitous rate. We were witnessing a collapse of financial institutions unlike anything since the 1929-1930s.
Leaders came together to coordinate action plans to deal with this crisis. As a result, we stabilized the financial sector. Yes, there has been a significant rise in unemployment and a fall in production, but it is nothing compared to what we saw during the 1930s. Less than a year later, we are seeing signs of growth. These signs are fragile, and we must be cautious. We have experienced unemployment, but not the kind of crisis that was taking shape earlier this year. It was a crisis so dramatic in terms of the international community, the world economy, its potential effect on trade, and even internal stability and peace. Much of this has been largely avoided.
We are in a serious recession, but we do not have anything resembling a depression. We haven’t seen the kind of global instability that was emerging in the early part of this year. The action plans put together by leaders have been very effective, despite their faults. We haven’t lived up to every commitment, and there has been some slippage in broad statements about protectionism. However, if we compare this to the trade wars we were facing a year ago, we have made significant progress.
For the first time in history, we managed to get all the leaders of the major economies in one room and get them to work towards the collective interest of the world economy. As a result, we have seen a very different outcome this time. We still have a lot of work ahead of us, but the achievement here is truly historic. We are continuing to act upon coordinated policies and, in this declaration, we have set principles for better global economic governance.
I am a big supporter of open markets and the market system. However, as an economic historian, I know that open markets are not the same as uncovered markets. Uncovered markets, particularly in the financial sector, can lead to wild swings, as we have seen. Leaders have now established a framework for global governance, not a world government, but sensible governance. If these measures are enacted and we continue with the G20 process, we will achieve the stability and transparency needed in markets. This will give us the benefits of a globalized market economy without the enormous risks experienced in recent years.
Without getting into the specifics, I believe the achievement here is historic. We are not out of the woods regarding the recession, and we still have work to do. We are not yet at the point where we have a genuine system of governance where major economies think collectively. However, we are moving in the right direction, and there is growing recognition of this.
What I have seen in the past year is more countries around the table thinking globally. They understand that focusing solely on national interests won’t solve our problems. Leaders, particularly from major countries like the United States and China, are thinking more systemically, which is necessary.
David Lagering from Reuters asked about the G8’s faults and its advantages as a smaller group. Canada is now part of a larger, more rambunctious group, and there is a concern that Canada’s voice might be diluted. How do we address this? Under your chairmanship next year, could we see an end to the G7 finance ministers’ meetings, or will they continue despite the G20’s prominence?
I wouldn’t want to get into specifics about what will continue and what won’t, as these details haven’t been worked out. Canada and other countries still see the G8 as valuable. The G8 is not just a smaller group; it is a group with a greater set of shared values and experiences. It remains influential on major international economic issues and has broader discussions on development assistance, humanitarian aid, and international peace and security. The G8 provides intimacy that allows for a different kind of discussion than a larger forum like the G20.
The division of labor between the G8 and G20 is yet to be determined. After the G20 summit, I immediately sat down with the South Koreans to coordinate the G8 and G20 going forward. We aim to define the appropriate roles for these groups over the next year.
Regarding Canada’s voice and role, it would be unrealistic to deny that being one of 20 instead of one of eight changes the dynamic. However, Canada is in a unique position. We are a major developed country that no one blames for the current crisis. Our policies are seen as solutions, not problems. Canada is a large country with a long-standing democratic regime, stability, and no colonial history. These attributes make us an admired and non-threatening country in international forums.
Canada is big enough to make a difference but not big enough to threaten anyone. This is a significant asset if used properly.
Transcript by Dezi Atteby
You can find the video on Youtube: https://www.youtube.com/watch?v=gqTMbSrAnxQ