India, Latin America and Africa must be taken on board while framing the rules for globalisation in the post-economic crisis scenario, French President Nicolas Sarkozy said at WEF’s annual meeting here.
“We cannot govern the world of the 21st century with the rules and principles of the 20th century. We cannot govern globalisation while relegating half of humanity to the sidelines, without India, Latin America or Africa,” he said in his opening address last evening.
Being the first French President to address the WEF in its 40 years, Mr. Sarkozy said the post-crisis world has to be viewed differently from what happened before the second half of 2008.
“We cannot look at the post-crisis world in the same way as the world before the crisis,” he said, coming down heavily on the behaviour of the reckless bankers whose actions led to the financial crisis.
World financial system
He said but for the unity of the emerging and advanced countries as represented in the Group of 20, it would have been difficult for the world financial system to get the lost trust back.
“Without the G-20, it would not have been possible to envisage regulating bonuses (of bankers and financial services giants), closing down tax havens and changing the rules of the accounting and prudential standards”, he added.
Mr. Sarkozy said in just one year, the global leaders committed themselves under G-20 to adopt common rules that will radically change the way the world economy operates.
Recovery
He said if public finances are not cleaned up, the recovery may be short lived. “The same causes will produce the same effects. Look at the new bubbles that are already starting to form. Here, we cannot be certain that the states will still have the means to guarantee trust.”
In a clear message to the US that the dollar cannot be allowed as the only global currency, Mr. Sarkozy said, “We cannot have, on the one hand, a multi-polar world and, on the other, a single benchmark currency across the globe. We cannot, on the one hand, preach free trade and, on the other, tolerate monetary dumping“.
France, which will chair the G8 grouping of rich nations and G20 of both advanced and emerging countries in 2011, will place the reform of the international monetary system on the agenda, he said.
China was the first country to have suggested an alternative global currency to the US dollar.
In one of the sharpest ever attacks by a head of state, on the highly paid bankers, the French President backed US President Barack Obama in stopping speculation by banks.
However, he said this debate cannot be confined to a single country, “whatever its weight in global finance. This debate must be settled within the G20”, he said.
