As countries around the globe recover from the recession, international leaders have asked for necessary restructuring of the global economy on the opening day of the World Economic Forum’s summit on global agenda here.
“We’ve got a window of opportunity,” Sharan Burrow, President of the International Trade Union Confederation, told reporters here.
“The crisis has focused the minds of governments, particularly the G20, on what you need to do to rebalance globalisation. It means rebuilding economies, balancing exports with domestic demand and investing in jobs, jobs and jobs. You must combine that with social protection.”
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Mr. Burrow called for investments to focus on generating green growth and helping the poorest people in the world.
While global efforts to address the crisis have stopped the downward spiral of the broad economy and sparked renewed confidence in the financial markets, there are “acute worries that the momentum for reform might be ebbing,” warned John Gieve, Senior Fellow at Harvard University’s Belfer Centre for Science and International Affairs.
“There is wide consensus that we have to build up the strength of international governance machinery in Europe. The question is: should we be doing something like that on the world stage?” Mr. Gieve added that there are growing concerns that “the stimulus imbalances in the West are fuelling asset bubbles in the East.
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“The quality of the rebound has been patchy, Howard Davies, Director of the London School of Economics and Political Science, remarked.
We have so far seen rather weak recovery where there has been one, he observed.
“We have still not solved the global imbalance problem that was behind the recession. The economic recovery in Asia is stronger than it is in the US and EU, Mr. Davies noted.
Laura M Cha, Deputy Chairman of the Hongkong and Shanghai Banking Corporation, agreed.
“China is leading Asia out of the doldrums,” she said. While there have been doubts about the Chinese economy’s capacity to recover strongly because of its perceived dependence on exports, the combination of stimulus spending, particularly on infrastructure, and the growth of industrial production spurred by domestic demand has put China on track to exceed its 8 per cent growth target for this year.