The opening session will review the near-term economic challenges in the global economy, the risks they pose to the global outlook and the consequences of failing to secure the international cooperation that is needed to deal effectively with these risks. The objective is to identify clear, concrete initiatives that could promote more effective multilateral engagement and cooperation.

Five years on, the global financial crisis continues to cast a pall on a global economy that remains dangerously unbalanced and is threatened by new fragilities. The euro zone remains in crisis, with policy responses to date that address only the symptoms of the problem — not the underlying institutional and governance weaknesses. The result has been higher unemployment that, in some euro zone countries, is now at levels rivalling the Great Depression. In contrast, the US economy has continued its steady — albeit tepid — recovery, with unemployment slowly trending down over time. The US fiscal situation is less encouraging, with public debt on an unsustainable path over the medium term and, absent a resolution of the debt-ceiling impasse, a looming fiscal shock in the form of expiring tax cuts. Taking place days after the US presidential election, set for November 6, CIGI ’12 will be an opportune time to consider the impact of fiscal constraints facing the president, whoever that might be. Although China, Brazil and India rebounded quickly from the crisis, new concerns about the prospects for growth have surfaced, and worries remain about how these dynamic emerging economies would be affected by a new round in the currency wars that erupted in response to the quantitative easing employed by advanced economies’ central banks.

The session will review efforts to secure a timely rebalancing of global demand that promotes strong, sustainable and balanced growth, consistent with the G20’s Mutual Assessment Process. This rebalancing would reduce the risk of insufficient global aggregate demand and dissipate the threat of deflation/disinflation in countries that need to undertake difficult, sustained fiscal adjustments. Failure to achieve these fundamental adjustments could undermine the support for the open, dynamic international trade and payments system that has raised living standards for so many around the globe, as individual countries retreat to policies intended to insulate themselves from global risks, but which, collectively, constitute beggar-thy-neighbour measures, destructive of national and international prosperity.

Chair: James Haley, Inter-American Development Bank, frm. Director, CIGI Global Economy Program

 

Panellists:

  • Jørgen Elmeskov, The Organisation for Economic Co-operation and Development (confirmed)
  • Stephen Pickford, Chatham House (confirmed)
  • Gordon Thiessen, Bank of Canada (confirmed)
  • Mark Thirlwell, Lowy Institute for International Policy (confirmed)
  • John Williamson, Peterson Institute for International Economics (confirmed)
Program
Over the past five years, the global financial crisis has dominated international policy discussions. This August marks the fifth anniversary of its outbreak. The starting point for the CIGI ’12 conference, then, is the recognition that the legacy of the global financial crisis is felt across a spectrum of issues. These issues span the short-term outlook for global growth, global financial regulation and strengthening the Financial Stability Board (FSB); the challenges of poverty reduction and sustainable development; and the transition in global leadership, as, on the one hand, US economic and strategic leadership is eroded by the legacy of the financial crisis and political gridlock over public finances, while, on the other hand, China and other emerging economies continue their economic and geo-political rise. CIGI ’12 will focus on making concrete policy recommendations to build the global governance arrangements that are needed to respond effectively to the legacy of the crisis.
The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.