Less than a week ahead of a meeting of G20 nations in China, former British prime minister Gordon Brown has urged the world’s most powerful economies to seal a “global growth pact” to fight unemployment.
Brown was joined on Saturday by other top economic policymakers in his call for a transformation of the G20 to help it remain relevant in a global economy torn by clashing national interests — although their focus differed somewhat from his.
To tackle high unemployment in poor and rich nations and a lack of economic growth in Europe and the US, politicians need to look beyond merely reducing deficits, Brown said.
“All around the world, deficit reduction has become the big issue when actually it’s only one of the issues,” Brown told a panel in Brussels debating the relevance of the G20.
The panel also included Pascal Lamy, the director-general of the WTO, and World Bank president Robert Zoellick.
Brown said the G20 was at a juncture that would decide whether it can deliver prosperity to poorer nations in the Middle East and North Africa, as well as more established economies in the Americas and Europe.
His comments come as tens of thousands of people were marching through the streets of London to protest austerity measures, and political upheavals continue in Northern Africa and the Middle East, triggered in part by huge youth unemployment.
They also come ahead of a meeting of G20 central bank governors and Cabinet ministers in Nanjing, China, on Thursday — convened by French President Nicolas Sarkozy — to discuss reform of the global monetary system.
France has made such a reform one of the focal points of its year-long presidency of the G20, along with reducing economic imbalances and volatility in commodity prices.
While Brown said an overhaul of the monetary system was necessary, he chose to take a broader view.
“I cannot imagine that the world can solve the unemployment problem we’ve got without closer economic cooperation,” he told the panel, organized by the US’ German Marshall Fund, a non-partisan public policy group.
If China increases domestic consumption faster than expected, the US manages to rebalance its own expansive consumption and investment patterns and Europe can overhaul its struggling economies, the global economy could grow about 4 percent faster by 2014, create 50 million jobs and pull about 100 million people out of poverty, Brown said, citing a report by the IMF.
However, he cautioned that there was a lack of political will on the international level to compromise on domestic interests.
“We are retreating into national silos just when international economic cooperation is more needed than ever,” Brown said.
Lamy and Zoellick also said the G20 needed to transform if it wanted to remain relevant — the WTO chief pointed to paralysis over disagreements between the US and China, while the World Bank president said the over--representation of Europe was being seen by many as coming at the expense of poorer African and Asian nations.
However, both stressed that a focus on deficit reduction was unavoidable at the moment.
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