To restore confidence and to improve growth and employment prospects, decisive action has to be taken to ensure fiscal consolidation at an appropriate pace coupled with structural reforms. Policy action will need to maximise synergies between macroeconomic and structural instruments. The eurozone has to work on the future of the European Monetary Union by implementing comprehensive reforms designed to enhance growth and competitiveness. The United States has to embark on a credible fiscal consolidation path. Emerging economies, which have been major contributors to global growth, increasingly have to meet the challenges of pursuing a growth path that is both inclusive and sustainable; economic policies in these countries and others need to be adjusted and to be brought in line with global rebalancing.
Our common approach of international economic policy cooperation has to make use of institutional linkages between national governments, international organizations and other stakeholders. We welcome the ongoing cooperation between the IMF, the World Bank Group, the ILO, the OECD and the WTO in the following areas:
- Boosting innovation, improving education, strengthening competition and reforming health systems and labour markets remain on the agenda of both advanced and emerging economies. By implementing adequate measures, growth potential will be enhanced, new employment generated and fiscal consolidation supported. In particular, we welcome the efforts several eurozone countries are undertaking to enhance their external competitiveness and to consolidate their budgets. As a result, investor confidence in these countries has improved. Nevertheless, further efforts, especially with respect to youth employment generation, structural reform and effective social protection systems, are urgently needed. According to OECD estimates, reforms in the labour and product markets could raise output by up to 4 percentage points in ten years.
- Sound macroeconomic policies have to go hand in hand with efforts to increase employment, drawing on the ILO’s Decent Work Agenda and on its Global Jobs Pact approach adopted at the ILO International Labour Conference of 2009. In particular, strategies to reduce youth unemployment have to be implemented with high political priority. We welcome the new analysis of job creation in developing countries in the World Development Report and the opportunities for strong collaboration in this area.
- We are convinced that international trade has a major role in fostering global growth and employment. It is crucial to resist adopting protectionist measures and to keep markets open. We regret that the WTO Doha Round has come to a standstill. While bilateral trade agreements are attractive for the parties involved, multilateral trade opening remains the best way to ensure fair competition, prevent trade distortions and create new market opportunities on a global scale, especially for developing countries. This is why we strongly support advancing those issues in the WTO negotiating agenda which are closer to completion, such as a deal on trade facilitation.
- Climate change and the protection of natural resources remain key challenges of our time. These challenges could also become an opportunity for growth. The potential for low carbon development and green growth needs to be realized by targeted action in developed and developing countries and by undertaking efforts to ensure resilience to climate impacts. All international organizations are committed to promoting green growth and to this end cooperating within their mandates. We are working towards a successful Conference of the Parties in Doha and will further promote low-carbon development strategies.
- Food security for a growing global population requires all our efforts to increase agricultural production and productivity in a sustainable manner. We encourage further public and private investments in agriculture, in particular in the poorest countries and with a focus on smallholders. The present high prices for important cereals demand attentive international coordination while unilateral measures that would restrict access to food should be avoided.