Business and the world economy
The G20 Summit is taking place in Seoul after two years that have been the most difficult in living memory for business – as well as for governments and consumers – in large parts of the world. But it could have been much worse. Thanks to the rapid and sturdy response of governments in the G20 and other countries to the dangerous financial crisis that broke in the latter part of 2008, anything resembling a depression was avoided and the ensuing recession was more shallow than at first expected.
In the run-up to the Seoul Summit, ICC has become increasingly concerned by public talk of ‘currency wars’ as several nations have accused each other of manipulating exchange rates by a variety of means in order to gain competitive advantage for their exports. International tensions over exchange rates are hampering the rebalancing of global demand which is clearly necessary. They are also courting the dangerous risk of a degeneration into protectionism. Currency wars could rapidly become overt trade wars. As in the 1930s, that might well lead to a major slump in economic activity worldwide.
ICC has been heartened that the meeting of the G20 Finance Ministers in Gyeongju in October appeared to recognize the dangers of unilateral action by countries and agreed upon a policy framework aimed at addressing global economic imbalances through a collaborative, coordinated and multilateral approach. That is what is needed – and we hope that the ministers’aspirations will be successfully reflected in deeds as well as words.
On the occasion of the Seoul G20 Summit, ICC takes the opportunity to offer its views on a few key policy areas which are of particular importance to ICC member companies across the world.