Unemployment hitting global economy- top official

Published November 13th, 2012 - 06:56 GMT
Unemployment will blight the global economy
Unemployment will blight the global economy

Unemployment and economic crisis have drained the energy from crisis-ridden major countries who are running out of gas, a top official said.

More than 40 per cent of the global youth are unemployed — that could potentially destabilise world order. Pascal Lamy, director-general of the World Trade Organisation (WTO), told delegates at the Summit of the Global Agenda Councils in Dubai on Monday why he thought the major economies weren’t able to play due role in solving the global financial crisis.

“In order to play a global role, the leading countries in the world need to have political energy. However, high rate of unemployment and economic crisis has emptied their fuel tank and that’s why they can’t play their due role in global governance to strike better cooperation and engagement.”

The crisis has damaged the spirit of collaboration globally as governments are bogged down with local issues that need to change.

“Doing things internationally needs a lot of political energy — which not many countries have. We are in a period of low international energy which will remain as long as the current economic crisis continues. The question is how and when are we going to get out of this crisis?”

The current Eurozone crisis calls for greater international engagement than before, Gordon Brown, former British Prime Minister and a United Nation’s Special Envoy on Education, told thought leaders.

The world has become more interdependent where global production and consumption is happening in different parts of the world. However, this calls for a strong world order, leadership and governance.

“We are coming to a conclusion that the world is changing fast and becoming more interdependent,” Gordon Brown said. “No country can grow in isolation. We are in transition — global production is concentrated in one part of the world while the consumption is happening elsewhere, so there is no substitute to stronger global engagement — cooperation, coordination and compromise.”

Referring to the handling of the Eurozone crisis, he said, there are two types of finance ministers — one who fail and the other who leaves just in time!

“The financial crisis forced countries to collaborate and cooperate initially, but then they drifted as local issues began to bite,” Brown said.

European crisis has been labelled as Greek and Spanish crisis, he said, and that hampered cooperation.

He warned the global thought leaders to draw up a proper agenda. “This crisis may not be over fast and we might move from this one to another one,” Brown said. “When we face another financial crisis, people are going to ask why we did not learn lessons from the first crisis?”

Pascal Lamy, however, refuted allegations that the global system has failed in handling the economic crisis.

“It’s not that all the system is clogged. There are certain things that are working — such as the United Nations, World Bank, etc. However, what is not working is the global governance,” he said.

“We have the systems, institutions that works — may not be the way we want them to work.”

Jan Eliasson, Deputy Secretary General of the United Nations, said he does not see a global issue in isolation from the local one.

Referring to the Arab Spring and the latest crisis in Syria, he says, these are not far from the global issues.

“Global crisis and local issues are the same to me — when looked at from its entirety. Global issues are someone else’s local issues. There is no peace without development and no development can take place without peace.

“Good international cooperation and collaboration must also serve the regional and national interests,” he said. “We have to do it together.”


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