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Oct 26

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G20 – Listen to Business: Address the Confidence Deficit

In my February 2011 article I asked if the G-20 was “lost in translation” when it came to everyday business people trying to navigate the increasingly complicated G-world. At the time, a fragile economic recovery was underway and as the new chair of the G-20, the French had laid out an extensive wish list of things they wanted to accomplish.  Since then, imploding sovereign debt, persistent unemployment and the temptations of increased protectionism has shifted G-20 leaders back in to crisis mode.

Although all eyes are on the future of the Eurozone, leaders of the 20 largest economies in the world can still walk away from the November summit in Cannes with a ‘win’.  How?  They can reinforce the partnership with the business community and jointly address another mounting deficit – the ‘confidence deficit’.

To help restore confidence, businesses from across the G-20 countries have joined forces under the banner of the B-20.  When B-20 leaders meet with political leaders just prior to the Cannes summit, they should emphasize the fact that the time to address the new realities of the global economy is now.

The B-20s top recommendations are likely to include:

  • Tackle uncertainty hampering economic growth by communicating clear objectives
  • Reduce unsustainable government deficits through decreases in public spending
  • Remove obstacles that hinder entrepreneurship, SME development and job creation
  • Deepen and broaden capital markets in emerging economies
  • Address deficiencies in the international monetary system including exchange rate misalignments, volatile short-term capital flows, excess reserve accumulation and global liquidity
  • Create a joint G-20/B-20 platform to address corruption
  • Launch a G-20/B-20 dialogue promoting trade and investment
  • Promote global cooperation on regulatory and legislative frameworks

This is the short version of an even longer list of recommendations, most of which will require long-term and likely, politically painful solutions.  So, for the G-20 leaders to emerge from Cannes with any semblance of success, they should remember one thing – uncertainty matters.  Go the top of the list and do what can be done to restore confidence in the global economy and tackle the uncertainty hampering economic growth.

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