Distracted
by their own domestic concerns, global leaders do not have the energy to fully
concentrate on world economic problems, said the chief of the World Trade
Organization (WTO).
"Frankly, things do not look good,"
said Pascal Lamy, WTO director-general, in an exclusive interview with China
Daily.
"The capacity of global leaders to
address the problem is too weak."
Because of that, Lamy said, the unfolding wave
of global economic crises will be less violent but more durable compared to the
last major crisis in 2008-09.
The stubbornness of the crises has weakened
the authority and legitimacy that leaders require to bring about global
solutions.
"You have to compromise. This is for the
moment a vicious circle. Their capacity to drive globally is weakening,"
said Lamy.
He said the political leaders have to focus
more on where they are accountable, which is their domestic affairs.
"There is no global accountability, no global voter. As a result of that,
the energy which is available in the international system to compromise and
converge is not 100 percent of what I want, only 70 percent," said Lamy.
Speaking prior to a celebration marking
China's 10th anniversary of its entry into the WTO, Lamy said the outlook for
the global economy has worsened considerably in recent months, especially amid
the European sovereignty debt crisis.
But for Lamy, the world has seen two crises:
an economic crisis and a crisis in global leadership.
"If you have both, it is worse. These two
things, unfortunately, synchronize each other," Lamy said.
Since last May when the European debt crisis
erupted, the European Council and euro group leaders have met seven times but
so far have failed to come up with solutions.
Sovereignty credits and bonds have been
downgraded recently in Hungary, Portugal and Belgium, while the situation has
been going from bad to worse in Greece and Italy despite changes in government.
According to a WTO report unveiled last week,
world trade has grown more slowly than expected in recent months because
developed economies have been hit by shrinking global demand, the impact of
natural disasters, cuts in national budgets, credit conditions and the
sovereign debt crisis.
Trade growth in developing countries has also
been adversely affected by global developments, including signs of overheating
in some major emerging markets.
"So I think the global growth will be
moving downside. And compared to six months ago, the world economic outlook has
been deteriorating," said Lamy.
Lamy said the United States, Europe and Japan
- which have contributed to 50 percent of global growth - need to make the
necessary fiscal adjustments and debt reductions without slowing their economy
too much as any downside will affect the economies of developing and emerging
countries.
The WTO's forecast for world export growth in
2011 was revised to 5.8 percent, down from the earlier estimate of 6.5 percent.
And developed economies' exports are expected to rise by 3.7 percent and those
from developing countries by 8.5 percent.
Lamy said the worsening world economic
situation has also negatively affected international affairs, not only within
the trade regime and negotiation, but also climate change, macroeconomic
coordination and currency issues.
Lamy will head for Beijing to attend a
ceremony on Dec 10 to mark a decade of Chinese membership in the WTO, which he
believed is a "success story" with a lot of turbulence.
Fu Jing in Geneva/China Daily | ANN
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