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Skip Navigation LinksHome :: Back Issues :: Interview with G-20 chairman Paul Martin

November 2001

Interview with G-20 chairman Paul Martin


Paul Martin, chairman of the G-20, speaks on the dangers of hosting global economic summits in light of the new wave of terrorism. He also talks about the upcoming conference in Ottawa, trade finance, and the economic side of the war on terrorism.




       
Paul Martin
Since protestors against global capitalism caused destruction and damage in Seattle during the World Trade Organization meeting, hosting global economic summits has become an unenviable responsibility. The new wave of terrorism makes it outright dangerous. But the urgent need to talk in the face of a worrying simultaneous slowdown in the economies of the US, Europe, Japan and Asia prompted Canada's finance minister, Paul Martin, to offer Ottawa as the site of this month's mini Bretton Woods meetings. On the schedule are meetings of G-20 finance ministers and central bank governors, the International Monetary and Financial Committee (IMFC), the IMF, and the Development Committee of the IMF and the World Bank.

In late October, on a day when Canada's finance ministry was evacuated because of a false security scare, Martin, who is chairman of the G-20, spoke to Euromoney's David Clarke.

What your expectations for the events?
We welcome these meetings. It is very important that the world not only gets back to business but that it demonstrates unequivocally that it is back in business, and that the terrorists are not going to bring things to a halt.

The meetings of the IMFC in terms of global economic growth; of the Development Committee in terms of dealing with the problem of poverty; and of the G20, which brings together not only the majority of the world's rich but also the majority of the world's poor, are very important in dealing with the fundamental issues of our time.

I know that great progress will be made at these meetings in terms of our traditional agenda but as well in terms of our new priority of making it impossible for terrorists to finance their terrible, terrible agendas.

Your decision to offer Ottawa as host indicates confidence in the security arrangements. On what is this based?
We have very great confidence in the Royal Canadian Mounted Police, in the Ottawa police, in the Ontario provincial police, and indeed in our intelligence and security services. These are people of the highest calibre, and the highest competence, and know exactly what they are about. At the same time we do intend to have meetings with NGOs, which have been very actively involved in the case of reducing poverty, and rounding off the hard edges of the market system.

Time has been short to prepare for these meetings. Will there be more decisions than usual made on the spot. How transparent will this process be?
In terms of the IMFC and the Development Committee, the work is always ongoing. Undoubtedly in both committees one thing the chairpersons will endeavour to do will be to have open discussions. One of the hallmarks of the G20 process is that, while the agendas are pre-set it was deliberately set up to ensure that control was not exercised by any secretariat. The whole goal has been to ensure informal discussions and rapid decision making at the table.

Are we looking for practical results in addressing specific issues in problem countries or is the focus broader?
The broad framework is doubtless important. Achieving the goal of seeing global growth returns also means doing a lot of work in terms of the individual member economies, especially the US, Japan and Europe as whole. That is where the principal focus has to be.

So the principal focus has to be to coordinate these?
No I am not saying that the principal focus has to be coordination. I think each economy has to do what needs to be done to address its own needs.

In the US they are engaging in what appears to be a major stimulus package. One would hope that other countries look at their own needs and basically do what it takes, whether it is a reduction of regulation or a reduction in the central bank rate. The answer is different in every country.

In Canada we have just seen for example a very dramatic reduction in the bank rate which is very important, as you know.

Is there going to be an attempt to synchronize pump priming beyond the US?
No, there will be an attempt to synchronize and focus on whatever will bring about economic growth for the individual economies. The needs of individual economies are very different. So there won't be an attempt to come up with a single off-the-shelf answer for every economy. What there is going to be is a focus on the need for everybody to get right at the fundamentals of their own and make them work.

That will be comforting to economic purists, who don't like any attempts to synchronize, let alone have activist governments.
Detailed synchronization just simply won't work. It really is very much different strokes for different folks. But the objective is very much the same.

What is your view on countries that are engaged in the war against terror getting various kinds of support, whatever their records on fiscal or economic reform? How are you going to balance that?
There are two wars. This is not a war being fought just with armies. It is also being fought by accountants. We are going to need accountants to cut off the funding for terrorists, and a lot of countries are going to need help. This is not necessarily a science. It is an art. We are going to have to develop the expertise and we are going to have to make sure everyone has it. I'll tell you. The fight against terrorism is only going to be as strong as the smallest country is able to make it.

How do these meetings relate to initiatives of the WTO, which is contemplating the launch of a development round?
The expansion of world trade is a vital component of the alleviation of poverty and of the increase in economic growth, which benefits the poorest countries and benefits the richest. So we are very much seeking to encourage the trade ministers to see a successful conclusion of their negotiations. At the G20, our goal is make sure that economic growth takes place and benefits the widest number of people. That is why we have also put a focus on things like health care and education.
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