Davos Annual Meeting 2010 – Stephen Harper, Prime Minister of Canada

Davos Annual Meeting 2010 – Stephen Harper, Prime Minister of Canada

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Welcome Prime Minister
here in Davos. We are very much
looking forward to your speech and your sharing your plans
and your ideas with us. And there are three
particular reasons to be particularly interested
into your speech. So first,
Prime Minister Stephen Harper, you can, as a Prime Minister
of a country which has relatively very well
weathered the storms, according to my knowledge
you have passed managed of all the G7/G8 countries
the present economic crisis. Thank you for giving
a good example and I think… the forum is proud
to have praised in its competitiveness report
the resilience of your banks and the soundness of your banks
as good examples of the world
banking community. Second, we welcome you
as a representative of a country which traditionally has shown
great international engagement which has taken very seriously
its international responsibilities. I just want to mention your
strong involvement in Afghanistan. The first foreign visit you made,
Prime Minister, was to Afghanistan. I think you have been three
times in the mean time. I should end and should
commend you particularly on your engagement also
in Haiti. I think this engagement
has also shown how much you personally are attached
to those humanitarian tasks which we have to fulfill
in the world. And last but not the least,
we welcome you of course as the Chair of the G8/G20 and a very important summit will
take place under your chairmanship hosted by Canada and we are
now very much looking forward to what you have to tell us.
Prime Minister, the floor is yours. Thank you very much Professor.
Merci madames et monsieurs. It’s great to be here in Davos
and to have this opportunity to contribute to your discussions
on some of the vital issues that are confronting
the world today. Some of them are complex
and they may at times, seem abstract. But for ordinary men
and women everywhere, the substance of what we talk about
here translates into simple realities; like a home, food on the table
or a better life for their children. So it is an important debate;
one that we’re delighted to be part of. I should also like to welcome
some other members of our government… my government – that are here today,
my friends and colleagues Finance Minister
Jim Flaherty is here, Minister of International Trade
Peter Van Loan; and of course Ambassador
Santi and also Governor of the Bank of Canada
Mark Carne. Welcome to all of you
and to all the other Canadian delegates who are here today. I’d also like, Professor,
to take a moment to offer my personal congratulations
to you on this, the 40th annual gathering of your
creation, The World Economic Forum. You chose as its motto “Committed
to Improving the State of the World.” I would observe that few
who have set such a lofty goal have more reason to be pleased
with their accomplishments. To have conceived of the need
for such an institution as this required insight, to have
established it took commitment, but to have then nurtured it
as a podium from which business and political
leaders could nudge public policy by addressing their peers
from around the world, that is a formidable achievement and
Professor, this gathering salutes you. Professor, well it has been
a long time since the first meeting
of this forum four decades ago. Our circumstances today have something
in common with the world in the years following 1971.
Economies then were in turmoil, the institutions governing
international finance were failing the test of crisis
and wherever one looked around the world there was trouble. So it is today.
The latest crisis hit as the world was grappling already
with enormous challenges. large current account imbalances, aging
populations in advanced countries, violence, terrorism,
and of course, the eternal problems
of poverty and underdevelopment. There is always something
but we must never stop trying to improve the state of the world. Therefore in June, when Canada hosts
the leaders of the G20 and the G8 in Toronto in Muskoka respectively, our goal is to work with our partners
towards practical and durable solutions. In the next few minutes,
I want to share some of the principles that will guide
the Government of Canada and hopefully, the discussions
of the summits under our theme,
“Recovery and New Beginnings.” Let me first talk about
the G20 itself which at Pittsburgh we officially
designated as the world’s premiere forum
for economic cooperation. In that role, the G20
will stand or fall on its ability to demonstrate in the months to come
the same cooperative spirit it has shown over the past year.
Now I am hopeful. Beginning in Washington
in November 2008, G20 leaders have responded
to the systemic financial collapse and the global recession with quick, decisive,
and coordinated action. At the London summit
in April 2009, these measures were expanded
with a particular emphasis on the most vulnerable states
so that in Pittsburgh the seeds of a new era of balanced,
sustainable growth were planted. If I may be indulged
in a personal recollection, what I saw at the Washington summit
made an enormous impression on me. Nations whose interest
have often been at odds, nations with different traditions
of governance, rivals,
even former enemies found themselves addressing
common problems with a common will. In this globalized economy, they
recognized that a flood engulfing one would soon swamp them all. So even though twenty-some leaders
all represented sovereign states, they agreed to common
and synchronized actions to chart the same course
toward calmer waters. Ideological differences were set
aside. Old enmities were not raised. I would say this: If you
had arrived from another planet you could never guess which nations
had spent decades mired in hostility. Now you might call it
the fellowship of the life boat. But ladies and gentlemen
in that brief parting of the veil I saw world leadership at its best.
A glimpse of a hopeful future, one where we act together
for the good of all, the world we have been
trying to build since 1945, the world we want
for our children and grandchildren. It shows it can be done
if we act together and we call this, I call this
enlightened sovereignty. And I believe our
understanding in Washington, just in Washington, allowed us
to avoid the cataclysm that otherwise really would have
come to pass. But an agreement to act
is just a start. It is acting on the
agreement that matters. So when the G20 resumes
in Toronto the discussion should be less
about new agreements than accountability
for existing ones, less about lofty promises
than real results, less about narrow self-interest
in sovereignty’s name than an expanded view
of mutual interests in which there is room
for all to grow and prosper. Enlightened sovereignty then
is the natural extension of enlightened self-interest. To be succinct the real test
of the G20 going forward is that it develops and sustains
among its members a sense of shared responsibility
toward the global economy. For well the market’s awesome power
to generate and widely distribute wealth
is self evident we also know from history
that markets doing need governance. For the new global economy,
the G20 is today what we have. Now as we work through the final stages
of the recession and embrace recovery, there are three critical areas
where G20 actions have been and will remain vital:
financial sector reform, stimulus programs,
and global and growth strategies. Let me begin with reform
of the financial sector, reform of financial
sector regulation. This has been a focus since Washington
because after all, that sector’s failures and the
transmission of its contagion globally are widely acknowledged
to have triggered the crisis. Now as many of you know
and Professor, you were kind enough
to mention once again, Canada was not
a part of the problem. Canadian banks had maintained
healthy leverage ratios and largely avoided exposure
to toxic assets. No major Canadian financial
institution failed and none required bail-outs
from the government. As a consequence, Canada now has one of
the largest banking sectors in the world and it is entirely, entirely
in the private sector. I should note that reputable observers
have recognized this Canadian advantage. As you said, Professor,
this year as last, your own eminent organization,
the World Economic Forum, and more recently
Moody’s Investors Service both ranked Canada’s banks
as the world’s soundest. The International Monetary Fund
has commented that, let me quote, remark that Canada’s
financial sector is showing “remarkable stability amid
the global turbulence thanks in good part to
strong supervision and regulation.” This is undoubtedly
part of the reason why Canada took on
the co-chairmanship of financial sector regulatory
reform at the first G20 in Washington. Canada has maintained
good active systems of prudent and measured regulation. Now I should just be clear, we do not
claim that our system is perfect. The lack of a single national
securities regulator is an obvious hole. The vast majority of our provinces are
now working with us to fill that gap. We’ve also been obliged
to tighten the criteria for government mortgage insurance.
So there are things we can and will do. But overall, the performance
of this sector during the crisis showcased the effectiveness
of Canada’s approach. Through our G20
chairmanship this year, we want to urge the adoption of
similar regulatory practices globally. And in this regard, I believe
the Canadian system generally does two things
that should guide future work in this area. First, we must promote national regulation
sufficiently strong to avoid repetition of the kind
of crisis we experienced last year. We also believe that such
national systems should be subject
to international peer review in order to enhance transparency
and reduce risks to the global economy. Anything less would expose
every economy to needless risk. In fact, if inadequate regulation
is not addressed, I believe the consequences Could actually be worse
than before the crisis. If after a period
of renewed stability, institutions are able to return
to the irresponsible practices that caused the crisis,
what would they have learned? They would have learned
a very bad lesson, that is, that reckless behavior
can be engaged in because national governments will
ultimately backstop the consequences. And that, ladies and gentlemen,
would be a very dangerous precedent. Obviously then financial sector
regulation must be tackled and it must be adequate.
But second, Canada also believes
that financial sector regulation must have the right purposes
and must not be excessive. Now let me just say,
first of all, that I understand why
there are calls for such approaches
in some circles. And situations very different
in Canada’s where big bank failures resulted
in public bail-out, where the public endured
the pain yet those who caused it
seem to emerge unscathed, there is understandably public anger
and demands for tough or even retaliatory action.
In Canada, because our situation
has been so different, we don’t face such demands and public
opinion is much more reflective about what is needed. Our approach to
financial sector regulation in Canada, while historically much more
activist than in many other countries has not been to micromanage
the affairs of a complex industry, its purpose is to ensure
transparency in the market place, help link risk, performance,
and reward, and encourage a culture of prudent behavior
focused on the long term. So let me be clear,
through the G20, we will be encouraging strength
in financial sector regulation and improve coordination
between regulators but Canada will not go down
the path of excessive, arbitrary, or punitive regulation
of its financial sector. Canada has a well-regulated
free market economy with a private financial sector
of enormous strength. We intend to build
on that advantage. We intend to see the financial
sector in Canada grow. And we intend Canada’s
globalization in that industry to get stronger yet
in the future. The second ongoing G20 policy debate,
a policy priority, has been to drive globally
coordinated stimulus measures, both monetary and fiscal. We believe it is important
to stay the course but only for now. It remains my conviction
that fiscal expansion, enhanced government spending,
and increased fiscal deficits were necessary
during the recession. In fact, with rapidly
falling output and employment
and interest rates near zero, economic theory has been
very clear, this was the only option. The temptation today to see
hopeful signs of recovery everywhere in small things is understandable,
so then would be the wish to declare recovery here
and abandon last year’s commitments to these expensive public investments.
We believe that would be a mistake. The truth is that despite the G20’s
good work during the last 15 months, the recovery is a mile wide
but only an inch deep and job creation
remains very tentative. But while it is absolutely
two soon, excuse me, while it is absolutely too soon
to abandon stimulus programs, it is no longer too early
to start thinking about a strategy
to exit them because we all know
the long term risks of prolonged government spending
of this magnitude: renewed inflation,
rising interest rates, crowding out of investment, prolonged
sluggish economic performance. This view informs our
economic planning in Canada. Canada will complete
its two-year economic action plan with fiscal stimulus measures
in support of the recovery, in support of the economy.
We shall faithfully meet all the promises we made
at earlier G20 meetings. At the same time, our next budget
will outline a path to reduce the deficit
and return the balance budget in the medium term. We will be doing this,
I should add, we will be doing this –I want
to talk about this Canadian advantage, we will be doing this from levels
of deficit and debt that are, by comparison with other advanced
industrialized economies, quite modest, we have the lowest level of
indebtedness in the G7 by far and when the recession ends, our relative levels of indebtedness
will still be lower by an even wider margin. That is because Canada paid off debt
aggressively during the growth years. Now, in passing,
as an economist, I must observe that
this particular recommendation of John Maynard Keynes
is seldom acted upon as vigorously as is permission to borrow.
I would say that in this regard, Keynesianism is a bit
like communism according to those who advocate it,
neither has been properly attempted. So thus governments borrow when times
are difficult because they must and then they borrow more when times
are easy because they can. But instead through Keynesians
that we are accused of being, our government paid $38 billion
off Canada’s national debt between 2006 and 2009. And that, incidentally, is what
allowed us to lower taxes in Canada. We believe it is important
that taxes be low and that tax reductions
be sustainable, that way they become
a permanent form of fiscal stimulus. In an environment of falling debt, we
were able to lower taxes of all kinds. In fact, Canada has already
the lowest tax rate on new business investment
in the G7. Investors take note, Canada
is and will remain open for business. Now finally, let us talk about
global trade and growth strategies. I suspect every single
person in this room. I suspect every single
person in this room understands that the growth
in global trade has been largely responsible
for wealth creation worldwide in the past generation.
And therefore, enhancing trade
and resisting protectionism is both essential to the world economy
and to the just cause of raising millions
of people from poverty. The G20 has said this
at every single meeting. Of course there have been
national actions, maybe too many, that detract from that goal.
Even so, we have thus far avoided
anything like the protectionism that turned the stock market crash
of 1929 into a decade long depression. In Canada, we have tried –
continue to try to be leaders in promoting free trade
and open markets. Our stimulus package, I should mention,
did not raise tariffs, it lowered them unilaterally,
I might add. Since 2006, we have concluded free
trade agreements with 8 additional countries and we are
engaged in six other negotiations including with the European Union.
We will continue to promote trade. We will continue to resist
protectionism and to reduce and eliminate tariff barriers.
However, at Pittsburgh last year, the G20 went beyond merely
advocating for trade and against protectionism as a basis for promoting
global growth. We also established what we
Christened the “Framework for Strong,
Sustainable, and Balanced Growth.” Much of what the framework prescribes
takes us in the right direction. I speak especially of consensus
at the macro level on the causes
of the recession and the mutual commitment among G20
members to coordinate their policies. However, this is where G20 partners
must truly embrace enlightened view of sovereign behavior. Otherwise,
we will pursue strategies inevitably that do not produce mutual advantage
and therefore cannot be sustained. Like “drop your tariffs,
I’ll keep mine” or “let your currency trade
at market rates, “we’ll keep ours undervalued.” We should know from
the terrible experience of the 1930s that strategies that make it
difficult for somebody to do business inevitably make it
difficult for everybody to do business. So I say notions rooted
in a narrow view of sovereignty and national self-interest
must be reconsidered. We cannot do business
as though for one to have more,
another must have less. That is not true, it is not just,
and it cannot be the path we take. Our ambition, the necessary condition
for success as the G20 moves forward must be a shared belief that the rising
tide of recovery must lift all boats,
not just some. This is the exercise
of sovereignty at its most light. And I don’t believe, by the way,
let me just say this as a side, I don’t believe, by the way, that this is all about the structure
of global institutions. It is more about a matter –
it is more a matter of attitude. Some words of former US Secretary
of State Corder Hull seemed apt. As you know, Hull was
the driving force of the creation of post-war international institutions
that are still with us today, the UN for example,
and the World Bank. Accepting the Nobel Peace Prize
in 1945 for his work, Hull had this to say
about international institutions. I like this quote because it’s so
similar to what my father told me for many, many years.
To be sure, no piece of social machinery,
however well-constructed, can be effective
unless there is back of it a will and a determination
to make it work. It doesn’t matter what global
structures we devise for mutual betterment. If we do not
have the right global attitudes, they will not work.
Now, ladies and gentlemen, with the G20 necessarily focused
on the economy, there does remain, in our view,
an important role for the G8 group of nations,
the group of eight nations in non-economic matters:
in promoting democracy and development,
peace and security. In this troubled world
we clearly recognize how much else there is
that requires international cooperation. Terrorism threatens all of us. Piracy
has returned to strategic seaways. Climate change disproportionally
threatens the people least capable
of adapting to it. And although tensions between
the older nuclear states have largely dissipated, the spread
of nuclear weapons to new actors allows the world
no relief from anxiety. These are all complex,
daunting threats that cannot be met
by any one country working alone. They require the close
cooperation of friends and like-minded allies. On these,
the G8 can show leadership. As an example, let us close
with something where progress is possible if we are willing. It concerns the link between poverty
and the appalling mortality among mothers and small children
in the third world. Did you know that every year
over half a million women die in pregnancy and nearly 9 million
children die before their 5th birthday? The numbers should shock
and grieve us. Far too many lives
and futures are being lost. And to the world’s shame,
so many have been lost for want of relatively
simple health solutions all within the reach
of the international community. Often the keys of life are no
more sophisticated than clean water, widely available vaccines, or the most
basic treatment against infection. That so little has
been done is tragic. It is not just about words on a page,
it is real hunger, real suffering, real people dying. Canada takes
its development commitment seriously including those made in the G8.
That’s why, for example, we have double aid
to Africa as promised and we are on track with
our commitment to double international assistance
this year. So what is required to fight this
particular problem of human misery? It is merely the same unity of purpose
that we can find within ourselves readily enough when disaster strikes
as it recently did in Haiti, or as we can and do
when the problem is one of trade finance
or the economy. We must find that unity of purpose. That is why
as president of the G8, Canada will champion
a major initiative to improve the health
of women and children in the world’s
most vulnerable region. There are indications
that other members of the G8 share our concern and would
be receptive to such a proposal. It is therefore time to mobilize
for friends and partners to do something for those
who can do little for themselves to replace grand, good intentions with
substantive acts of human goodwill. Now in conclusion,
ladies and gentlemen, the G20 and G8 meetings,
I’ve tried to boil it all down but as you can see, they do
have before them a huge agenda all to be addressed in an
atmosphere of ongoing global, economic,
and financial uncertainty. We must bring a sense
of shared responsibility. We must be pragmatic, focused, and
above all, encourage accountability. The G20 nations must fully deliver
on the commitments they have made. The group of 8
must live at to their promises. Accountability, I believe
ladies and gentlemen, is the prerequisite
for progress. As host of the G8
and the G20 meetings this June, Canada will use its leadership,
its leadership role to focus on these challenges. And I look forward to collaborating
closely with our international partners as we continue to support
the economic recovery and chart new beginnings
for humanity worldwide. Thank you very much
for your attention.

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19 Comments

  1. Would you liberals quit whining. You guys can't even form a government wait until you can forum competent parties. Before wasting more money on another election.

  2. Left & right, liberal & conservative. Can't you all see these people are nothing but puppets put on display in an eleborate hoax called the Canadian Paliament and that nothing these jokers do actually changes anything in this country.

    If you want to know who is really in charge find out where the "government" borrows the money we are all in debt for. Remember, the hand that gives is above the hand that takes.

  3. I don't think many Canadians think the great management of the economy was due to Harper.. he's only helped create a giant deficit. As recent as 2005, Paul Martin was the PM and he believed in a balanced budget, regulation and balanced economy that didn't bankrupt the middle class.

  4. I don't think many Canadians think the great management of the economy was due to Harper.. he's only helped create a giant deficit. As recent as 2005, Paul Martin was the PM and he believed in a balanced budget, regulation and balanced economy that didn't bankrupt the middle class.

  5. I don't think many Canadians think the great management of the economy was due to Harper.. he's only helped create a giant deficit. As recent as 2005, Paul Martin was the PM and he believed in a balanced budget, regulation and balanced economy that didn't bankrupt the middle class.

  6. Scripted….more theatre…bravo…."when do we get the truth?" I know the answer to that question….never.

  7. Saved it as a bit.ly code URL
    Named it: globaltyrannysvelvetglovemodel

    I can instantly recall stuff better when I name it honestly.

    I was wishing for something more humorous for it; but witnessing a basically once-good man, watching his own fiat-paper house of illusionary cards burn ~ while his cro-magnon bro's hold their gun's to his head (lighters burning in their left paw) ~ is always a very painful activity.
    Love all.
    Thank you my honest bro Mark.
    bit(dot)ly(slash)3000yoSecret

  8. "When Canada holds the G20 and the G8"…you will watch as innocent Canadian protestors are beaten down on public streets by our riot police after provocateurs have done their role, as an example of my power in my country as leader.

  9. @Neurolanis Well said, there's more truth to your statement than anyone in the media or general public would care to admit.

  10. This all so much window dressing.
    The G8/20 are groups whose main aim is to sink all of us dupes/slaves into plutocratic system.
    As this system advances its agenda, their methods become more obvious, look at your government and how corporate lobbyists influence or manipulate all economic decisions our respective governments make.
    Stephen Harper doesn't have a hidden agenda-he's carrying out the wishes of corporations,banks and big oil.

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