Brazilian president Luiz Inácio Lula da Silva joined the leaders of Mexico and Argentina in the framework of the G-20 summit in Korea to call on rich countries for a commitment to end the “currencies war” and ensure balanced growth out of the current crisis.
“Developed countries must increase their domestic demand, in contrast with US policy which is geared to promote domestic demand in developing countries,” said Lula in Seoul warning that if rich countries don’t increase consumption instead of promoting exports, “we’re heading for a major global collapse.”
“We can’t make decisions only thinking about us, without considering the impact on other smaller countries and with more fragile economies”, said Lula da Silva who is in Seoul with president-elect Dilma Rousseff.
The Brazilian president has been particularly critical of US policy and of China’s monetary and trade stances.
“That’s the easy way out of the crisis, forget the rest, but you can be sure we will end up bolstering protectionism,” underlined Lula da Silva.
Argentine president Cristina Fernandez addressing a business forum said that a currency war only pushes the crisis “from one country to another” and called for cooperation between rich and emerging countries.
“It seems absurd to put all the blame on the financial sector when we are facing a structural crisis in which capital privileges financial speculation over production,” said the Argentine president who added that “better than prescribe solutions” what is needed is to identify the real causes that led to the current situation.
Mexico was not so affirmative on the currencies issue, although rejecting “artificial devaluations” it favors a system that blends market conditions with “macroeconomic fundamentals” of each country.
Mexico that will host the G-20 in 2012 also asked for moderation in fiscal misbalances since they are “a great impediment for growth”.
However Mexico will be more interested in giving an advance of the UN Climate Change summit scheduled for the end of the month in Cancun.
“It’s essential to address the G20 leaders since they represent almost 80% of world GDP and the countries most responsible for carbon dioxide emissions,” according to Mexican sources.
“We are at a crucial point: we adapt to a way of life that stops climate change or global warming with permanently alters our way of life”, said President Felipe Calderón.