WASHINGTON, DC – Roughly one year ago, the global economic situation looked grim: a severe global recession, sizeable wealth destruction, and declines in trade and employment. But a disaster of “Great Depression” proportions was averted, thanks to unprecedented economic-policy coordination by governments around the world. Continued cooperation, one hopes, will be the legacy of this crisis.
The global economy is now on a recovery path, albeit uneven, and financial conditions have improved substantially. Clouds of uncertainty linger, however, and there is much unfinished business.
Indeed, the work needed to build a more robust, stable, and safe global financial system has only just begun. Moreover, the recovery is not global, unemployment is still rising in most countries, global savings imbalances have not been addressed, and conditions in the worlds’ poorest states remain vulnerable. These issues have broad implications for global stability and peace. Remember, economic stability lays the groundwork for peace, while peace is a necessary precondition for trade and sustained economic growth.
In the annals of economic crises then, where do we find ourselves? In policy terms, we are at a critical point where fundamental changes to the system can be made, in part because our collective memory is sufficiently fresh to supply the necessary political will. We must not waste this opportunity.