Pacific Rim nations assured the world Sunday that the global financial crisis can be quelled in 18 months, but provided few details of how they expect that to happen — or how their governments can help.
The 21 economies, which represent more than half of the world’s productive power, also pledged during a two-day summit not to erect new protectionist barriers for the next year, and to jump-start stalled World Trade Organization talks.
The main accomplishment of the Asia-Pacific Economic Cooperation forum was a widening of support for the Washington Declaration made last weekend by major economies that pledged to maintain free trade despite pressures to protect domestic industries.
The leaders voiced confidence that the crisis could be resolved by mid-2010, though they did not go much beyond the steps outlined in the Group of 20 summit in Washington.
“We are convinced that we can overcome this crisis in a period of 18 months,” the leaders said in a statement. “We have already taken urgent and extraordinary steps to stabilize our financial sectors and strengthen economic growth.”
The reassuring words were added early Sunday to a declaration the leaders had signed off on the previous day. Delegates from several countries said the changes were made overnight at the request of the summit’s host, Peruvian President Alan Garcia.
“We have agreed that this meeting produce a clear and firm statement that breaks the vicious cycle of anguish and uncertainty,” Garcia said Sunday. “We — united as the world’s peoples, governments and businesses — are going to beat the crisis.”
The 18-month timeline fits with a calculation by the International Monetary Fund, which forecast developed economies would grow barely 0.1 percent in 2009, and that the world would emerge from the crisis the following year.
But some delegates and analysts were skeptical that the timetable was much more than wishful thinking, and some leaders distanced themselves from the language. Mexican President Felipe Calderon described the date as more of an estimate than a prediction.
Canadian Prime Minister Stephen Harper went a step further.
“I think it would be speculative to commit to that kind of timeline,” he said.
And Dan Price, an aide to George W. Bush, said the U.S. president thinks the global economy can be fixed even faster.
“That particular sentence was added by the president of Peru as the chair,” Price said aboard Air Force One. “Certainly, some in the region may think that recovery may take 18 months. President Bush believes that the actions we are taking now will begin to produce results in the much nearer term.”
Vinod Aggarwal, director of the APEC Study Center at the University of California-Berkeley, said the timeline was useful in sending a signal to markets.
“I don’t think it will make that much difference, but I don’t think it hurts,” he said.
More important, he said, was the leaders’ agreement to send ministers to Geneva next month to jump-start the so-called Doha round of World Trade Organization talks. Concern over the global financial crisis has injected new urgency into the negotiations, which collapsed in July.
In their final declaration, the APEC leaders said they were deeply concerned about instability in food prices, were committed to battling corruption and piracy, and supported “decisive and effective long-term cooperation” to combat climate change.
The leaders called for greater APEC participation in the IMF and other multilateral lenders. Japan said last week it was ready to lend up to $100 billion to the Washington-based organization, but China has so far resisted entreaties to dig into its $1.9 trillion in reserves.
The summit could be the final foreign trip for George W. Bush as U.S. president. Barack Obama replaces him on Jan. 20, and delegates in Lima said there was little incentive to propose more concrete action without Obama’s presence.
Obama, who did not send representatives to Lima, pressed forward back home, announcing a plan to save or create 2.5 million jobs by the end of 2010 and preparing to introduce leaders of his economic team on Monday.
Harper said he expects Canada to officially enter recession by the New Year and is studying a financial stimulus package.
“If it is necessary for there to be government spending to bolster domestic consumption and stimulate investment markets, we will undertake those measures,” he said.