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LIMA, Peru — The financial crisis threatening to plunge the world into recession can be overcome by mid-2010, Pacific Rim leaders said Sunday as they wrapped up a two-day summit.
“We are convinced that we can overcome this crisis in a period of 18 months,” the 21 leaders said. “We have already taken urgent and extraordinary steps to stabilize our financial sectors and strengthen economic growth.”
The words of confidence were added early Sunday to a joint declaration that the leaders of the Asia-Pacific Economic Co-operation forum originally issued on Saturday. Delegates said the changes were made at the request of the summit's host, Peruvian President Alan Garcia.
The timeline fits with a calculation by the International Monetary Fund, which forecast developed economies would grow barely 0.1 per cent in 2009, and that the world would emerge from the crisis the following year.
Chile's President Michele Bachelet chats with Prime Minister Stephen Harper as they take part in the Asia-Pacific Economic Cooperation (APEC) summit retreat II in Lima on Sunday. Asia-Pacific leaders and the OECD, a forum of the rich nations, have sought to ease extremely tight trade credit for export-driven regional economies amid financial turmoil. (MANDEL NGAN/AFP/Getty Images)
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Given the unpredictability of current market gyrations, some in Lima where skeptical about the stated confidence the leaders had in an 18-month solution. A senior staffer of one country's delegation burst into laughter when pressed for details about how the leaders knew they could accomplish it.
The leaders also added language to the statement saying they would 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.
The 21 APEC members, who represent more than half the world's economy, are struggling to restore confidence in the world's ailing financial system by declaring their opposition to new trade barriers.
They endorsed a blueprint worked out at a summit of top economies in Washington, including a pledge to resist domestic pressures to protect industries, but stopped short of major new proposals to ward off a global recession.
A draft of a broad statement to be issued at the close of the summit Sunday said the nations were deeply concerned about instability in food prices, were committed to battling piracy, and supported “decisive and effective long-term co-operation” to combat climate change. Two delegations provided the draft.
While such summits have in the past focused on a grab bag of issues, this year's meeting in the Peruvian capital has been dominated by the world's economic meltdown. A credit crunch in the United States has roiled global markets and dragged part of the world into recession.
The leaders called for greater APEC participation in the International Monetary Fund and other multilateral lenders. Japan said last week it was ready to lend up to $100-billion to the IMF, but China has so far resisted entreaties to dig into its $1.9-trillion in reserves.
The summit was expected to 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 Mr. Obama's presence.
Mr. Obama, who did not send representatives to Lima, announced a plan to save or create 2.5 million jobs by the end of 2010 and prepared to introduce leaders of his economic team Monday.
