Los Cabos, Mexico - Top business
executives are urging world leaders to show more urgency in
addressing economic malaise or risk an even deeper global crisis
than in 2008-2009.
CEOs and senior executives from about 350 companies,
including Nestle, Zurich Insurance Group and
Walmart Stores, pushed leaders at a Group of 20
summit in Mexico to take firm measures to lift the economic
Jean-Guy Carrier, head of the International Chamber of
Commerce (ICC) business lobby group, said the economic
uncertainty was affecting companies "in quite a dire way".
"For the people we talk to, small and medium-sized or large
companies involved in trade, the instability is just scaring
them," he told Reuters at the summit on Sunday.
"It's having a pretty deleterious effect on the global
economy because these companies, a lot of them say we have plans
for expansion and plans for investment but we put them on hold...
"Replicate this thousands of times in companies across the
world and it is one source of investment, growth and jobs which
is not happening."
Slowing growth in China and Brazil, fiscal tightening ahead
in the United States and a stalling in trade negotiations all
meant the economic outlook was already tougher than it was in
2008, he said, calling for G20 countries to send a signal that
they understand the severity of the situation.
The ICC gave G20 members a must-do-better score in three of
four major areas in a scorecard measuring progress since the G20
became a key global policymaker in 2008, at the height of the
The head of the world's biggest wind turbine maker, Vestas, said although there had been no dramatic, 2008-style
crash, business conditions have deteriorated since August 2011
when the United States was struggling with budget negotiations
and was downgraded by Standard and Poor's.
"Last week I spoke to some of the largest pension funds in
the world, who are very interested in making infrastructure
investments, but they are concerned about doing investments
because of regulatory uncertainty," CEO Ditlev Engel said.
"If people are holding back, it becomes a self-fulfilling
Vestas itself is struggling with one aspect of US budget
policy: the decision to let a tax credit for renewable energy
expire at the end of 2012.
The company says it may have to cut 1 600 US jobs, almost
half its US workforce, as a result of the change, with a
decision due in the third quarter. It also announced plans in
January for 2 335 job cuts in Europe.
McGraw-Hill Companies chief executive Terry
McGraw said a clear signal from the G20 that countries would
pull together to tackle the problems, as they did in 2008 and
2009, would help reassure the business community.
"I hope that the signals from this G20 will be 'what we were
doing is not working and we are going to change it'," said
McGraw, whose conglomerate includes ratings agency S&P.
Carrier from the ICC said it was crucial for G20 countries
to bolster the resources of the International Monetary Fund so
that it can help out countries hit hardest by the crisis.
Mexican President Felipe Calderon said on Saturday it was
possible extra IMF funding would exceed the $430bn agreed
on in April but Brazil, China, India, Russia and Mexico itself
have not yet committed to specific sums.
"If they actually come to an agreement to... bring the
level of funding up, that's money that's talking, it's not just
a promise," Carrier said.
"This is why the G20 exists. No single
country can deal with this by itself."