• Dangerous games

    Employers' body Neasa is playing a potentially dangerous game, says Terry Bell.

  • Rational thinking

    All players should first consider the net result of their actions, says Leopold Scholtz.

  • Telkom's property poser

    BEE may be hindering Telkom's plans to offload redundant real estate, says Gugu Lourie.

Data provided by iNet BFA
Loading...
See More

Business leaders cry for G20 action

Jun 18 2012 16:39 Reuters

Related Articles

G7 agrees to closely monitor euro crisis

IMF poised to secure $400bn

Brics to flex muscles at G20-IMF meeting

Unions challenge G20 to invest in green jobs

G20 may boost IMF coffers by $400-500bn

Leaders urge investment for poor

 

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 gloom.

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 financial crisis.

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 prophecy."

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."

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

No need to keep up with the Joneses

Fin24 users provide their own personal tips on how to save money instead of trying to keep up with the Joneses.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...