World’s leaders descend upon Mexico for G-20 summit
The attention of the world was focused on Los Cabos, Mexico last week as leaders of the world’s 20 largest economies descended upon the Mexican resort town for the yearly G-20 Summit.
The Mexican Presidency of the G-20 Summit marked the first time that a Latin American country has hosted the summit.
Two very different paths emerged from the summit, which took place under the cloud of the euro crisis – continuing down the politically unpopular path of austerity or spending more to try to stimulate growth. The UK delegation, led by PM David Cameron, came down decisively on the side of austerity, joining fellow conservatives such as German Chancellor Angela Merkel and South Korean President Lee Myung-bak.
President Lee Myung-bak said:
“The countries in crisis will have to find measures that might be painful and politically unpopular in the short term, but nonetheless they must pursue this path.”
However, not all were in agreement that decreased spending is the way forward. Left-leaning delegations such as France, Brazil and Argentina opposed austerity measures, believing that increased government spending is needed to stimulate lagging European economies.
Ironically, the discussion of the euro crisis in Los Cabos, Mexico came during a time of good news for the Mexican economy. Mexican factories are exporting more goods than ever, buoyed by the strengthening U.S. economy and strong trade ties to its northern neighbour. In contrast to the euro zone discussion, the Mexican economy has seen 17 years of stability, low inflation and ever-increasing competitiveness. Last year, the Mexican GDP outpaced Brazil 3.9 per cent to 2.7 percent, and Mexico remains the second-largest economy in Latin America.