PM seeks “new global order”
By Alex Stevenson
Gordon Brown has called for the creation of a “new global order” and action to avoid “financial mercantilism” in a speech.
The prime minister demanded radically increased global cooperation in a bid to deter banks from sitting on their funds rather than lending – a vital shift needed to end the credit crunch affecting the world economy.
Mercantilism in its traditional historical sense views the supply of capital in the world as being fixed – and that countries should use protectionist policies to secure as much of this wealth as possible.
Mr Brown argued it is vital to prevent “a new form of financial mercantilism of retreat into domestic lending and domestic financial markets”.
He warned the crisis could start a “retreat from globalisation” by closing markets – but that this would reduce global growth and leave millions suffering in poverty.
The alternative, he added, is viewing the current situation as the “difficult birth-pangs of a new global order”.
Mr Brown said: “Our task now is nothing less than making the transition through a new internationalism to the benefits of an expanding global society – not muddling through as pessimists but making the necessary adjustment to a better future and setting the new rules for this new global order.”
The speech comes at the beginning of a busy week for the prime minister. He is expected to meet the prime ministers of China, Korea and Japan, as well as World Bank president Robert Zoellick, as he discusses preparations for the G20 meeting in London in April.
