GENEVA — The heads of 11 major international agencies called on world leaders Friday to avoid making financial cutbacks that could endanger long-term economic growth and employment.
Governments should ensure that banks keep lending to businesses, laid off workers have social safety nets and youth unemployment is tackled, the agency heads said in a joint message to leaders making their way to the global political and economic elite’s annual gathering in Switzerland next week.
The call came from the chiefs of global bodies such as the International Monetary Fund, the Organization for Economic Co-operation and Development and the International Labor Organization.
"This call to action matters because it goes beyond immediate problems and presents a blueprint for stronger growth, by ‘going structural,’ ‘going green’ and ‘going social,’" said Angel Gurria, who heads the Paris-based OECD.
"We cannot go back to a model that delivered unequal and unsustainable growth. We need to make sure that we generate a recovery with ‘all aboard,’" he added.
Other members of the self-titled Global Issues Group that signed the call include the head of the World Bank, Robert Zoellick, and World Health Organization chief Margaret Chan.
Short-term measures urged by the officials, most of whom will be attending the Jan. 25-29 World Economic Forum in Davos, include bolstering ailing banks, supporting the European government bailout fund EFSF, and making job promotion an objective of any budget cuts.
Public-private partnerships, in which companies take on tasks previously done by governments, should be engaged in "without adding to future deficits," the group said.
Addressing youth and long-term unemployment, both of which some economists warn are rising sharply, should also be a priority, they said.
In the medium to long term, governments should focus on implementing planned reforms to the global financial system and boosting green growth, the agency heads said.
The appeal also called on the Group of Eight leading industrial nations to follow through on their pledge last year to support democratic renewal in the Middle East and North Africa.
