FEAR of a 2008-style financial catastrophe is holding back the global economic recovery but investors must show more confidence, Canada’s Prime Minister Stephen Harper said on Wednesday (November 7).
Businesses worldwide want to invest but are “holding back because they fear something strange and unexpected could happen”, the Canadian leader said in speech inaugurating the Indian World Economic Forum in New Delhi.
“What worries big actors in the world is the fear there will be some kind of catastrophic event as happened in 2008 that will send everything into a tailspin,” said Harper, who is on a six-day visit to India.
“We can’t get over the overhang” of the financial crisis which followed the collapse of US investment powerhouse Lehman Brothers, Harper said in his speech to the two-day forum.
“That continues to restrain the global recovery,” he said, but added that financial decision-makers should be more confident.
“Don’t worry about today’s uncertainty – look at the opportunities over the medium term,” said Harper, noting this was the strategy pursued by Canada whose growth is the best among the Group of Seven leading industrialised nations.
There are signs of increasing global protectionism like that which hampered recovery from the Great Depression in the 1930s, he said, “but it is not an avalanche – it is not yet something to panic about”.
“Most leaders get it on the big picture – I am still optimistic we will avoid catastrophe,” the Canadian leader said.
However, it was clear that a comprehensive deal in the Doha round of world trade talks was out of reach for now and Canada instead was pursuing multilateral and bilateral trade deals with countries such as India, he said.
Canada expects to conclude a free trade deal with India next year, he said.
Harper’s speech came a day after the two countries clinched an agreement opening the door to Canadian exports of uranium and other nuclear supplies to the energy-hungry South Asian nation.
The pact ends almost 40 years of awkward relations after India used Canadian nuclear technology to stage its first atomic test, and allows Canadian uranium to be used to power Indian reactors.
