The world today is experiencing turbulence unlike anything we've seen in decades. The U.S. credit crisis has contaminated the international economy, and financial systems have been shaken to the core, undermining economic doctrines once treated as absolute truths. (Story continued below...)
As I told the U.N. General Assembly in September, now is the time for politics, for governments to use public control and oversight to halt the economic anarchy. I welcome the actions that other countries have taken. But it will be some time before their initiatives kick in. That means more steps are needed in the meantime to safeguard the world's most vulnerable: workers whose jobs and purchasing power are on the line, simple folk trying to save for the future, the poor who depend on the state.
The abuses and errors coming to light daily are all evidence that our existing system of international economic governance has broken down. To develop a better one, the world's major developing countries should be called on to join the debate. We have plenty to contribute. Take Brazil. We are ready to do our part, and our economy is better prepared than most to confront the crisis. We have said no to macroeconomic adventurism. Inflation is under control and we are growing steadily. We have plenty of foreign reserves and owe nothing to the International Monetary Fund. This gives us the tools and the peace of mind to withstand the turbulence the crisis will bring.
Brazil is also better prepared to deal with the social and economic dislocation that may ensue. Consider: since I took office in 2003, more than 10 million Brazilians have joined the workforce. Some 20 million have risen out of absolute poverty. Our internal market is expanding, giving us an important economic cushion. Above all, we are redistributing income and reducing social inequality. These advances have nothing to do with luck or a favorable environment. They are the result of hard work by the Brazilian people and their government.
Weaving a broad social safety net is a central part of this endeavor. Our income-transfer program now distributes benefits to 11 million poor families nationwide, on the condition that mothers get prenatal care and parents keep their children in school and vaccinated. Our success shows that individual governments can and must play a vital role in reducing poverty and inequality. And our example in health care and education is already being made available to other countries in Latin America, Africa and Asia facing similar challenges.
That said, no state will escape this crisis on its own. Coordinated actions are needed. Yet they will succeed only if international decision making is redesigned in accordance with new realities; the institutions set up after World War II reflect a balance of power that's long been superseded. This challenge actually goes far beyond the immediate financial storm. Other threats loom, such as hunger and poverty, the rising price and scarcity of food, the energy crisis and climate change. World commerce remains distorted, and the best means of addressing that—the Doha round of trade talks—could collapse.
Still, none of these obstacles is insurmountable. We all know the solutions, and we have the tools and the resources to succeed. Too often what we lack is political will. Many people today are comparing our current situation with the Great Depression. But we should take those parallels further and should summon the spirit of solidarity that helped create the New Deal, harnessing it to forge a new global pact to roll back poverty and extreme inequality. Contrary to what so many believe, globalization has only increased the economic and social responsibilities of governments. We must renew our commitment to strong multilateralism and we must make that multilateralism more democratic, in order to build agreements that reflect the legitimate interests of all nations. This means, among other things, enlarging the U.N. Security Council and revamping the IMF to provide effective financial support to countries in need.
The United States—by virtue of its size and its economic prowess—is and will continue to be a key player in the global search for common solutions. Washington has played such a decisive role since the end of World War II. Given the challenges and opportunities facing us today, we in the developing world hope that we can once again count on the American people to come to the defense of multilateralism, equality and justice. This is not the time for protectionism, but for progressive action born of generosity and solidarity that will forge collective answers to 21stcentury challenges.