The global economy is at an "historic juncture", the former British Prime Minister Gordon Brown said in Abu Dhabi on Monday.
Brown, who was speaking at the World Economic Forum's Summit on the Global Agenda, said the world was facing a "new but avoidable downturn" and warned of the perils of protectionism.
"We need a global growth pact and coordination between different countries across the world. It is important to preserve the balance between those [nations] who consume but do not produce and those who produce but do not consume," Brown said during the summit's opening session at Yas Marina Circuit.
"We are at an historic juncture in the global economy. The majority of the world's output, trade, investment and consumption now comes from outside of Europe and the United States. The West used to monopolise consumption and production but the world is changing; the forces of globalisation have changed," he added.
Brown, who stepped down as Prime Minister in May last year, also warned against the dangers of protectionism, an economic policy that is based on the concept of restraining trade between countries.
"We are facing a new but avoidable global downturn. We either cooperate together to deal with the economic problems [facing the world] or we face a disorderly retreat into protectionism," Brown said.
"In the last few weeks alone we have seen Brazil impose tariffs and we have also seen currency interventions and the deleveraging of banks, which is resulting in a kind of protectionism in the banking system. There is a danger that we do not learn from the protectionism of the 1930s, which resulted in the loss of so many jobs. We must avoid protectionism; we must now ruin the changes of successful globalisation," he added.
The public debt crisis emerged as the top trend likely to impact the global economy in the next 12 to 18 months, according to a survey of the World Economic Forum's Global Agenda Councils released yesterday. The Eurozone in particular has been at the centre of the global news agenda in recent months as ministers try to prevent contagion of the bloc's sovereign debt crisis spreading to other debt-ridden nations.
"The problems in Europe have formed the epicentre of the debt crisis. Europe not only has a fiscal problem but a growth problem and a competitiveness problem. The banks have to be recapitalised, which will have ramifications for the whole world," Brown said.
"We used to talk about shared problems, and then we talked about common problems. Today, it is more relevant to think about a category of problems that are global [in nature] and cannot be resolved without people coming together from different nations and working towards a solution," he added.
