President Arroyo on late Saturday night called for the expansion of the Group of 7 (G-7)—composed of seven of the world’s wealthiest economies—to a “G-20 or even a G-30” to include representatives from poor but resilient economies that can provide a fresh perspective in resolving the global financial crisis.

Mrs. Arroyo made the pitch at a plenary session of the 2009 Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, where she also prescribed a fundamental     

reform of global financial regulation and the completion of the Doha round of trade talks when asked for the best approach to jump-start the economy.

“First, we need a fundamental reform of the global financial regulation. Number two, Doha must be completed and that is where the interest of the developing countries can take their rightful place in the global structure of the economy. Third, the G-7 must expand into a G-20 or even a G-30,” she said.

The G-7 groups Canada, France, Germany, Italy, Japan,the United Kingdom and the United States.

The President stressed that efforts must be made to ensure that any necessary “radical change” to deal with the global economic crisis “is not on the back of those who can least afford it.”

Trade officials attending the Davos gathering urged the Group of 20 countries (G-20), which counts the Philippines as a member, to accelerate the conclusion of the Doha round of negotiations at the World Trade Organization (WTO).

Trade officials and academic experts said finishing the long-stalled Doha round of multilateral trade talks is the single-most valuable step global leaders can take to keep the current economic crisis from triggering a destructive protectionist backlash.

However, as governments struggle to contain the economic aftershocks of the financial meltdown in developed world credit markets, there is a real risk that steps taken to reflate domestic economies—such as support for troubled automakers or public lending programs that favor local borrowers—could contribute, intentionally or not, to the alarming contraction in world trade volumes, participants warned.

A case in point: the fiscal-stimulus bill recently passed by the US House of Representatives, which requires that steel used in any infrastructure funded by the package be manufactured in the United States. Although the measure still must be approved by the US Senate and signed into law by President Obama, it represents an alarming indication of the political stresses that threaten the multilateral trade order, participants said. (See separate story on Page B7.)

“We see more and more signs that these protectionist measures in developed countries…fall within some sort of ideology of economic nationalism,” commented Celso Amorim, Minister of Foreign Relations of Brazil. “This could bring us back to the 1930s again.”

Many economists blame a round of tariff increases triggered by the US Smoot-Hawley Act, for greatly worsening the Great Depression.

By closing out the Doha negotiations and committing to shepherd an agreement through their respective national parliaments, the G-20 could provide a concrete demonstration that their commitment to cooperation and coordination to fight the crisis is more than just an empty promise, participants said.

“It would send the right signal of confidence that people have realized that this is something they need to do together as part of their reaction to the crisis,” said Pascal Lamy, director general of the WTO.

Talks meant to jump-start the stalled Doha round of negotiations last year ended in a gridlock after India, a G-20 member, insisted on special safeguards that will allow poor countries to impose extra duties on excess farm imports.

Lamy said all indications he has received suggest that the G-20 leaders are serious about their commitment to the Doha round. Doris Leuthard, vice president of the Swiss Confederation and federal councilor of economic affairs, echoed this assessment.

Leuthard, however, cited the extreme political difficulty of seeking further trade liberalization at a time of rising unemployment in the developed world—particularly since the Doha round will not address issues such as labor standards and environmental protection that enjoy broad popular support.

As for the status of the Doha negotiations, Lamy expressed optimism that talks could be concluded quickly if the political will to do so exists. He estimated that 80 percent of the terms of an agreement have been settled, although highly contentious issues, such as agricultural subsidies in the developed world, anti-dumping rules and industrial subsidies, still need to be resolved.

Mrs. Arroyo expressed optimism that the G-7, whose finance ministers meet several times a year to discuss economic and fiscal policies that affect the rest of the world, can afford to expand its ranks even with the financial problems besetting its member-economies.

Asked whether she was optimistic that the G7 can move to a “G-20 regime” given the former’s current problems, the President stressed that adequate representation of developing economies in the group would generate helpful “new ideas” and would ensure that the poor would be considered in solutions to the global crisis.

“We must even go beyond the G-20 because we need to have represented in the coordinated policymaking of the world, diverse kinds of economies. Because if we don’t have these diverse economies represented on the table, then perspective could be lost, and new ideas would not be gained,” she said, reiterating her pitch for a G-30.

She added that “it is ironic that the developing countries now are doing better than the developed countries and yet if they will not have a say in structuring the world economy, that’s really wrong. “

“So we need to have the developing countries represented in a bigger way. They have something to share. How were they able to keep their countries resilient—they have that to share,” she said.

Lamy, meanwhile, rejected suggestions that the WTO secretariat should consider enforcement action in response to industrial subsidies or national content measures that appear to violate the WTO treaty.

“Those who suggest such things should go back and look at the books,” Lamy said, noting that the WTO process requires that member-countries initiate trade actions by seeking consultation followed by enforcement of action.