On the world economy, first of all, while remaining vigilant, there was a strong sense of common purpose. We agreed on a common course of action to maintain the conditions for stability and growth in the world economy. Indeed, we are agreed on the contributions that each of our continents should make. In the United States, actions are under way to strengthen corporate governance, accounting, and auditing. In Europe, we agreed that further reforms in labor and product markets are needed. In Japan, we agreed that banking and corporate restructuring should be vigorously pursued. We are now more than ever aware of our interdependence and that it is only by each country taking necessary action that we shall secure the economic growth we wish to see.
Second, on the world economy, particularly on the problem of emerging markets, we are agreed on the need to strengthen the mechanisms for crisis prevention and crisis resolution. On crisis prevention, we agreed on the need for increasing integration into IMF surveillance of codes and standards, and in particular of the importance of enhanced standards and principles on corporate governance, accounting, and auditing, and of stronger national practice.
On crisis resolution, where we had a discussion during the course of this morning and at lunch, we agreed to continue to work together on a two-track approach for the official community, the private sector, and sovereign debt issues to continue to work together to develop collective action clauses, and we called on the IMF to develop a concrete proposal for consideration at our next meeting of a statutory sovereign debt restructuring mechanism (SDRM).
Third, we are united in our belief that, at this time of economic recovery, there is an imperative to shape a new deal between developed and developing countries so that all countries can share in the benefits of globalization. Specifically, the committee has reaffirmed its commitment to the full financing of the Heavily Indebted Poor Countries (HIPC) Initiative. We noted that the financing shortfall in the HIPC Trust Fund could be up to $1 billion and called on donor governments to make firm pledges and contributions as a matter of urgency. Over the past two days, 15 countries have pledged support, and I expect further announcements to be made in the coming days.
Finally, we are united in our belief in the importance for global growth and effective development of achieving substantial trade liberalization at the Doha Round of multilateral trade negotiations. We are agreed on the need for urgent progress in enlarging market access for developing countries and phasing out distorting trade subsidies in developed countries. Today we are setting a common course of action. We enter a period of implementation in a broad program of reform in our international institutions as well as in domestic economies. Indeed, there was strong agreement that it is only through international cooperation based on common purpose that we will maintain the conditions for stability and growth that will ensure that the benefits of global prosperity are shared by all. I think that the IMF—its staff, Executive Board, and management—can take this meeting as an endorsement of its stance and as encouragement to continue with the ideas and the work program that have been defined. And, very important, I sense from this meeting that there is cohesion in the international community to face the challenges and find appropriate responses.
This bigger context also makes clear that the SDRM will not undermine the credit culture in the global economy—that is, credits have to be paid back. It is a last resort and fills a gap in the financial architecture. Among the specific questions we are working on, the most important is to make clear how the decision making about collective action is organized. Our suggestion is that the sovereign debtor and the super-majority of creditors make this decision, not the IMF. Second, we need to go into detail on the kind of dispute settlement that we organize. Our idea again is that it is not the IMF that is in this business, but a small group of independent, very experienced experts. Third, we need, of course, to sort out further the scope of the debt involved in a restructuring operation. We need to discuss with the Paris Club, for instance, how official bilateral debt is handled in this. The IMF has a lot to do and there is a lot of further discussion. I look forward to putting forward to the IMFC something for further consideration after more hard work.
I expressed my confidence that Brazil will see a smooth transition because of facts. First, this country has a huge potential for growth, job creation, and trade. Second, this country has, in principle, seen in the past year a remarkable improvement in its economic, financial, and monetary fundamentals. The endorsement by the major candidates of the crucial elements of the IMF work program with Brazil is, for me, a further confirmation that the most likely outcome of this will be a smooth transition and that Brazil will come out of this situation without a debt restructuring because it has the potential for growth and servicing its debt.
I also made clear that the governors have endorsed that the IMF should be part of the process of monitoring the achievement of the development goals.