While the global economy has slowed more than expected over the past year, sound economic policies and fundamentals provide a solid foundation for stronger growth. We will remain vigilant and forward looking in implementing measures, as necessary, to ensure that our economies move toward a more sustained pattern of growth, in line with their potential. We pledge to pursue policies that will contribute to global growth by enhancing strong productivity growth in a sound macroeconomic environment, through structural reform, free trade and strengthened international economic cooperation.
In the United States, while growth has slowed sharply, long-term trends remain favorable. Markets are dynamic and flexible, and both monetary and fiscal policies are being actively employed to support recovery, while maintaining price stability. The recently enacted tax cuts should bolster growth.
In Canada, tax cuts and monetary conditions are supporting growth, while structural policies should continue to be aimed at increasing productivity. In the United Kingdom, where the slowdown appears moderate, policies should continue to strengthen the foundations for sustained growth and employment over the medium term, and meet the inflation target.
In the euro area, although economic activity has weakened, growth prospects remain favorable. Tax cuts, as well as structural reforms aimed at further increasing employment, should continue to support sustainable noninflationary growth. The steady implementation of economic reforms will contribute to further raising the potential for growth.
In Japan, economic activity has further weakened, and prices continue to decline. Against this background, monetary policy should keep providing ample liquidity. Vigorous implementation of financial and corporate sector reforms is needed to lay the foundation for stronger economic growth over the medium term. We welcome the recently announced reform initiatives, which will contribute to this end
Emerging market economies are unevenly affected by global economic developments. Growth rates in some countries have slowed toward a more sustainable rate, while in others they have decelerated sharply. We welcome the progress achieved in many countries in increasing their resilience against potential crises and the steps taken over the last year to strengthen the international financial system to better prevent crises. However, recent developments in emerging markets point to the need for further progress in reinforcing domestic financial systems and the underlying fiscal positions. Recent measures taken in Argentina and Turkey represent positive steps in this direction. We commend these efforts and encourage the continued implementation of their reform programs in close collaboration with the IMF and other relevant international financial institutions.
High and volatile oil prices are a concern for the world economy, in particular for the most vulnerable developing countries. Increased and diversified energy supplies, improved energy efficiency, expanded infrastructure and stable oil markets are important objectives.
Launching a new trade round
Sustained economic growth worldwide requires a renewed commitment to free trade. Opening markets globally and strengthening the World Trade Organization (WTO) as the bedrock of the multilateral trading system is therefore an economic imperative. It is for this reason that we pledge today to engage personally and jointly in the launch of a new ambitious round of global trade negotiations at the Fourth WTO Ministerial Conference in Doha, Qatar, this November.
Strengthening the global financial system
Increasing global growth and prosperity depends crucially on a sound and stable international financial system. We are united in our determination to continue to strengthen it to prevent financial crises, to limit the impact of those that inevitably do occur, and to tackle financial abuses.
Since the Okinawa Summit, a number of important steps have been taken, including measures increasing the effectiveness of crisis prevention by reinforcing IMF surveillance and encouraging the implementation of the key international codes and standards; involving the private sector in crisis prevention and resolution; streamlining and reforming IMF lending facilities; and enhancing IMF transparency and accountability. These efforts should be maintained.
Looking forward, we endorse our finance ministers’ recommendations for action to further strengthen the international financial system and their commitment to foster international consensus in this endeavor. In particular, the international financial institutions and the Group of Seven countries should stand ready to help countries adopt the policies required to ensure sustained access to capital markets. We also support our finance ministers’ suggestions to further develop the framework for private sector involvement.
We reaffirm our support for the multilateral effort against abuses of the global financial system and endorse our finance ministers’ recommendations to address this challenge. We welcome the efforts several jurisdictions are making to address weaknesses in their anti–money-laundering regimes. We endorse the recent Financial Action Task Force decisions de-listing four jurisdictions and recommending the adoption of additional countermeasures against the most uncooperative ones if they do not take appropriate action by September 30, 2001. The international financial institutions have an important role in helping jurisdictions improve their anti-money-laundering regimes and we urge them to step up their efforts in this regard. We encourage progress in assessing adherence to supervisory and regulatory standards in offshore financial centers. We look forward to the 2001 OECD progress report on harmful tax practices and support the work, as envisaged by our finance ministers, aimed at addressing such practices. We ask our finance ministers for further work in these areas.
The enhanced HIPC Initiative we launched in Cologne aims to increase growth, reduce poverty, and provide a lasting exit from unsustainable debt by reducing debt on the basis of strengthened policy reforms. We welcome the important progress achieved in implementing the Initiative. At Okinawa, 9 countries had qualified for debt relief. Now, 23 countries are benefiting from the Initiative, with an overall amount of debt relief of over $53 billion, out of an initial stock of debt of $74 billion. This will significantly reduce their debt service, thus freeing resources for social sector expenditure, in particular education and health.
We have all agreed as a minimum to provide 100 percent debt reduction of official development assistance and eligible commercial claims for qualifying HIPC countries. We urge those countries that have not already done so to take similar steps, and we underline the need for the active and full participation of all bilateral creditors in providing timely debt relief to HIPCs.
We encourage HIPCs that have not yet reached their decision point to quickly undertake the necessary economic and social reforms, including the development of a strategy for overall poverty reduction in cooperation with the World Bank and the IMF. Economic, structural, and social reforms, improved governance, and a strengthened ability to track poverty-reducing expenditures are necessary to ensure the maximum benefit of debt relief. In particular, we call upon those countries involved in military conflicts to lay down their arms, and implement the necessary reforms. We confirm our willingness to help them take measures needed to come forward to debt relief. We pledge to continue working together to ensure that the benefits of debt relief are targeted to assist the poor and most vulnerable.