Pre-Summit Statement by G8 Finance Ministers
St. Petersburg, June 9-10, 2006
We met and discussed today a number of global economic issues in preparation for the annual Summit of G8 Heads of State and Government in St. Petersburg. We also had productive discussions with colleagues from Australia, Brazil, the People's Republic of China, India, the Republic of Korea and Nigeria.
1. Global growth remains strong and is gradually becoming more broadly based. However, downside risks from high and volatile energy prices and widening global imbalances remain. We underline that global economic adjustment is a shared responsibility and re-iterate our commitment to address global imbalances. We are committed to fighting protectionism and to promoting liberalization of trade in agriculture, industrial goods and services, as well as of investment. We agreed on the importance for global growth of an ambitious outcome from the Doha Development Round and recognize that urgent progress is needed for its achievement. Many developing countries also need substantial aid for trade to help them take advantage of general trade liberalization.
2. We discussed the current situation in the energy markets and the risks that high oil prices pose for the global economy going forward. We call for comprehensive action by both energy-producing and energy-consuming countries to facilitate investment in the energy sector, improve energy efficiency, including through national initiatives, and promote greater transparency and reliability in energy market data, including through development of a global common standard for reporting oil reserves. We recognize the importance of the principles of the Energy Charter, of diversification of energy markets and supply sources, and of strengthened emergency response cooperation in ensuring energy security. We encourage the IMF and the World Bank to work with both energy-producing and energy-consuming countries to develop guidelines on appropriate policies to mitigate the adverse impact of high and volatile energy prices.
3. We discussed the importance of delivering the commitments made in 2005 to help developing countries achieve the Millennium Development Goals. In this regard,we reaffirm the importance of energy for development and are issuing a separate statement on this issue. We noted the particular importance of making further progress to achieve the goals of Education for All. We re-iterate the Gleneagles commitment to help FTI-endorsed countries to develop sustainable capacity and identify the resources necessary to pursue their sustainable education strategies. We look forward to a progress report on the FTI by the World Bank at the Annual Meetings.
4. We welcome the increasing role of new donor countries in financing development in low-income countries. We call for enhanced coordination among all members of the growing donor community, and alignment of aid programs with partner countries' development priorities. We deem it essential to prevent the build up of unsustainable debt in low-income countries, particularly in those that receive debt relief under the HIPC Initiative and the MDRI. We urge all donors to take account of debt sustainability issues in all their lending practices and share fully information on their lending to low-income countries. We congratulate the Paris Club on the occasion of its 50-year anniversary and underscore its key role in promoting coordination for resolving international debt problems.
5. We re-iterate that the risk of an avian flu pandemic requires preparation through facilitating cooperation across countries in drafting contingency plans, including for the financial sector. We appreciate the work undertaken by the IMF in promoting the common elements of business continuity planning and encourage further efforts in helping countries elaborate their own plans. We take note of the progress on innovative financing mechanisms. We thank the World Bank and GAVI for their technical work on Advance Market Commitments for vaccines and look forward to a successful launch of the AMC pilot project by the end of this year. We also call for mobilization of additional support to close the financing gap for polio eradication activities.
6. We acknowledge the importance of better financial education and literacy for improving the ability of people to use financial services and to make effective decisions with respect to their present and future welfare. We welcome the ongoing work in the OECD on the Financial Education Project and call for further development of financial literacy guidelines based on best practices. We support the proposal by Russia and the OECD to organizean international conference in Moscow on financial literacy in coordination with other relevant international bodies. We emphasize that improved access to financial services is a powerful tool of economic development. We call on the IFIs and other donors to support best practices in financial access programs and to improve coverage, accuracy and comparability of data on financial access and financial sector performance. We encourage efforts at the country level to remove obstacles preventing access to financial services, including lowering the costs of remittances.
7. Following on earlier G8 Summit declarations in support of the OECD's high standards of transparency and effective exchange of information in all tax matters, we welcome the report by the OECD's Global Forum on Taxation on progress made world-wide towards meeting these standards. We urge their full implementation everywhere they do not fully apply and look forward to the conclusion of tax information exchange agreements between OECD countries and financial centers.
8. We confirm our resolve to fight money laundering and terrorism financing and are committed to strengthening our systems for freezing assets and sharing information, and development of multilateral financial tools to disrupt criminal and illicit activities. We call for continued actions by all countries to strengthen their adherence to the FATF Recommendations. We support the regular comprehensive assessments of countries' compliance through the mutual evaluation process of FATF and the FATF-style regional bodies and the financial sector assessment program of the IMF and the World Bank. We call for closer cooperation among these institutions in order to deliver consistent and high quality assessment reports, share experience on assessment programs, provide additional training resources and analyze new trends and techniques. We also encourage all countries to publish their full evaluations.
9. We agree that responsible and effective management of public finances is of fundamental importance for achieving macroeconomic stability and sustainable growth, and provides the essential foundation for good governance. To this end, we support national and international initiatives to promote fiscal transparency, stable and sustainable public finances, integrated approaches to budget formulation and execution, performance-based budgeting at each level of government, medium-term financial planning, and effective financial control, accounting and monitoring. We call on relevant international and regional institutions to strengthen the coordination of their initiatives fostering the application of existing international standards and best practices in the fiscal area, and agree to continue dialogue on further measures required to strengthen good governance in public finance.