
	Lyon Summit Information

Background Briefing

(18 June 1996)

Economic aspects of the G-7 Summit
1. Introduction
  
  Chief Coordinator of the Economic Summit Koji Haneda: Good afternoon, my name is Mr. Haneda, I am the Chief Coordinator of the Economic Summit. I am dealing with the economic aspect of the Summit. My colleague here is in charge of political aspects. I will give you a briefing on the economic aspects, then I will turn to my colleague to brief you on the political aspects. First, I believe you are familiar with the rough schedule of the forthcoming Summit. For your convenience I will give you the schedule of the Summit. The Summit will start with dinner on 27 June. It ends on 29 June before noon.
2. Participation by the Russian Federation
  
  Chief Coordinator of the Economic Summit Koji Haneda: The Summit will be followed by a meeting with the heads of four international organizations. One of the characteristics of this Summit is Russia's increased participation. As you know, the Summit has followed the G-7/P-8 formula in the last couple of years, namely the Economic Session by the G-7 Leaders, to be followed by the Political Session with participation by G-7 Leaders plus the Russian President. As you may know, President Boris Yeltsin of the Russian Federation has expressed his desire that the G-7 Summit group would become the G-8. But, there has been much discussion among the G-7 members and the consensus is that we will stick to this G-7/P 8 formula this year also. This year, we will have one session where global issues will be discussed by the G-7 Leaders together with President Boris Yeltsin. This session will be conducted on the afternoon of 28 June, the second day of the Meeting. This is a kind of new addition to the G-7 formula.
3. Exchange of views between heads of international organizations
  
  Chief Coordinator of the Economic Summit Koji Haneda: Also, as proposed by President Jacques Chirac of the French Republic, this year we are going to have an exchange of views with the heads of four international organizations, that is the Secretary General of the United Nations Boutros Boutros Ghali, President of the World Bank James D. Wolfensohn, Managing Director of the International Monetary Fund Michel Camdessus, and Director-General of the World Trade Organization (WTO) Renato Ruggiero. The discussion is expected to focus on development issues; the exchange of views will be conducted outside the framework of the G-7 Summit. We do not think that this is going to be a precedent for such meetings in the future. Now, I would like to share with you some thoughts about the main themes of the forthcoming Summit.
4. The Summit's theme of "globalization"
  
  Chief Coordinator of the Economic Summit Koji Haneda: The theme of this year's Summit will be "globalization". President Jacques Chirac would like to take up this matter because the world is witnessing the expansion of the market economy after the end of the Cold War, the rise of the emerging markets, the rapid growth rate of telecommunication technology, and increasing free flow of trade and investment. The Leaders gathering at the Lyon Summit will discuss policies aimed at broadening the effects of globalization. At the same time, President Chirac would like to take up the issue of how the G-7 Leaders should address the various problems, or various negative aspects, which are surfacing as a result of globalization. The Summit will have four major focal points. The first is the coordination of economic policies. The second is the reform of the United Nations in the economic area. The third is cooperation on global-scale issues, and the last is the response to political issues. I will highlight some of the points on each major thrust of the discussion.
5. The Coordination of economic policies
  
  Chief Coordinator of the Economic Summit Koji Haneda: Under the coordination of the economic policies, such items as macroeconomic policies, development, strengthening the international monetary system, and trade and investment, will we be taken up. As regards growth and employment, of course, the goal of economic policy is to achieve a non-inflationary, sustainable growth. But, as each country is under certain fiscal restraints -- with respect to macroeconomic policy -- it is likely that the Leaders will focus their attention on structural policies. Japan has advocated that, in order to deal effectively with the various economic problems, the structural policies are important on top of fiscal, as well as monetary policies. On the second day, the development issue is going to be a major item. President Jacques Chirac has emphasized this aspect in the course of preparation for this summit. The Leaders are likely to discuss the formulation of a new development strategy. We think that we have to establish a new concept of a global partnership between developed and developing countries under which both the developed, as well as the developing countries, can work together to attain specific development objectives. On this matter, Japan is advocating output-oriented development objectives in the various international fora, including the Organisation for Economic Co-operation and Development (OECD). We are glad to see that this new concept has gained support among the various countries, and that this concept was already reflected in the final communiqué of the OECD Ministerial Meeting. We would like to see this concept endorsed by the G 7 Leaders in the forthcoming Summit. On the issue of "Strengthening the International Monetary System," the Leaders are likely to focus their attention on measures which can prevent future financial crises, learning from the experience of the Mexican financial crisis on ways to strengthen the capabilities of international financial institutions, and on seeking means to assist heavily indebted poor countries. Fourthly, on the matter of trade and investment, we think it very important that G-7 Leaders launch a strong message for a successful WTO Ministerial Conference in Singapore in December. Trade and investment are the driving forces of globalization, and the G-7 Leaders should send a strong signal on this matter to the whole world.
6. Reform of the United Nations
  
  Chief Coordinator of the Economic Summit Koji Haneda: Now, I would like to turn to the reform of the United Nations institutions in the economic area. This is a kind of homework from last year's Halifax Summit. Discussions have taken place on how to rationalize and coordinate the various activities of the international organizations. On this matter, the discussion is likely to look into specific measures which can be taken in order to affect a reform to strengthen the capabilities of the United Nations, and, in order to increase the activities in the economic and social fields. On this score, Japan has proposed a new concept of reinvesting savings from reform to development. This new concept was already reflected in the final document of the Ninth United Nations Conference on Trade and Development (UNCTAD-IX) meeting in South Africa last month. We would like to see, together with these other measures, our proposal endorsed by the G-7 Leaders.
7. Cooperation on global issues
  
  Chief Coordinator of the Economic Summit Koji Haneda: Lastly, I would like to touch upon global issues. It is likely that global issues, such as the environment, nuclear safety and security, terrorism, and AIDS, will be taken up. In relation to this, especially the environment, next year marks a very important year, the fifth year since the United Nations Conference on Environment and Development (UNCED) Summit which was held in Rio de Janeiro. Japan would like to host the conference for parties of the framework Committee on Climate Change so that we can agree on our new targets beyond 2000. As I said, President Boris Yeltsin will also participate in this session and we hope that a constructive contribution will be made by all the participants to address global issues. These are the rough highlights of the economic discussion. Now, I would like to ask my colleague to give some thoughts on the political aspects.
Political aspects of the G-7 Summit
1. Introduction
  
  Assistant Director of the Policy Planning Division, Masahiro Mikami: Thank you very much. With regard to political aspects, as you can imagine, there is always a tendency that the agenda is dominated by the hot issues of the day. It is not really appropriate, therefore, to speculate about which subjects are likely to be discussed by leaders and foreign ministers at the time of the Summit. Having said that, if we think about the political underlying theme of the Summit, probably we can say that the general theme will be how to build frameworks to ensure global security and stability. In this context, discussion will focus on how to address various issues in the post-Cold War era, including non-proliferation, disarmament, and settling regional conflicts.
2. Main political issues to be addressed
  
  Assistant Director of the Policy Planning Division, Masahiro Mikami: Although I said it is difficult to predict, if you look at the current international situation, there are several issues which will almost certainly be talked about by the Leaders. They include Russia, Bosnia-Herzegovina, and the Middle East peace process. Incidentally, elections play an important part in all of these contexts. For Russia, the Summit takes place within the period of its presidential election. In Bosnia, we are expecting an election in autumn. In the Middle East peace process, Israel recently has had a very important election. Concerning the Asia-Pacific region, we expect that the situations on the Korean Peninsula and China will be among the topics to be discussed.
3. Disarmament issues to be addressed
  
  Assistant Director of the Policy Planning Division, Masahiro Mikami: In addition to those regional situations there are also important topics, such as non-proliferation and disarmament. If we consider that the negotiations on the Comprehensive Nuclear Test Ban Treaty (CTBT) are nearing the very important final stage, and if we think of the recent development concerning the regulation of anti-personal land mines, the issue of non-proliferation and disarmament is also among the important topics to be discussed.
Japanese fiscal and monetary policy

Mr. Kevin Dunn (Dow Jones): Are you expecting some kinds of requests from the G-7 partners concerning Japan's fiscal or monetary policies? Will foreign exchange be a big topic of discussion?

Chief Coordinator of the Economic Summit Koji Haneda: I am sure that you are familiar with the discussion recently held at the OECD and other international fora. At this moment, I cannot say whether there is going to be any such request on the Japanese fiscal or monetary policies, specifically from certain countries.
Foreign exchange issues

Q: What about Foreign Exchange? Is it going to be a topic of big discussion this time?

Chief Coordinator of the Economic Summit Koji Haneda: As far as foreign exchange matters are concerned, this ministry is not in charge. You should ask our colleagues in the Ministry of Finance. Having said that, you know what the Finance Ministers have said at the Washington G-7 Ministers Meeting, as well as at the OECD Ministerial Meeting. I think that gives some clue as to what is going to be discussed at the forthcoming Summit.
Reinvestment of savings from United Nation reform into development

Q: Concerning this so-called "Hashimoto Plan," do you have an estimation of what will be the potential amount of rationalization savings to be channeled for development projects?

Chief Coordinator of the Economic Summit Koji Haneda: As I have explained, this new concept of reinvestment of savings from reform to development has gained support both in developed, as well as developing countries. We would like to see this notion endorsed at the G-7 Summit. But, it is just a start, and the consideration of the actual modality of how to reinvest the money into development by the various development-related agencies is the second stage; it is up to these organizations to decide. First, this concept of reinvestment has to gain support by the United Nations as a whole. Then each institution will discuss the modality of how to reinvest.

Q: You must have an idea as to how much money can be --?

Chief Coordinator of the Economic Summit Koji Haneda: It really depends on each development agency as to how much they can rationalize, or how much they can streamline. I cannot give you any figure at this moment.
Other issues to be discussed at the Summit

Q: My question is what are the other issues that Prime Minister Hashimoto will be requesting at the Lyon Summit?

Chief Coordinator of the Economic Summit Koji Haneda: We attach importance to such issues as development, reform of the United Nations, trade and investment, and global matters. Thank you very much.

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