Outline and Tentative Evaluation on the Statement by the Group of Sevent
July 4, 1997
1. Overall Evaluation
(1) At the Denver Summit the G-7 Leaders engaged in a frank exchange of views on the various challenges facing nations around the world in the midst of rapidly advancing globalization (intensification of competition and reform in line with internationalization) in areas such as economy and finance as we approach the 21st century. The G-7 Leaders conducted an overarching discussion not only in the short-term but also in the medium- to long-term perspectives, and described concrete prescriptions for various issues, which was extremely valuable.
(2) In particular, to overcome challenges arising from the globalization of markets, and to realize its benefits for all the countries and the citizens of the world, the following were indicated as priority tasks: (1) to implement policies and to promote sustainable, noninflationary growth, create jobs, restore sound public finance and meet the challenge of the aging of our populations; (2) to work together with other countries to promote open markets for trade and investment and to support global financial stability ; and (3) to promote the successful integration of the transition and developing countries of all regions of the world into the global economy.
(3) Prime Minister Ryutaro Hashimoto actively led discussion on issues such as macroeconomic policies and aging populations. He also explained the six major reforms which he is pushing forward strongly in order to achieve sustainable economic development over the medium to longterm. He explained Japan's contributions in terms of issues such as aging populations and international finance, taking into account an Asia-Pacific perspective.
2. Main Issues
(1) Promotion of Growth
The G-7 economies are overall in good shape, with low inflation rates and generally solid growth rates. However, each economy faces its own challenges, including the high level of unemployment and securing sound fiscal and financial markets. It was also recognized that structural reforms are needed to respond to the economic and social impact of the aging of society, and the Leaders agreed to push forward further work within the Organization for Economic Cooperation and Development.
In terms of the status of each economy, it was felt important that the United States remain vigilant against a resurgence of inflation, that the federal budget be balanced and that savings be promoted. In regard to Japan, it is important that Japan achieve domestic demand-led growth and avoid a significant increase in its external surplus, while engaging in fiscal and other structural reforms. The importance of the employment issue in Europe was also noted.
The Statement also included reference to the importance of Russia's economic reform, including tax reform, improvement of the investment environment, promotion of competition and countermeasures against bribes.
(2) Strengthening the Stability of Global Financial Systems
International financial markets are becoming increasingly global and complex. Recognizing that securing their stability and effectiveness is of great importance to world growth and prosperity, the Leaders commended the efforts since the Halifax Summit of financial regulators and international financial institutions to ensure market stability and to respond to financial crises. They also discussed means by which to further strengthen cooperation between international regulatory bodies. In this context, the importance of international coordination to strengthen financial systems in the emerging market economies was recognized, and the Leaders agreed to push forward with consideration of further action.
(3) Building an Integrated Global Economy
(i) International Financial Institutions
From the perspective that continued reform of international financial institutions is vital in increasing world trade and the mobility of private capital, there was unanimous recognition as to the importance of the following: work on reform of the International Monetary Fund (IMF), including amendment to the Articles; work on reform of the World Bank toward, for example, the reduction of poverty and building institutional capacity, especially in the poorest countries; and ensuring good governance and transparency in the developing countries in regard to support from international financial institutions.
(ii) Global Partnership for Development
The Leaders reaffirmed the Global Partnership for Development welcomed at the Lyon Summit; for developed countries, the importance of sustainable growth, the liberalization of trade and investment, adequate development assistance, and an emphasis on the poorest countries was noted, while it was also noted that for developing countries, appropriate macroeconomic policies, the minimization of unproductive expenditures, effective economic reform and the liberalization of trade and investment were important.
The Leaders welcomed the implementation of the HIPC initiative, an initiative endorsed at the Lyon Summit in order to help heavily indebted poor countries. They also looked forward to further implementation of this initiative.
(iii) Corruption and Financial Crimes
The Statement included strengthened support from the IMF and other multilateral development banks for countries fighting corruption; the decision by the OECD Ministers concerning bribery; international cooperation on financial crimes; and enhancement of the Financial Action Task Force (FATF) in regard to money laundering.
(iv) Trade and Investment
The Statement included the full and effective implementation of Uruguay Round agreements; the results of the World Trade Organization Ministerial Conference held in Singapore; securing a financial services agreement by the end of the year; expectation of a WTO conference on least-developed countries; expanding the membership of the WTO ; and a successful completion of the OECD negotiations on the Multilateral Agreement on Investment.
(4) Ukraine
The G-7 pledged a total of US$300 million in regard to the sarcophagus covering the remains of the Chernobyl reactor.
3. Japan's Position
Japan approached the meeting stressing the following points:
(1) Macroeconomy and Employment
In addition to the six reforms which Japan is undertaking, Japan will host an international conference on employment in Kobe in autumn this year, focusing on the employment of young people and older people.
(2) Finance
To stabilize the finance markets of the emerging market economies, Japan will host an international seminar this year as a forum for dialogue between those economies and the relevant international organizations.
(3) Development
Japan is promoting aid coordination with other donor countries and policy dialogue with developing countries in order to implement the concept of the New Global Partnership for Development, endorsed at the Lyon Summit last year. Japan's specific initiatives include the establishment of an international network for cooperation in human resource development in Africa; the hosting of the Okinawa Conference on the New Development Strategy in July; and the hosting of the International Conference on South-South Cooperation, next year.
(4) Trade
In terms of the expansion of WTO membership, it is important that the countries seeking to accede to the WTO are encouraged to commit themselves to liberalization, such as further improvement of access to their markets, thus accelerating negotiations.
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