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G8 Finance Ministers Commitments, 2002-03
John Kirton and Michael M. Malleson
G8 Research Group
University of Toronto
May 19, 2003
Summary of Commitments by Meeting, 2002-03
Specific Commitments by G7/8 Finance Ministers Meeting
Statement of G7 Finance Ministers and Central Bank Governors, Washington DC (April 20, 2002)
Statement of G7 Finance Ministers, Halifax (June 15, 2002)
Statement of G7 Finance Ministers and Central Bank Governors, Paris (February 22, 2003)
Statement of G7 Finance Ministers and Central Bank Governors, Washington DC (April 11, 2003)
Finance Ministers Statement, Deauville (May 17, 2003)
In its ongoing effort to assess reliably the performance of the G8 system of global governance, the G8 Research Group has produced the following data set. It identifies the decisional commitments made by the G8 finance ministers at their most recent meetings and in their most recent statements, back to the spring 2002. The concept of commitments employed here was pioneered by George von Furstenberg and Joseph Daniels (Daniels 1993), systematized and codified by Ella Kokotsis (Kokotsis 1999, Kokotsis and Daniels 1999), and applied here by Michael Malleson. Commitments are measurable, discrete, future-oriented collective expressions of intended action that bind or constrain their signatories in regard to the course of action they might otherwise independently take. Individual commitments may, but do not have to, contain specified implementing measures, targeted welfare outcomes, or temporal timetables for partial and full compliance.
An application of this concept and method of commitment analysis to the communiqués of the recent G8 finance ministers meetings and statements indicates that this G7/8 ministerial-level institution, which dates back to the G5 finance ministers forum founded in 1973, expanded to the G7 in 1986., and transformed into a summit-associated but separated body in 1998, has been a robustly decisional one.
As Appendix A shows, the six most recent G7 finance ministers meetings have generated an average of 15 commitments per meeting, with very little variation around this average. The two most recent 2003 meetings have generated more commitments than their equivalents in 2002.
This data set is offered in this initial form for comment and critique and as a foundation for further analysis. In particular, it can serve as a referent against which the decisional productivity of previous and subsequent pre-summits meetings of G8 finance ministers can be judged. Comments are most welcome; please send them to firstname.lastname@example.org.
Daniels, Joseph (1993), The Meaning and Reliability of Economic Summit Undertakings, 19751989 (Garland Publishing, New York).
Kokotsis, Ella (1999), Keeping International Commitments: Compliance, Credibility and the G7, 19881995 (Garland: New York).
Kokotsis, Ella and Joseph Daniels (1999), "G8 Summits and Compliance," in Michael Hodges, John Kirton and Joseph Daniels, eds., The G8s Role in the New Millennium (Ashgate: Aldershot), pp. 7594.
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Appendix A: Summary of Commitments by Meeting, 2002-03
|April 20, 2002||Washington||IMF||13|
|June 15, 2002||Halifax||PSM||12|
|September 27, 2002||Washington||IMF||11|
|February 22, 2003||Paris||SYM||16|
|April 11, 2003||Washington||IMF||14|
|May 17, 2003||Deauville||PSM||24|
|Average of all meetings||15|
|Average of IMF-linked meetings||12.6|
|Average of PSM||18.0|
|Average of SYM||16.0|
IMF = Meetings linked to International Monetary Fund meetings
PSM = Pre-Summit meetings
SYM = Start-of-Year meetings
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Appendix B: Specific Commitments by G7/8 Finance Ministers Meeting
Kokotsis Commitments for
Statement of G7 Finance Ministers and Central Bank Governors
Washington DC, April 20, 2002
Terrorism / FATF
1. We remain strongly committed to combating the financing of terrorism and we take note of the progress made in implementing our previous Action Plans.
2. As a further and positive step forward in the war on terrorist financing, the G-7 Finance Ministers announced today the first G-7 joint designation of terrorist entities and the associated freezing of assets in the G-7 countries; the Ministers encourage other countries to freeze these assets as well.
3. We again urge all countries to participate in the FATF self-assessment and to implement quickly the FATF recommendations against terrorist financing.
4. We urge the IMF and World Bank to begin conducting their financial sector assessments, incorporating reports on compliance with anti-money laundering and terrorism financing standards based on FATF recommendations.
5. Today, we announced an Action Plan to improve stability, growth, and potential living standards in emerging markets. Rapid progress in the weeks and months ahead is essential. We will review progress at our next meeting.
6. We affirmed our strong commitment to advancing development and combating poverty in the poorest nations including by linking greater contributions by developed nations to the adoption of good economic policies by developing countries.
7. We also stressed the importance of continued trade liberalization, particularly in support of improving the effective participation of the poorest countries in the multilateral trading system.
8. We will work with emerging market countries and their creditors to implement a market-oriented approach to the sovereign debt restructuring process in which new contingency clauses would be incorporated into debt contracts. These new clauses should describe as precisely as possible what would happen in the event of a sovereign debt restructuring. The clauses should include super-majority decision-making by creditors; a process by which a sovereign would initiate a restructuring or rescheduling; including a cooling-off, or standstill, period; and a description of how creditors would engage with borrowers.
9. Within these parameters, we will work with borrowers and creditors to make the clauses as effective as possible, examining such issues as aggregation, new private lending, and treatment of existing debt.
10. We will also work with the International Monetary Fund on incentives for countries with IMF programs to adopt such clauses.
11. With this market-oriented approach to the sovereign debt restructuring process, we are prepared to limit official sector lending to normal access levels except when circumstances justify an exception. It is becoming clearer that official sector support is being limited. Limiting official sector lending and developing private sector lending are essential parts of our Action Plan.
12. We will work with the IMF to improve the quality, transparency, and predictability of official decision-making as a key means of crisis prevention. Specific actions include a more pre-emptive analysis of debt sustainability using market-based measures of credit-worthiness, a consideration of a greater degree of independence between the surveillance or analysis role and the lending role at the IMF, and a clarification of the lending into arrears policy of the IMF.
13. We support further work by the IMF on proposed approaches to sovereign debt restructuring that may require new international treaties, changes in national legislation, or amendments of the Articles of Agreement of the IMF.
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Kokotsis Commitments for
Statement of G7 Finance Ministers,
Halifax, June 15, 2002
1. However, much more needs to be done, especially regarding the monetary framework and bank restructuring. We welcome the decision to invite an IMF mission to Argentina this week. We call on the Argentine Government to work with the IMF on a new program to implement such a plan; we will continue to support Argentina and the IMF in this effort.
2. We will continue to work to enhance discipline on the size of IMF assistance packages, and define more precisely the circumstances where exceptions might be justified. We strongly support the Funds continuing work on a sovereign debt restructuring mechanism.
3. We reiterate the call made at Monterrey for a Global Development Compact between developed and developing countries based on mutual accountability for results.
4. We agree that developed countries have a responsibility to improve development cooperation in support of country-owned poverty reduction and growth strategies, increase technical assistance, provide appropriate aid and debt relief, and expanding market access.
5. We urge the MDBs to continue to increase their collaboration and the effectiveness of their assistance, including through increased priority on improving governance in recipient countries, an enhanced focus on measurable results, and greater transparency in program decisions.
6. With regard to the HIPC initiative, we will work with the IFIs and other donors to promote the participation of all creditors that have not yet done so, in particular some multilateral institutions, to fully participate in the initiative; to complete the financing of the HIPC Trust Fund; and thus to deliver on our commitment to help achieve debt sustainability for the worlds poorest countries.
7. We also endorse full replenishment of IDA, the cornerstone of multilateral support for low-income countries. We welcome the increased use of results measurement to track development outcomes. We support an increase in the use of grants, in the range of 18 per cent to 21 per cent of the IDA13 program, to enhance the effectiveness of IDA in helping the poorest and debt vulnerable countries combat HIV/AIDS, support the social sectors, including education, and overcome the effects of devastating conflict. We will work with our fellow IDA donor governments to finalize the negotiation as soon as possible along these lines.
8. We also note the World Banks Education Action Plan and strongly endorse the expeditious implementation of a plan focused on program quality and measurable results. Each of us in turn will work to support the Education for All goals with countries that have credible education plans and strong policy commitments in place. We urge other donor governments and the multilateral development banks to join us.
9. To encourage the broadest possible participation in this fight, we call on the FATF to identify countries for follow-up assessment and technical assistance, by the IMF, the World Bank, and the United Nations. We urge the IMF and World Bank to begin conducting integrated and comprehensive assessments of standards to combat money laundering and financing of terrorism.
10. We agree that the administration and enforcement of tax laws depend increasingly on transparency and effective international exchange of information. We call on all countries to permit access to, and exchange, bank and other information for all tax purposes; OECD countries should lead by example. Progress in this area is urgently needed and we intend to review developments at our next meeting.
11. A stable and more prosperous Afghanistan is important to the Afghan people and to the world. We are determined to ensure that the international community supports Afghanistan, and delivers on the commitments pledged at the Tokyo Conference in January 21-22, 2002.
Russian Accession to WTO
12. We agree on the importance of Russias early accession to the World Trade Organization (WTO).
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1. We recognize that risks remain. We are committed to sound economic policies and structural reforms, and to working together to improve corporate disclosure, enhance corporate accountability, and strengthen the independence of auditing.
2. We are confident that these policies, accompanied by continued vigilance and cooperation, will strengthen growth in coming months, and thus support sustained expansion. We will continue to monitor exchange markets closely and cooperate as appropriate.
3. [We] are ready to support Argentina, through the IMF, in the context of a sustainable program.
Sovereign Debt Restructuring
4. We also will continue to work with the IMF to implement criteria and procedures to limit official sector lending to normal access levels except where extraordinary circumstances justify an exception. Important progress has been made towards a market-oriented, contractual approach to sovereign debt restructuring.
5. We agree that any sovereign that issues bonds governed by the jurisdiction of another sovereign should include such clauses. We welcome the work done to date by the IMF on a statutory sovereign debt restructuring mechanism, and look forward to considering a concrete proposal at its spring meeting.
6. We reaffirm our strong commitment to combat terrorist financing.
7. We call on the IMF, World Bank, and the UN to work with the FATF in its identification of jurisdictions that require assessments and technical assistance.
8. We support increased development assistance based on good policy performance and measurable results. We support the calls made at Monterrey and Johannesburg to combat global poverty and promote sustainable development, growth, and fiscal sustainability through a new and effective partnership between developed and developing countries.
9. We are following through on the Kananaskis commitment to bear our share of the shortfall of up to $1 billion in the financing of HIPC. Each of us will be stating our contribution in the near future and call on other creditor countries to join us.
10. We urge developed and developing country members of the WTO to make substantial progress in multilateral trade negotiations and to reduce significantly trade barriers to global economic growth and poverty alleviation.
11. We call on international donors to expedite the delivery of assistance that supports the budget of the government of Afghanistan and that achieves visible reconstruction.
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Kokotsis Commitments for
Statement of G7 Finance Ministers and Central Bank Governors
Paris, February 22, 2003
We recognise the imperative for higher growth rates and resolve to take steps to achieve this result. To this end
1. Europe is committed to accelerating labour, product and capital market reforms to achieve a more flexible economy ;
2. Japan has reiterated its commitment to structural reforms, including in the financial and corporate sectors ;
3. the US is implementing action to create jobs, encourage capital formation and savings and raise productivity growth.
4. We also remain steadfast in our commitment to ensure sustainable public finances and price stability.
5. To strengthen corporate governance and to bolster further investor confidence, we are implementing ambitious domestic reforms. Strengthened market discipline, improved corporate disclosure, increased transparency and effective regulation are common principles that underpin sound financial systems and ensure their coherence.
6. We support the work of the Financial Stability Forum and other fora, covering independent auditing, high-quality accounting standards, sound corporate governance and financial information quality. We will review the progress of their work.
Crisis Prevention and Surveillance
7. If the economic outlook weakens, we are prepared to respond as appropriate. We will continue to monitor exchange markets closely and cooperate as appropriate.
8. We urge the IMF to enhance crisis prevention, including by making its surveillance more effective.
9. We urge all countries to implement and enforce laws to combat the financing of terrorism. We will continue to provide technical assistance to countries that lack appropriate measures to combat terrorist financing.
10. We urge the IMF and the World Bank to step up their assessments and their provision of technical assistance in coordination with the United Nations and to present an action plan at the Spring meetings.
11. We urge the Financial Action Task Force to foster effective asset freezing. We encourage more effective oversight of informal financial institutions and charities and we look forward to revised Financial Action Task Force recommendations by June.
12. We urge all OECD countries to implement the standards set out in the OECDs 2000 report on access to bank information and to ensure effective exchange of information for all tax purposes. A level playing field is crucial to avoid tax evasion shifting from those countries that engage in exchange of information to those that do not.
13. We are all committed to the Doha Development Agenda and to meeting its overall timetable and interim milestones.
14. We reaffirm our support for the Millennium Development Goals, including on health, education and water supply and sanitation, as well as to the completion of the Highly-Indebted Poor Countries (HIPC) initiative and of the Global Health Fund.
15. Their achievement calls for an increased volume of development resources. We have made progress particularly on HIV/AIDS and will continue to focus on the Goals and their financing, including facilities, with a view to making further progress by Evian.
16. Consistent with the G8 Africa Action Plan, we are ready to provide substantial support to African countries that implement New Partnership for Africas Development (NEPAD) principles and are committed to improving governance and demonstrate solid policy performance.
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Kokotsis Commitments for
Statement of G7 Finance Ministers and Central Bank Governors
Washington DC, April 11, 2003
1. We underscore the importance to global growth and poverty reduction of successful trade liberalization through the timely implementation of the Doha Development Agenda, notably in financial services.
2. We will respond as needed to developments in the economic environment. We will continue to monitor exchange markets closely and cooperate as appropriate.
3. We reiterate our commitment to strengthen crisis prevention and resolution measures. We are pleased to see progress being made on each element of our Action Plan of last April, as detailed in the accompanying update. We will continue to work to further implementation in this area.
4. We reaffirm our strong commitment to combat terrorist financing and pledge to maintain the momentum we have achieved thus far. We will work with the Financial Action Task Force, the UN, and the International Financial Institutions to implement the work plan that we endorsed in February. We welcome the Action Plan of the IMF and World Bank, and are encouraged by the progress of the Pilot Program agreed with FATF; we urge them to successfully carry forward this important initiative.
5. We reaffirm our February commitment to address the challenge of global poverty and our support for the Millennium Development Goals and the Monterrey consensus. Achieving these will require mobilization of greater financial resources by developed and developing countries.
6. We reiterate our support for NEPAD principles.
7. We will develop an approach for dealing with non-IDA countries within the Paris Club for consideration at our May meeting.
8. We recognize the need for a multilateral effort to help Iraq. We support a further UN Security Council resolution.
9. It is important to address the debt issue and we are looking forward to the early engagement of the Paris Club.
10. To complement these measures, we support the presumption of publication of Article IV reports, Public Information Notices (PINs) of relevant Board discussions, program documents, and reports on the observance of standards and codes (ROSCs), especially for countries with IMF programs, while taking into account its impact on deletion and correction policy. Program documents for cases of exceptional access should always be published.
11. These stronger procedures, including early Board involvement and a separate report evaluating the case for exceptional lending, will be applied to any exceptional lending, even where the member is not experiencing a capital account crisis. We welcome the recent establishment of a strong presumption that only the SRF will be used for any exceptional lending to address significant balance of payment pressures on the capital account. We also welcome the progress made in clarifying the Funds policy for lending in cases where members are in arrears to their private creditors.
Code of Conduct
12. In the light of growing interest in exploring a voluntary "code of good conduct", and since good investor relations are key to timely, orderly debt restructurings, we have instructed our officials to prepare a report, in consultation with issuers and the private sector, on these issues by our Fall meeting.
13. We remain committed to promoting the early and widespread adoption of CACs. To date, experts from the private and official sector have made progress toward developing model clauses for use in sovereign bond contracts. We expect that G-7 countries will continue their leadership by adopting CACs in their own bonds governed by the laws of a foreign jurisdiction.
Sovereign Debt Restructuring Mechanism
14. work should continue on issues raised in the SDRM discussions, such as aggregation, scope of debt, and inter-creditor equity that are of general relevance to the orderly resolution of financial crises.
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Kokotisis Commitments for
Finance Ministers Statement
Deauville, May 17, 2003
1. We will therefore continue to cooperate to achieve higher growth in all of our economies, while ensuring domestic and external sustainability, and thereby to contribute to global economic growth . First, we need to raise economic growth in our own economies.
2. As we face a common challenge of ageing, our contribution to higher worldwide growth should rely more strongly on a good system of education and life-long learning, research and development, innovation and entrepreneurship, on the foundation of a sustainable fiscal and monetary framework.
3. We are strengthening our commitments to structural reforms and sound macroeconomic policies.
4. Europe will continue to foster innovation and to accelerate labour, product and capital market reforms so as to achieve a more flexible economy.
5. The US will act to create jobs and to encourage savings and investment by the private sector.
6. Japan will continue its structural reforms, including in its financial and corporate sectors, and intensify its efforts to combat deflation.
7. Canada will maintain monetary prudence and fiscal balance, while investing in productivity.
8. Russia, which has greatly improved its performance, will pursue structural reforms, in particular in the financial sector.
9. To bolster investor confidence, we will continue to reinforce corporate governance practices, market discipline, transparency and regulation in line with the principles agreed in February.
10. We favour the emergence, through open and public processes involving the private sector, of high-quality internationally recognized accounting standards that are applied, interpreted and enforced, with due regard to financial stability concerns.
11. We will closely monitor the on-going work on Basel II and will review the issue at our next meeting in September.
12. We welcome the work program agreed by the Financial Stability Forum in Berlin on potential financial vulnerabilities and corporate governance and related matters, including rating agencies and financial analysts, and will review the results of this work in September.
13. We reaffirm our strong commitment to combat terrorist financing. We call on the Financial Action Task Force to deepen its engagement with the UN and the International Financial Institutions, to foster worldwide compliance with international standards against terrorist financing and delivery of related technical assistance.
14. We look forward to further work on the misuse of alternative remittance systems and non-profit organisations and to developing more effective freezing regimes.
15. We welcome the progress achieved by the IMF, the World Bank and the FATF on the pilot program of assessments and look forward to its evaluation. We look forward to revised FATF recommendations by June, establishing an enhanced standard in the fight against money laundering and financial crime.
16. We urge all OECD countries to implement the standards set out in the OECDs 2000 report on access to bank information and to ensure effective exchange of information for tax purposes.
17. We reaffirm our commitment to strengthen our crisis prevention and resolution measures through improved IMF surveillance, greater transparency and more orderly, timely and predictable workouts of unsustainable debt.
18. Second, within a predictable medium-term framework, we need to provide the developing countries the resources necessary to support their commitment to implement structural and governance reforms, so as to accelerate their growth and social progress.
19. Third, we are determined to achieve the objectives and overall timetable set out in the Doha Development Agenda and to ensure that the Cancun ministerial takes the decisions necessary to reach these goals Building on Nepad, we agree that Africa must become more integrated into the global economy and we will leverage the benefits for Africa of our trade commitments.
20. We reaffirm our commitment to achieve these Goals, including health, education and water, to support the Global Health Fund and to complete the Heavily-Indebted Poor Countries initiative.
21. The fight against global poverty calls for increased resources. Building on our recent announcements of increased resources and on our discussions to date on financing instruments, including facilities, we call for a report by September.
22. Equally, as set out in the document made public today, we stress the importance of improving the effectiveness of our bilateral and multilateral aid, including by focusing on poor countries committed to reforms, setting and achieving measurable objectives, adopting growth-oriented policies and reducing transaction costs of assistance.
23. We are also committed to promoting good governance, improved transparency and public financial management and the fight against corruption. We will review progress next year.
A new Paris Club approach to debt restructuring
24. Finance Ministers urge the Paris Club to adopt such an approach in future restructuring cases and will review its implementation in Spring 2004. [For details of this new approach, see "A new Paris Club approach to debt restructuring."]
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