G8 must cooperate more closely to improve financial stability
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| The red zone in Genoa - site of the G8 Summit |
Paris, 18 July 2001 - Ahead of the Group of Eight summit in Genoa, world business today urged the leaders of the world's leading industrial nations to work together more closely in improving global financial stability and reducing risks to investor confidence.
The International Chamber of Commerce made public broad business recommendations on issues ranging from trade liberalization, to technology transfer, the environment and bridging the digital divide. The ICC recommendations to the G8 have already been presented privately to the heads of state and government attending the summit.
The statement, which was delivered by ICC national committees in their respective capitals, said that globalization was creating new risks as well as new wealth. "ICC urges the countries represented at Genoa to reinforce international cooperation in minimizing the risks of sudden and internationally contagious collapses in investor co
nfidence and in improving global financial stability."
This required active participation of developing countries and transition economies and better coordination among international institutions. It also required collaboration with the private sector.
ICC said global financial stability was a vital condition for economic growth and was critical to expanding international trade and investment. The key was convergence of national systems around high-quality international standards and norms in such areas as prudential supervision and regulation, corporate governance, accounting and auditing, and aspects of fiscal and monetary policy making.
The world business organization welcomed G8 initiatives to improve the quality and supervision of the financial system at both the national and international levels, involving both borrowing and lending countries.
"Business is concerned, however, that reform efforts lack a sense of urgency and that the pace of change is too slow," the ICC statement said. While strong growth in recent years might have masked systemic weaknesses, these could very well resurface during an economic slowdown, "with consequences not unlike those experienced in Asia only a few short years ago."
On the role of the developing countries in the world economy, ICC said it welcomed their growing influence in intergovernmental organizations and in international economic policy-making. "Many developing countries are now major actors in the world economy and their contribution to policy-making is essential to minimize systemic risks and, more positively, to encourage and efficiently manage the process of globalization."
ICC said that in the past decade the developing world had for the most part embraced the challenges of implementing market economy principles urged upon it by the G7 and other developed countries with courage and in good faith. "In return, it has the right to expect due regard for its growing commercial interests and, in particular, improved market access for its exports."
Other highlights of the ICC statement were:
· Governments should pursue a common approach to health and safety standards and regulatory requirements to speed the global diffusion of new technologies and reduce the potential for trade conflicts.
· The potential for genetically modified food products to feed rapidly growing populations in developing countries is a matter "of vital concern to the international community".
· There should be a "holistic" approach to bridging the digital divide, including promotion of a competitive marketplace in information technology and services, education and training, regulatory reform and encouragement of foreign direct investment.
· Improvements in human rights and in labour and environmental standards are more readily attainable in conditions of rising prosperity, produced by the interaction of the market economy and good governance.
· Good corporate practice is spread more effectively by example, persuasion and peer pressure rather than by prescriptive government codes and regulations.
· Governments should reject demands by publicly unaccountable and frequently unrepresentative external groups that seek to impose codes of conduct on multinationals.
· Business calls on governments to continue international negotiations to combat greenhouse gas emissions. Business requires clear policy decisions from governments to enable it to plan its own actions accordingly.
Full text of ICC statement