Financial Transparency Coalition

Joint press release by Federal Chancellor Angela Merkel, OECD Secretary-General Angel Gurría, WTO Director-General Pascal Lamy, ILO Director-General Juan Somavia, IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert B. Zoellick

International policymakers have countered the global economic crisis with determined and coordinated action. Thanks to these efforts the global economy has now returned to a growth track, even if the crisis is not yet over and unemployment continues to be high.

Therefore, we have to continue major international efforts with the aim of ensuring a lasting recovery in the financial sector and strengthening growth in the long term, and to address the impact of the crisis on poor countries and vulnerable populations. With regard to development in the longer run, industrial and emerging economies are working intensively along with international organizations within the G20 summit process to reorient the global financial architecture, create conditions for more balanced and sustainable growth and develop suitable exit strategies. While the G20 has established itself as the premier forum for international economic cooperation, it remains important to cooperate within diverse networks consisting of national governments, international organizations and other stakeholders to reach common goals. We welcome that our five international organizations have strengthened their cooperation during the crisis: In the context of the G20 we have increased our cooperation with joint work on labour (OECD, ILO), on trade and investment (WTO, OECD, UNCTAD) and on fossil fuels (WB, OECD, IEA, OPEC). We will continue to do so in support of a more sustainable and fairer economy, especially in the following six fields of action:

1. We welcome the progress achieved so far in countering the crisis, including the extraordinary collaborative fiscal stimulus policies, especially within the framework of the G20 summit process. Now it is important to continue effectively implementing the work programme formulated at the Pittsburgh summit and to pass key joint measures for strengthening the international financial architecture, reducing global imbalances and designing exit strategies. Ensuring cross-country consistency is critical, as is recognized in the G20’s Mutual Assessment Process and in international discussions of financial sector reform and taxation. We welcome the ongoing work within the G20 and the IMF on options to improve the global financial safety net based on sound incentives.

2. These endeavours have to be accompanied by policy measures to strengthen employment and to address the social consequences of the crisis, building on the Global Jobs Pact approach adopted at the ILO International Labour Conference of 2009. We welcome the outcomes of the most recent G20 Labour Ministers’ meeting, which we regard as a significant contribution to the creation of new jobs and the reinforcement of social protection.We also welcome the emphasis in the G20 process on the needs of poor countries and vulnerable populations and stress the importance of continued strong and coordinated international support.

3. We welcome the fact that most countries have refrained from implementing protectionist measures, thereby helping to avoid a general tendency towards protectionism. However, the potential of multilateral trade liberalization was not sufficiently realized as a means of contributing to global economic recovery. Therefore, we appeal to all WTO partners to do all they can to ensure the success of the Doha Round and to strive for the adoption of modalities as soon as possible. The multilateral approach to trade liberalization will continue to play a significant role in the future too as a means of ensuring fair competition, preventing trade distortions and creating new market opportunities, especially for developing countries.

4. Only a sustainable global economy can continue to guarantee growing wealth without jeopardizing the chance for future generations to meet their own needs. The G20 Framework for Strong, Sustainable and Balanced Growth, to which the international organizations make important contributions, will support this idea by macroeconomic, fiscal and structural policies. Moreover, we need an overarching consensus, supported by states and international organizations, that helps prevent excesses in the market and works to counter future crises. Therefore, a dialogue process in the G20 on important policy areas in this respect could be helpful. International organizations’ expertise could provide valuable input for this process.

5. When contemplating new sources of growth, economically advanced countries in particular have to focus on new areas, such as cutting-edge technologies, new ways of turning ideas into market success and concepts like “green growth”. Innovative approaches like these could help expedite economic recovery, also on a global scale. As another lesson of the crisis, we should consider expanding our traditional concepts of growth. GDP, as the main indicator of economic development, could be complemented by including appropriate social, employment and environmental components. The work by the Stiglitz Commission will be continued, hosted by OECD. Experts in Germany and France will draft a report on a complementary growth concept by the end of this year.

6. The global fight against climate change must remain a top priority. Last year’s UN Climate Change Conference in Copenhagen did not achieve the progress we had hoped for. We must continue and strengthen our shared commitment to ambitious global climate targets on the basis of common but differentiated responsibilities. We will work for substantive progress at the Bonn Ministerial Conference in May. We welcome that climate protection is increasingly finding its way into the work programmes of international organizations; on this issue, it is crucial to continue building an effective network among different organizations and with governments.

7. The financial crisis and the global economic downturn have had far-reaching effects, especially on developing countries. Against this background, we welcome the international community’s considerable financial efforts and political commitment to its goals of fighting poverty and promoting economic development in poorer countries, thereby resolutely advancing the implementation of the Millennium Development Goals.

To guarantee the sustainable development of the global economy in the long run, it is of paramount importance that the trust-based dialogue between developed countries and emerging economies continues. By further intensifying their own cooperation, the IMF, the World Bank, the ILO, the OECD and the WTO can continue to be valuable partners for governments when it comes to designing a more sustainable global economy. We ask the Canadian and Korean hosts of this year’s G20 summits to devote special attention to this matter.

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Source: OECD – Paris, 28 April 2010