G-7 Ministers Say Global Economic Prospects Improving

(Agree to improve cooperation against terrorist financing) (980)

The finance ministers and central bank governors of the Group of Seven
(G-7) leading industrialized countries say they see growing signs of a
global economic recovery.

In a statement following April 19-20 meetings in Washington, the G-7
officials also announced plans to improve cooperation to cut off
terrorist financing, and said they had approved an action plan for
handling sovereign bankruptcy cases such as Argentina's debt default
in December 2001.

The ministers from United States, Japan, Germany, France, Britain,
Italy and Canada were gathered in Washington as part of the annual
spring meetings of the World Bank and International Monetary Fund
(IMF).

They said in their statement that the prospects for the global economy
"are more positive than a few months ago," but the situation in
Argentina "is of serious concern." They also warned of "downside
risks," including those arising from higher oil prices.

Regarding the handling of over-indebted countries, the G-7 officials
approved a plan that would change debt contracts to insert rules for
negotiating a debt restructuring between creditors and a sovereign
debtor. The rules would include a temporary freeze on debt servicing
while talks were under way.

The ministers also affirmed their support for IMF initiatives to
rebuild Argentina's economy.

On fighting terrorist financing, the officials urged the IMF and World
Bank to conduct regular assessments of country compliance with the
guidelines of the Financial Action Task Force (FATF), a group
established by countries devoted to fighting money laundering.

The officials also called for continued trade liberalization,
particularly to improve participation by the poorest countries in the
multilateral trading system.

Following is the text of the G-7 ministers' statement as released by
the U.S. Department of the Treasury:

(begin text)

April 20, 2002
Statement of the Group of Seven (G-7) Finance Ministers and Central
Bank Governors

We met last night and today with prospects for the global economy more
positive than a few months ago. This is in part a tribute to
strengthened international cooperation. We discussed the global
economy, international efforts to combat the financing of terrorism,
approaches to financial crises, and the importance of more effective
development assistance.

We remain strongly committed to combating the financing of terrorism
and we take note of the progress made in implementing our previous
Action Plans. 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. We again urge all countries
to participate in the FATF [Financial Action Task Force]
self-assessment and to implement quickly the FATF recommendations
against terrorist financing. We look forward to the report of the IMF
[International Monetary Fund] on the efforts it and its member
countries are making to combat the financing of terrorism. 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. We are working to ensure that legitimate
institutions, organizations, and networks are not misused by
terrorists and their supporters.

Economic recovery from the slowdown is underway, supported by
appropriate and proactive macroeconomic policies that were in part a
response to the tragic events of September 11, but downside risks
remain, including those arising from oil markets. Each of us has an
ongoing responsibility to implement sound macroeconomic policies and
structural reforms to sustain recovery and support strengthened
productivity growth in our economies. We welcome the work programs of
the Financial Stability Forum and International Accounting Standards
Board responding to financial and related vulnerabilities. We look
forward to the FSF report by September. We will continue to monitor
exchange markets closely and cooperate as appropriate. We welcomed
Russia's continued strong economic growth, progress in implementing
key reforms, and work toward WTO [World Trade Organization} accession.

Many emerging markets and developing economies are also now showing
clear signs of recovery, building on improved economic policies.
Better availability and clarity of information furnished to markets
have enabled market participants better to assess and differentiate
across economies the fundamental causes of market developments. The
situation in Argentina is of serious concern. Reforms of the fiscal
framework encompassing the provinces, establishing a monetary anchor,
and improving the bankruptcy and economic subversion laws will all
help to restore investment and growth, thereby raising the living
standards of the Argentine people. We thus support the IMF and the
work it is doing with Argentina.

In February, we committed ourselves to making the crisis management
framework more predictable and fair. 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.

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. We recognize that official
development assistance and private financing yield better results when
used in a good policy environment and in support of sound policies
such as good governance, human capital investment, and private sector
development. These are the essential ingredients for raising
productivity growth and reducing poverty in developing nations. We are
committed to increasing the effectiveness of bilateral and
multilateral development assistance, and to continuously monitoring
and measuring its results. 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.

(end text)

(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)