G 8 leaders meeting at Kananaskis can deliver timely and effective leadership on critical issues, says the G-8 Preparatory Conference

TORONTO, June 24, 2002 -- When the G-8 Leaders meet in Kananaskis on June 26-27, they face an unusual set of challenges - and they have a unique opportunity to act says the G-8 Preparatory Conference that released its report to Leaders in Canada today.

The 2002 summit is the first since September 11. Leaders can demonstrate, through their chosen focus on three issues: fighting international terrorism, strengthening global economic growth, and assisting African Leaders with their proposed development strategies, that they can respond to the widespread desire for them to lead.

The G-8 Preparatory Conference is an international network of individuals and research institute leaders from the eight countries. It is co-chaired by Hon. Barbara McDougall, President of the Canadian Institute for International Affairs and Fred Bergsten, Director of the Institute for International Economics in Washington, DC. McDougall and Prof. Wendy Dobson, Director of the Institute for International Business at the Rotman School of Management, University of Toronto, are the Canadian participants. Other members include Sir Leon Brittan (UBS Warburg), Bill Emmott (Editor, The Economist), Henry Kissinger (former US Secretary of State), Joseph Nye (Harvard University), Renato Ruggiero (former Italian Foreign Minister) and Paul Volcker (former Chairman of the US Federal Reserve Board).

Much has changed since the 2001 summit in Genoa. The unprecedented terrorist attacks of September 11 have elicited new levels of international cooperation on issues ranging from international security to the global economy. But much remains to be done which only Leaders can address, underlining the importance of the G-8 summits.

The world economy is recovering from recession, but key changes are still needed in the largest economies to sustain the recovery. G-7 countries cooperated to launch the new round of multilateral trade negotiations at Doha, yet protectionism remains a major threat. Substantial increases in development assistance were pledged at the Monterrey meeting, yet more needs to be done to respond to the initiatives of African leaders.

Members of the G 8 preparatory conference recommend that the G-8 Leaders address the underlying structural problems that threaten the sustainability of the world economic recovery. The non-performing loans of Japanese banks are a stumbling block to a sustained Japanese recovery and Japan is a stumbling block for East Asian recovery. They should press Japan to address its banking problems in a decisive manner (pages 8-9) and the United States to address its alarming trade imbalances, which could lead to a sharp drop in the dollar, inflation and higher interest rates that could derail recovery in North America and Europe (page 9-10).

Trade policy should also be high on the agenda for the world economic recovery. Recent protectionist legislation in the rich countries and growing transatlantic tensions send contradictory signals to developing nations following the efforts at Doha to include them. A strategy is needed to avoid intensifying the transatlantic trade conflict, which by itself could derail the WTO talks. The G-8 summit should declare a stand still on the creation of any new trade barriers until the agreed conclusion date of the Doha Round in 2005 (page 11).

The group recommends particular emphasis certain aspects of development assistance, particularly in Africa (pages 12-13):

• Adopt principles to guide the distribution of assistance that include sound economic policies, good governance and a clear commitment to meeting people's basic health and education needs;
• Provide the assistance required to meet the Millennium Development Goals;
• Provide additional debt relief on the grounds that, properly conditioned, debt relief is superior to traditional aid; and
• Immediately eliminate all trade barriers to exports from the poorest countries.

G-8 summits were made for current circumstances such as these, something Canada as host has recognized with a focused agenda, strong substantive inputs on that agenda, and simple proceedings. They symbolize the leadership of the world's leading nations in addressing critical current problems that can only be solved with cooperative action.

  
-30- 

For more information or to arrange an interview with Alan Webber: 

Ken McGuffin  
Media Relations Officer  
Rotman School of Management 
Voice:  (416) 946-3818  
Fax:   (416) 978-1373 
E-mail:  mcguffin@rotman.utoronto.ca  

Greer Hozack, MBA’99 
Co-chair Unilever Speaker Series 
Rotman School of Management 
Voice: (416) 538-3886 
E-mail: Greer_Hozack@embanet.com