Group of Seven communiqué: Progress on Doha Round imperative for faster growth, reduced poverty

• Pages: 124

Page 124

The global economic recovery has continued to strengthen and broaden since we met in February. Prospects are favorable, and although risks remain, such as energy prices, overall the balance of risks to the outlook has improved. Additional pro-growth reforms are essential to deliver stronger and more balanced global growth, boost employment, and raise incomes. As part of the Agenda for Growth, we discussed our priorities for tax and labor market reforms. We reaffirmed our commitment to sound public finances and monitored implementation of strategies for sustained medium-term fiscal consolidation as economies recover. Progress in these fiscal areas and in the Agenda for Growth are key to addressing the current global imbalances. To deliver faster and more widespread global growth and to fight global poverty, rapid progress on, and early conclusion of, the Doha Round is imperative and will require action by all parties to resolve key outstanding issues.

We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.

Economic fundamentals have improved in many emerging market countries. Yet sustained and sound policies are essential to support lasting growth and reduce external vulnerabilities. In the case of Argentina, progress has been made, but further progress is required.

In developing countries, the private sector is key to growth and poverty reduction. Small businesses play a critical role, but unfavorable business climates are often a constraint. We call on the multilateral development banks (MDBs) to accelerate the development of joint action plans with governments to improve investment climates and scale up their support for small businesses with specific measurable results. The Group of Seven met entrepreneurs from developing countries and reiterated support for their efforts. We urge private sector views to be consistently included in MDB assistance plans. On remittances, we will continue to work on our initiatives to reduce barriers that raise the cost of sending them and to integrate...