Group of Eight communiqué: Leaders call for cooperative effort to increase prosperity, promote social progress

• Pages: 211-213

Page 211

We, the heads of state and government of eight major democracies and the President of the European Commission, met in Cologne for the twenty-fifth economic summit. On the threshold of the new millennium, we discussed growing opportunities as well as forward-looking solutions to the challenges facing our nations and the international community.

Globalization, a complex process involving rapid and increasing flows of ideas, capital, technology, goods, and services around the world, has already brought profound change to our societies. It has cast us together as never before. Greater openness and dynamism have contributed to the widespread improvement of living standards and a significant reduction in poverty. Integration has helped to create jobs by stimulating efficiency, opportunity, and growth.

The information revolution and greater exposure to each other's cultures and values have strengthened the democratic impulse and the fight for human rights and fundamental freedoms while spurring creativity and innovation. At the same time, however, globalization has been accompanied by a greater risk of dislocation and financial uncertainty for some workers, families, and communities across the world.

The challenge is to seize the opportunities globalization affords while addressing its risks to respond to concerns about a lack of control over its effects. We must work to sustain and increase the benefits of globalization and ensure that its positive effects are widely shared by people all over the world. We therefore call on governments and international institutions, business and labor, civil society, and individuals to work together to meet this challenge and realize the full potential of globalization for raising prosperity and promoting social progress while preserving the environment.

Getting the world economy on track

Since we met last year in Birmingham [see IMF Survey, May 25, 1998, page 157], the world economy has faced major challenges. Progress has been achieved in addressing the crisis and laying the foundations for recovery. Policy steps aimed at supporting growth in the major industrial countries and important policy actions leading to stronger performance in some emerging markets have improved the economic outlook.

A number of substantial challenges still remain. We therefore renew our commitment to pursue appropriate macroeconomic policies and structural reforms.

These will contribute to more balanced growth in the world economy, thereby reducing external imbalances.

The world economy is still feeling the effects of the financial crises that started in Asia two years ago. Without an open, rules-based world trading system and the beneficial flows of goods and services it encourages, the countries affected would be having much greater difficulty recovering from...