"The World and Japan" Database (Project Leader: TANAKA Akihiko)
Database of Japanese Politics and International Relations
National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] Communique

[Place] Naples
[Date] July 9, 1994
[Source] The Ministry of Foreign Affairs of Japan
[Notes]
[Full text]

1. We, the Heads of State and Government of seven major industrial nations and the President of the European Commission, have met in Naples on 8th-9th July 1994 for our 20th meeting.

2. We have gathered at a time of extraordinary change in the world economy. New forms of international inter-action are having enormous effects on the lives of our peoples and are leading to the globalization of our economies.

3. 50 years ago, at Bretton Woods, visionary leaders began to build the institutions that provided our nations with two generations of freedom and prosperity. They based their efforts on two great and abiding principles-democracy and open markets.

4. As we approach the threshold of the 21st century, we are conscious of our responsibility to renew and revitalize these institutions and to take on the challenge of integration the newly emerging market democracies across the globe.

5. To carry out this responsibility, we have agreed that, in Halifax next year, we will focus on two questions.

(1) How we can assure that the global economy of the 21st century will provide sustainable development with good jobs, economic growth and expanded trade to enhance the prosperity and well-being of the peoples of our nations and the world?

(2) What institutional changes may be needed to meet these challenges and to ensure the future prosperity and security of our people?

Jobs and growth

1. A year ago, recovery was absent or hesitant in all our economies. Today, encouraging results are emerging. Recovery is under way. New jobs have been created, and in more and more of our countries people are getting back to work. Inflation is now at the lowest levels in over three decades and the conditions are in place for strong and lasting non inflationary growth. Therefore we reconfirm the growth strategy we agreed in Tokyo. We call on our Finance Ministers to co-operate closely to keep recovery on track and we have asked them to enhance the ongoing process of multilateral surveillance and policy co-operation. We also encourage stronger co-operation between our appropriate authorities to respond to the growing integration of the global capital markets.

2. But unemployment remains far too high, with over 24 million unemployed in our countries alone. This is an unacceptable waste. It is particularly damaging when-as in many of our countries-it is concentrated among young people and those who have been out of work for a long time.

3. Following the jobs conference in Detroit and the analysis of the OECD we have identified the actions we need to take.

- We will work for growth and stability, so that business and individuals can plan confidently for their future.

- We will build on the present recovery by accelerating reforms so as to improve the capacity of our economies to create jobs.

Both of these elements are essential in order to achieve a lasting reduction in the level of unemployment.

4. We will concentrate on the following structural measures. We will:

- increase investment in our people through better basic education; through improving skills; through improving the transition from school to work; through involving employers fully in training and - as agreed at Detroit - through developing a culture of lifetime learning;

- reduce labour rigidities which add to employment's costs or deter job creation, eliminate excessive regulations and ensure that indirect costs of employing people are reduced wherever possible;

- pursue active labour market policies that will help the unemployed to search more effectively for jobs and ensure that our social support systems create incentives to work;

- encourage and promote innovation and the spread of new technologies including, in particular, the development of an open, competitive and integrated worldwide information infrastructure; we agreed to convene in Brussels a meeting of our relevant Ministers to follow up these issues.

- pursue opportunities to promote job creation in areas where new needs now exist, such as quality of life, and protection of the environment.

- promote competition, through eliminating unnecessary regulations and through removing impediments to small and medium-sized firms;

5. For the implementation of this programme we call for the active involvement of business and labour and the support of our people.

6. We are determined to press ahead with this action programme and will review the progress made towards realising our objectives of sustained growth and the creation of more -and better quality- new jobs.

Trade

1. Opening markets fosters growth, generates employment and increases prosperity.

The signing of the Uruguay Round Agreements and the creation of the WTO are important milestones in postwar trade liberalisation.

2. We are determined to ratify the Uruguay Round Agreements and to establish the WTO by January 1st, 1995 and call on other countries to do the same.

We are resolved to continue the momentum of trade liberalisation. We call on the WTO, IMF, World Bank and the OECD to co-operate within their own areas of responsibility.

3. On new international trade issues we encourage work under way in the OECD to study the interaction of international trade rules and competition policies. We support the further development of international investment rules in order to remove obstacles to foreign direct investment.

4. We welcome the work on the relation between trade and environment in the new WTO. We call for intensified efforts to improve our understanding of new issues including employment and labour standards and their implications for trade policies.

5. In our meeting next year we will review progress on these issues.

Environment

1. Environment is a top priority for international co-operation. Environmental policies can contribute to enhancing growth, employment and living standards, for example through investments in appropriate technologies, energy efficiency improvements and cleaning-up polluted areas.

2. We urge the multilateral development banks to continue making progress in promoting local participation and incorporating environmental considerations into their programmes.

3. We support the work of the Commission on Sustainable Development in reviewing progress in the implementation of the Rio process. We look forward to the implementation of the Conventions already concluded, in particular those on biological diversity and climate-change and in this respect we will work for the success of the forthcoming Conferences on these subjects in Nassau and Berlin.

4. We welcome the restructuring and the replenishment of the Global Environment Facility (GEF) and we support its choice as the permanent financial mechanism of these two Conventions.

We welcome the recent conclusion of the Convention on Desertification and the results of the Conference on Small Islands, which add to the framework agreed in Rio.

5. We are determined to speed up the implementation of our national plans called for under the Rio Climate Treaty and we will each report what we have achieved at next year's Summit. We also recognize the need to develop steps for the post -2000 period.

Developing countries

1. We welcome the economic progress of many developing countries. We are concerned, however, by the stagnation and continued poverty in some countries, particularly in Africa. Since rapid population growth has aggravated poverty in many countries, we stress the importance of a positive outcome of the Cairo Conference on Population and Development.

2. We are committed to continue our efforts to enhance development assistance as well as promoting trade and investment in developing countries.

We are encouraged by significant private capital flows to developing countries and by the efforts of many of these countries, particularly in Latin America and Asia, to increase trade among themselves.

We call on the World Bank as well as the regional development banks to strengthen their efforts to reinforce private capital flows to the developing world while providing growing resources for health, education, family policies and environmental protection.

We encourage the Paris Club to pursue its efforts to improve the debt treatment of the poorest and most indebted countries. Where appropriate, we favour a reduction in the stock of debt and an increase in concessionality for those countries facing special difficulties.

We welcome the renewal of the ESAF and the measures under consideration by the IMF to increase support to developing countries and to ensure that all members take part in the SDR system. In addition we agree to explore ways to mobilize more effectively the existing resources of the International Financial Institutions to respond to the special needs of countries emerging from economic and political disruption and the poorest most indebted countries.

3. In the Middle East, economic development is essential to underpin the peace process. Thus, along with others, we are providing financial and technical assistance to the Palestinian Authority and are working to promote co-operation and development in the region. We call for an end to the Arab boycott of Israel.

We warmly welcome South Africa's transition to full democracy. This will open up new opportunities for trade and inward investment. We will provide further assistance to help strengthen economic and social development, in particular for the poorest groups. Not only the people of South Africa but also her regional neighbours have much to gain from steady economic policies that unlock her full potential. We also welcome the adjustment measures taken by the countries in the CFA Franc area after the recent devaluation and the prompt support from the International Community.

Nuclear safety

1. We welcome the progress made in the nuclear safety programme, agreed by the Munich and Tokyo summits, concerning the countries of Central and Eastern Europe and former Soviet Union.

2. An effective framework for co-ordinated action is now in place. The World Bank, working with other lending institutions including the EBRD and the EIB, and with the IEA, is helping countries develop long-term energy strategies. Some near-term safety improvements are on the way. More needs to be done and longer term actions must be carried out. The IFIs are invited according to their mandate to make full use of their lending possibilities for this purpose.

3. We remain committed to the existing international initiatives to promote an early closure of high risk reactors. The closing down of the Chernobyl nuclear power plant is an urgent priority.

We are therefore putting forward to the Ukrainian Government an action plan for the closure of Chernobyl. This plan will require measures to be taken by the Ukrainian authorities as well as financial contributions from the international community.

The closure of Chernobyl would be accompanied by the early completion of three new reactors to adequate safety standards, by comprehensive reforms in the energy sector, increased energy conservation and the use of other energy sources.

4. In this context we welcome the contribution by the European Union. As a further step we are ready to provide for the Action Plan an initial amount of up to US$200 million in grants, including a replenishment of the Nuclear Safety Account for this purpose. In addition loans should be provided by the IFIs.

We call on other donors and international financial institutions to join us in supporting this action plan and will review progress regularly.

Ukraine

We wish to see a stable and independent Ukraine.

We welcome the Trilateral Statement, Ukraine's ratification of the START I Treaty, and steps to remove nuclear weapons. We look forward to Ukraine's accession to the NPT as a non-nuclear weapon State.

But we are deeply concerned about the economic situation. Genuine reform is the only way to improve the economy. We urge the Ukrainian Government to design and implement rapidly stabilization and structural reforms, including price liberalization and privatization. This would provide the basis for IMF lending and for substantial loans by the World Bank and the EBRD. We are committed to support comprehensive reform efforts through intensified technical and financial assistance and by facilitating improved access to our markets for Ukrainian products.

With a renewed commitment to comprehensive market reform, Ukraine could gain access to international financing of over $4 billion in the course of a two year period following the commencement of genuine reforms.

We endorse the proposal for a conference on Partnership for Economic Transformation in Ukraine to be held in Canada before our next meeting.

Russia

1. We recognize the historical dimension of the reform process in Russia. We are encouraged by the commitment to reform, both political and economic, of the Russian leadership and by the progress made so far.

2. The approach we endorsed in Tokyo last year is producing results. We welcome the agreement with IMF on an economic programme and the recent series of loan agreements with the World Bank and the EBRD. We encourage Russia to work with the International Financial Institutions to stabilize the economy, reinforce the reform process, and reduce social hardship.

The increases in IMF limits, provision of SDRs to new IMF members and acceleration of World Bank lending that are now under consideration will significantly augment the ability to support Russian reform efforts. The recently agreed comprehensive rescheduling of Russia's 1994 debt obligations will also help.

We continue to look to the Support Implementation Group to help remove practical obstacles in Russia to our support efforts.

3. Mobilizing domestic savings for productive use and attracting foreign direct investment will be crucial to the success of Russia's reforms. We therefore urge Russia to improve the legal and institutional framework for private investment and for external trade. We ourselves will continue to work with Russia towards GATT membership, in order to advance Russia's integration into the world economy and further improve access to our markets for Russian products.

4. We will continue to support reform in Russia.

Other countries in transition

We welcome the progress made and reaffirm our support for the reform efforts of the countries in transition.

In particular, we commend the political and economic transformation of the Central and Eastern European Countries and support their integration into free market.

Co-operation against transnational crime and money-laundering

1. We are alarmed by the growth of organized transnational crime, including money laundering, and by the use of illicit proceeds to take control of legitimate business. This is a world-wide problem with countries in transition increasingly targeted by criminal organisations. We are determined to strengthen international co-operation to address this situation.

We welcome the UN Conference on Organized Transnational Crime to be held in Naples next October.

2. On money-laundering, we recognize the achievements of the FATF, which we set up in 1989, and reaffirm our support for its continued work over the next five years. In order to achieve our goal, we agree that countermeasures need to be implemented by FATF members and other countries with significant financial centres. Ultimate success requires that all Governments provide for effective measures to prevent the laundering of proceeds from drug trafficking and other serious crime or offenses which generate a significant amount of proceeds.

3. We urge countries to adopt necessary legislation wherever appropriate.

Next summit

Our discussions this year have convinced us of the benefits of a less formal Summit procedure, as we agreed in Tokyo last year. In Naples, we have been able to have a freer exchange of views and to forge a closer understanding between us. Next year we look forward to an even more flexible and less formal summit.

We have accepted the invitation of the Prime Minister of Canada to meet in Halifax in June 1995.