PREAMBLE
1. We, the Leaders of the Y20, held our second meeting in Seoul on August 24, 2010 amidst the stage of recovery in the global economy to emphasize the importance of international coordination and to push forward regulations and reforms for world economic stability.
2. When we last met in June, we reviewed the agreements and progress made in the Group of twenty Ministers and Leaders Summit. As an extension, we searched the initiations and dare solutions that will bring changes to the global economy from the young perspective. Upon the necessary steps taken by G20 member nations, we further stretched out to discuss on the controversial, yet paramount topics that we believe should be promoted for the healthy stabilized global economy.
3. The process of recovery and stabilization has been faster than anticipated nearing a state of normalcy. However, full revitalization of secured economic steadiness still remains one of our greatest assignments due to the volatility in financial markets and the unstable structures of the current global economic status.
4. Today, we agreed upon major reformations of financial regulations of private financial institutions, companies and banks. Although we recognize that too much pressure may drag the current recovery stage economy fall back into double dip recession, we are also concerned of the problem of capital volatility and crisis contagion. Hence, we must achieve this dual goal of not discouraging transactions but at the same time maintaining the stabled financial conditions.
5. We committed to act together and pledge to adopt the policies needed to lay the foundation for strong, sustainable and balanced growth in the 21st century. Our framework for Strong, Sustainable, and Balanced (SSB) growth for the global economy is to encourage well coordinated economic policies that are consistent with appropriate fiscal policies; sound regulatory policies; fair and open free trade; and international cooperation. We also believe that International Financial Institutions (IFIs), i.e. IMF and WB, should provide nations with candid, independent and end-ended surveillance and fair regulations to prevent future crisis and provide proper monitoring of countries.
6. At the same time, we highly promote healthy global growth and balanced development. We put greater emphasis on the basic necessities provided to the Least Developed Countries and ask for global cooperation to make these urgent needs available and affordable to the general public. Also, financial support or encouragement of dept relief programs should be highlighted for long-term sustainability.
7. We realize the seriousness of climate change and greater demand for green technology. Thereby, we suggest knowledge and technology transfer between and among countries.
8. Along with the actions taken for economic and development issues, we would like to propose Y-20's unique Agenda of Human Security which has risen to an impending issue, and we have worked together for the past months, with the sincere acknowledgement that the definition of human security arises out of how to frame a feasible and coherent set of priorities for concerted action. We are determined to take the concerted actions stated below and thereby pledge the full obligation and acceptance of the following declaration.
9. In order to work within the framework to encourage sound financial and fiscal system, and to deal with the problems of development and human security issue, the international community should put collaborative effort for both recovery and balanced development. We should find more common denominator and reduce disagreements in policy making. We should, furthermore, try to see the world in a wider perspective with broader objectives. We are here to construct better future not simply to discuss on how to overcome crises, and promote well-being of global society.
Actions to be taken
Agenda on Reformation of Financial Regulations
Today, we agreed:
To set aside the discussion on implementation of Exit Strategy for the time being since this policy should consider each nation's economic situations, what we want to achieve from this Summit is to set a general holistic framework for future crisis. Thus, we would like to put more focus on fiscal consolidation, which is further pointed out on the agenda of Framework for Strong, Sustainable and Balanced Growth, to overcome the current crisis.
To recognize the need to protect emerging markets that have sound economic fundamentals from external shocks, and thus call upon G20 members to agree to introduce a new system, Global Financial Safety Net, under the IMF to assist those emerging markets.
1. We believe there should be a system under IMF that assist financially to these developing countries where economic fundamentals are sound but are vulnerable from outer impacts from other countries and this system should customize regulations for different economic circumstances of the countries.
2. To distinguish Global Financial Safety Net from the original Standby Arrangement (SBA), we ask IMF for an adjustment of Flexible Credit Line (FCL). FCL is expected to be especially useful for crisis prevention purposes. FCL arrangements would be approved for countries meeting pre-set qualification criteria. FCL would be determined on a case-by-case basis. At the heart of qualification of countries is an assessment that the member (a) has very strong economic fundamentals and institutional policy frameworks; (b) is implementing-and has a sustained track record of implementing-very strong policies, and (c) remains committed to maintaining such policies in the future. We agree that GFSN should not become a blind bailing out system.
3. We would like to emphasize again that this Safety Net is offered to those countries with sound economic fundamentals. We acknowledge that GFSN should not act as an "emergency assistance" to any countries that suffer from the crisis, but as a selective assistance. We call upon IMF to focus more on enhancing their transparency credibility and accuracy in observing member nations and their annually reports. We believe it is important to prevent moral hazards when it comes to risk investors and hot money issue. To do so, we ask IMF to provide credible reports of all member nations' economic status and general information and wishes support from WB as well.
4. Before reaching IMF as the last resort, GFSN promotes other possible measures to prevent crisis contagion; when national level of prevention fails, we welcome a regional or multilateral cooperation for currency swap, or creation of regional monetary funds. We acknowledge that when the crisis happen, it will be dealt first at national level, then regional and lastly IMF defense. However the reminder lies on the fact that IMF's empowerment is somewhat limited to monitoring; it cannot enforce antrging on a country unless it is called upon. We here highlight the fact that not all the burden depends on IMF's decision.
5. Agreeing upon the framework of GFSN, Lastly, we believe that adequate ratio or proper percentage of tax fixed according to a certain global standard can act as to reduce the number of risky investors or money borrowers, as well as reducing the risk financial institutions or the country itself may encounter. This is to provide a guideline to recover on their own rather than making them become totally dependent towards the international organizations, or to enhance their own responsibility.
To take measures to prevent future crisis by setting some more rules and actions and regulate banks and financial institutions from risky investments and speculations.
6. Regarding the Bank Levy issue, we agree that is again democratic value of liberalism, and also assert that it is like punishing the whole global banking industry for the mistake of some banks.
7. To follow the steps taken from Toronto meeting, we highly respect individual nation's sovereignty regarding their economic status. We agree that governmental intervention is necessary to carry out effective and efficient implementation of the economy, but we do not enforce too much oppression on majority of banks for the mistakes done by minority of them.
8. We give our consent upon reasonably uniform Capital Adequacy Ratio (CAR) for banks in the international society. Reasonably uniform means having a standard according to each nation's capacity and allows some range of fluctuation.
9. We believe it is a realistic decision to set a range of CAR. We respect that each country has a different economic status and support Basel Committee on Banking Supervision (BCBS). We use the Basel capital framework to define and calculate CAR. According to the framework, the more pronounced risk profile, the higher CAR may be warranted. Specifically:
Some specialized microfinance institutions may lack investors/owners that are able to (1) respond promptly to calls for capital and (2) scrutinize management critically to protect their investments, which may inhibit maintenance and growth of the capital base.
Management and staff of microfinance institutions may be relatively inexperienced participants in the formal financial sector. At the same time, the supervisory agency may also be inexperienced at judging and controlling microfinance risks.
New - and even seasoned - microfinance organizations tend to grow faster compared to traditional banks, which puts a heavy strain on managerial resources and information and monitoring systems.
Capital may also deteriorate more quickly as a result of delinquency and loan losses in a specialized microfinance institution or limited scope cooperatives than a commercial bank. This is due to the relatively higher upfront lending costs that cannot be offset by revenue sour.
10. We also recommend transparency and stricter oversight on banks' balance sheets.
11. We believe that "too big to fail" problem would be alleviated to a large extent if we put big banks at the end of the range. We shall put big banks with a lot of idle money be allowed to stay at the lower end of the ranges so that they can invest more. All in all, we believe that banks should feel more responsible with their behavior.
12. We concede that regarding reformation of financial institutions, the Volker Rule and Glass-Steagall (GS) Act should be tackled.
To strengthen international Monitoring Agencies
13. We recognize the importance of strengthening international community to be more responsible about addressing issues regarding each nations economic condition to prepare for potential crisis and have better understanding about the current economic situation while respecting each nations own capability of examine such issues.
14. Existence of international organizations such as but not limited to the International Monetary Fund, the World Bank, and the World trade organization to actively engage with member states to prepare a potential economic down turn resulting from negligence of the status quo.
15. Given the situation we had suffered since 2008, we believe it is crucial to have national governments agreeing to make the central banks of the countries more pro-active in dealing with oversight of the country. It was apparent for us to now that countries with active central banks withstood the crisis better. We believe making central banks more accountable would be practical and wise.
16. With central banks having the real authority over the economy of the country, we suggest a new watchdog system operated under the IMF for sufficient and effective surveillance and supervision. The watchdog should respect each nation's autonomy to a certain extent. However, excessive freedom should be supervised under the IMF system to prevent another financial crisis of 2008. Acknowledging the fact the IMF cannot prevent crisis, IMF should be able to at least oversee current situation and trends and give advices concerning economic policies to certain nations. One way of efficiency is having IMF alert central bank thereby preventing or handling a crisis at an earlier stage.
i) IMF will monitor policy implementation by governments around the world and has been asked to beef up early warning systems, along with the financial Stability Forum.
ii) With IMF keeping its neutrality, IMF can analyze the relationships between financial markets and the real economy with its global perspective given its membership. IMF expects the global and country monitoring procedures ro work as an early warning.
iii) IMF has been watching countries how they manage and implement economic policies. We supports IMF in this regard that it should work to complement loopholes of IMF without creating new agencies to replace IMF or share the burden of IMF.
Agenda on Framework for Strong Sustainable and Balanced Growth, Trade Issues and Reformation of International Financial Institutions.
To specify and implement the framework that presents guidelines for sound government fiscal policies and fair, however in the long-run, free trade to generate strong, sustainable and balanced growth.
17. We propose a change in the transactions between banks and agencies when advising on services from private small and medium size banks. The current structure causes a certain conflict of interest or moral hazard when the Credit Rating Agencies (CRAs) are enquired of a bank's products because banks pay CRAs for their evaluation. We recognize that the conflict of interest contributed to the financial crisis. We feel that these services should be provided by industries in a monopolistically competitive market (allowing more differentiated firms to participate) and financed by individual investors (consumers) instead of the banks (producers) The criteria in evaluating both public and private CRA should follow the standards that has been decided by the IMF.
18. We believe the Credit Rating Agencies that monitors major banks and companies should also have certain regulative system. Under the national governments. The current structure of the CRA markets is favorable to the banks and camouflages the true picture of those institutions that originated the crisis. Therefore, we emphasize the need for an agency under the umbrella of the national governments that would monitor CRAs. We do not ask IMF to give full and direct regulation and monitoring to all private sectors, but to provide standard and guidance for strict rule. Financial Credit Rating Agencies must follow a strict rule provided by the international organizations to gain transparency and fairness and maintain a healthy and credible authority.
19. We call for greater focus on the proper control of the house pricing to prevent future crisis generated by the collapse of the 'real estate bubble'. The approaches can be diversified depending on each nation's economic structures and policies.
20. The countries with significant fiscal challenges need to accelerate the pace of consolidation. Fiscal consolidation plans will be credible, clearly communicated, differentiated according to national circumstances, and focused on measures to foster economic growth. Thus, plans for credible, medium-term fiscal consolidation that would not distracting the recovery of each country, is necessary. We are committed to follow the credible and "growth-friendly" medium-term fiscal adjustment plans, which may include legislation creating multi-year targets, the plans need to be alongside the reforms to pension entitlements and public health care systems.
A. In order to sustain recovery, create jobs and to achieve stronger, more sustainable and more balanced growth, G20 nations must follow through on fiscal stimulus and fiscal consolidation plans as soon as possible. Economic crisis comes without any warning; we must be prepared with sound fiscal finances.
B. We should consider more on long term, and growth-oriented fiscal policies. These policies go beyond fiscal sustainability: it also includes issues of tax policy and development, composition of public expenditure, and sub-national finance. Especially, we would like to point out that adjustment in retirement ages are needed. The changes will be gradually phased in to take full effect as soon as possible.
C. We recognize the need to control sovereign debt and to run a fiscally solvent budget. Thus we propose that, should governments feel the need to extend economic stimulus packages, a clause pledging decreases in government spending be included. Within 10 years, it is recommended that sovereign debt be reduce to financially secure levels by means such as raising taxes and reforming social welfare programs that are defunct.
D. We also realize that fiscal consolidation will have major repercussions for many nations in the short run. Therefore we do not agree to any radical cutting back on public spending in the light of the Euro Zone crisis, and believe that economic contraction policies could trigger a double dip recession. We suggest a "much more calibrated" fiscal consolidation.
21. The countries suffering from this crisis need to expand the government spending at the same time cut back on the deficit. We argue the need to share the knowledge and ideas with other countries to achieve twin goals of fiscal stimulus and economic stabilization. There are two ways-(1) Pay-Go policy, (2) Kanesian (Kan Naoto + Keynesian)-to achieve dual goals. We believe each nation and IFIs observe two policies and share the knowledge about these polices for the future application by each country.
22. We firmly believe that the other nations with significant budget deficit should report their structural reform to the IMF and have their reform bill checked by the IFIs whether their policy is on the right track. To initiate the structural reform, we believe that nations that are under economic crisis especially those who majorly suffered from sovereign debt should annually report their economic progress, openly to other countries and financial agencies, in accordance to the reforms.
To promote fair and free trade, countries should reject protectionism and refrain from raising trade barriers that hinders free flow of commodities. Also, fair trade is the fastest way toward the friendly international integration and unification. This is a key aspect if we as a global citizen are to come across the diversity among people and create a single coordinated system of collaboration, which is to be applied to all divisions in trade. Especially, when it comes to trade between developed and developing countries, there should be a certain system to balance the commodities' value and help emerging industries in developing countries. 'Fair trade' is defined as fair outcome and results by trades and 'Free trade' as free chance to compete in the market.
23. (Germany) In order to promote pro-development, open, and non-discriminatory trade, we would like to suggest countries to give more attention on Doha Development Agenda and once again discuss this as important agenda in the world trading system. We strongly ask all the members of WTO for a more flexible and cooperative posture in order to complete DDA, and would like to support WTO to take the lead in concluding DDA.
24. We welcome WTO's proposal of a new Quota Voting System as follows:
A. Participants of the negotiation table should proceed through a scan and filtering process so as to employ a fixed number of significant modalities for the agenda. However, for the efficiency of the procedure, we propose the quota voting system to be utilized in this process. And only after the modalities have been settled, the single-undertaking system will help to reach a consensus on the contents of the modalities.
B. An exact deadline must be assigned for each modality as well as the consensus of the agenda in order to bring forth the political willingness of the settlement and the flexibility to compromise in the negotiation. Yet, each nation should have enough time to have a close examination and study of the modalities and the agenda so as not to rush to add a new sector or turn down the ones already mentioned.
25. We remind global society that trade protectionism impedes national developments by hindering free flow of commodities and reduces diversity for the global consumers. Trade barriers such as subsidies and high tariffs should be reduced gradually according to individual countries' conditions and circumstances, and finally eliminate in the long-run.
26. We encourage the transfer of advanced technology and human resources from developed to developing countries and ask developed countries to share the basic necessary skills and knowledge with the emerging industries of developing countries. This is another way of helping the industries and governments of developing countries to enhance their competitiveness. However this transfer should be made through the market and educational institutions, where incentives must be ensured to the senders as well as the receivers.
27. We believe that all Less Developed Countries should enjoy special and differentiated treatments in trade agreements.
C. "Special products" and "Special safeguard mechanism" treatment granted to developing countries
D. Flexibilities given to developing countries for them to better adapt to world trade liberalization in the form of meaningful special and differential treatment
E. "Early harvest" benefits offered to developing countries.
28. We call upon more developed member states to demonstrate "more political will and more substantive flexibilities, especially on the proposals for Agreement-specific Special & Differentiated (S&D) provisions for Least Developed Countries. For the countries that depend heavily on international export markets, we emphasize the need for an active WTO to keep foreign markets open.
To take steps in reformation of International Financial Institutions majorly IMF and WB to redeem their legitimacy, fairness, and effectiveness as inter-governmental organizations. We also encourage nations to be domestically more preventive and defensive in their first management of crisis.
29. We recognize that IMF should remain a quota-based organization and that distribution of quotas should reflect a country's contribution to the Fund as well as its position in the world economy. However, in the recent years we witness the emergence of new dynamic markets. In this regard, the 2008 IMF Quota and Voice Reform proposal, which changes the quota calculation mechanism, should be ratified in quick and responsive manner and reform IMF's voting quota by the upcoming Seoul Summit in November 2010.
30. We request IMF to take more flexible and appropriate policies and regulations according to individual nation's economic circumstances and structures. IMF has the ability and credible criteria to evaluate whether a certain country is financially healthy and safe. Hence, IMF should implement policies that are more customized and localized to each nation. For customizing, IFIs need to cooperate with national governments and for localizing, share information and strategies with multilateral regional banks.
31. We also encourage the IMF to employ more citizens from emerging economies, thus promoting diversity of staff within IMF organization. The completion of implementation of such reforms particularly on the governance structures of the IFIs will ensure that developing countries have sufficient representation in decision-making of policies which impact their economies. These should come alongside structures to reinforce accountability, strengthen the participation of the fund governors in strategic oversight in order to secure transparent and merit-based selection of IFI management. Due to their vital role in development and economic growth the G-20 may consider inviting the African Union (AU) and African Development Bank (ADB) to participate in future summits and meetings.
32. We repeat that there should be less dependence on US dollar as a world reserve currency which was continuously mentioned during the previous meetings. Nations have come to realize the importance of the issue and there are two main ideas as how to minimize the dependency on US dollar as a primary reserve: to either modify IMF's Special Drawing Rights or to diversify holdings into a basket of currency reserves.
33. We would like to encourage each nation to establish Sustainable Economic Strategy Institutes (SESIs) and develop comprehensive economic strategies encompassing both short-term and long-term concerns. Thus, we propose that every government establish national institutes that would research into alternatives for Keynesianism.
34. We propose a well designed and viable technical assistance package to boost tax collection capacity and support efforts by developing nations to proactively track down illicit or looted funds through such frameworks as the Stolen Assets Recovery initiative (SAR). We believe that tax havens should be monitored via measures such as multilateral tax information exchange treaty and by upgrading the UN Tax Committee. Specific efforts should be directed to increasing the transparency of the extractive industries and the banking sector in developing countries.
35. We also suggest strengthening cooperation among regional monetary funds in order to make governance more effective - facilitate swapping between nations within and across regions and make regional monetary funds work closely with each nation and collect voices of nations within the region.
Agenda on Development Issue
Greater emphasis must be put on raising public awareness about preventable diseases and hygiene through effective public health initiatives. At the same time, there must be global cooperation to make healthcare more affordable and accessible to all.
36. We recognize that access to healthcare is one of the fundamental human rights
and solving health problems in vulnerable countries is one of the most important steps towards building a strong human infrastructure for development. In this regard, raising public awareness about various preventable diseases is important. Particular emphasis must be put on educating people at the grass root level about hygiene and the basics of healthcare. This is crucial for combating both child as well as maternal mortality.
37. We express our firm support for the global fight against HIV/AIDS. Once again, raising awareness about disease prevention and programs targeted at sexual and reproductive health are some of the key aspects of tackling this challenge. At the same time, improved treatment, through access to affordable ARV(Anti-retroviral) care and support for people suffering from AIDS is called for.
38. To achieve the healthcare goals, particularly the ones outlined in the MDGs, a strong, efficient and transparent public health system is required. This should be based on accessible and affordable healthcare for all. Since the most vulnerable people are usually poor or live in isolated communities, it is critical to involve them in seeking the solution, through community based health programs. National healthcare policies should strive to provide adequate training to medical personnel and monitor the effectiveness and quality of existing facilities and services. In the international level, IMF collaborating with WB, helping poor countries to improve their public expenditure management systems and ensure that funds, including all health programs, are used efficiently and transparently, especially by focusing on Poverty Reduction Strategy Papers (PRSP).
39. We realize that one of the major stumbling blocks to providing accessible healthcare facilities are the business interests and the issue of pharmaceutical patents (Indonesia) and increasing the transparency of the process. However, there are a significant number of healthcare programs running in various countries across the globe that provide quality healthcare to the needy in a self sustainable manner without the requirement of external aid. We believe that with cooperation, coordination and an innovative approach, the issue of affordable accessibility can be effectively addressed.
We have to ensure that food security would be the stepping stone for effective poverty reduction, since food is the most basic human needs. Affordable accessibility of quality food products through enhancement of agricultural productivity and sustainable farming practices should be emphasized. At the same time, institutional changes aimed at rural development, efficient storage and distribution of food grains will ensure efficiency in the food supply chain. Policies aimed at preventing food price spikes and practices that distort food prices, should be handled in a globally cooperative manner.
40. We agree that the use of technology to enhance agricultural productivity is one the key requirements of solving the problem of food security and allowing nations to be self-sustainable with food production. Simultaneously, we should also focus on the efficient storage and distribution of food grains through improvement of domestic market infrastructure. This would require investment in agriculture and access to up-to-date farming technology.
41. The long term food security issues are tied with sustainable and responsible farming practices. Issues like the usage of energy and groundwater resources for agricultural purposes and their long terms effects also need to be carefully considered. Policies aimed at improved incentives for such practices, rural development, agricultural restoration, direct transaction between importers and exporters and providing cover to poor people against food price shocks should be encouraged.
42. While free trade is encouraged, we must see to it and make sure that, policies and practices that distort the global food market leading to food price inflation, is monitored and regulated in a coordinated manner. In this regard, two particular issues are that of bio-fuel subsidies and the speculative trading in food grains. They have been dealt with more specifically in the other sections of this communiqu?. Speculative trading in specific - the tariff regulation of food grains must be addressed by the national government itself, since food is indispensable for a nation to survive, especially to those of developing countries that heavily rely on 1st industry. This will make a stable ground for rural development and lead to improvements in domestic market.
43. Food security is also one of the key steps towards poverty reduction. However, combating poverty reduction would require provision of a host of other essential services including financial inclusiveness, access to education and updated technologies particularly in the LDCs taking to account the social, political, cultural and geographical uniqueness of the contexts of application.
An internationally coordinated approach in creating early warning systems through effective risk assessment and seamless flow of information between countries is necessary. The lack of availability of disaster insurance makes poor people particularly vulnerable. Innovation is needed in this area to at least partially mitigate this. Emphasis should also be put on preparedness and rapid response mechanisms
44. We believe that there is a need to act in a coordinated manner in tackling natural disasters. To achieve this, there is a need to install mechanisms that make the seamless flow of information between countries possible. This mechanism would focus on disaster prevention, early warning systems, assessment of risk and vulnerability of the local population and an efficient rapid response mechanism. These scientific information and technology could be gained through the ISDR (International Strategy for Disaster Reduction), by all nations participating in providing their natural disaster related information.
45. In light of the mutually reinforcing nature of vulnerability to natural disasters and poverty, we realize that the lack of availability of disaster insurance to poor people is a problem that puts a lot of burden not only on these people but also on the respective government engaged in the post disaster reconstruction works. We believe that the funds allocated for disaster relief should be strongly organized so that its transparency and accountability can be guaranteed.
Empowerment of people through access to quality education, decent jobs, free flow of information, access to essential services are some of the outcomes of effective governance. These however, at the same time, strengthen the process, reduce corruption and ensure transparency and accountability.
46. Corruption is one of the main reasons why the implementation of sound policies is hindered. We strongly believe that combating corruption should be one the pillars of good governance. This includes sound public resource management, tax administration, financial sector soundness and combating the financing of terrorist activities. In order to reach the state of good governance, all the nations should cooperate with one another, by providing advice, and surveillance roles. The Code of Good Practices on Fiscal Transparency which was developed by the IMF aims to encourage a better-informed public debate about the design and results of fiscal policy, and greater government accountability. The Code of Good Practices should be also followed by other international organizations such as WB.
47. We recognize that access to proper and affordable education, decent jobs, adequate public services, free flow of information and raising environmental awareness are critical in achieving self sustainability of poor countries. The small and medium sized enterprises should be encouraged to function, through policies that assure financial access for them.
48. We recognize that access to proper and affordable education, decent jobs, adequate public services, free flow of information and raising environmental awareness are critical in achieving self sustainability of poor countries. The small and medium sized enterprises should be encouraged to function, through policies that assure financial access for them.
Effective combating of climate change involves innovation, sharing of technology, stable financing and accurate assessment of long term costs of current actions. It is important to incentivize environment friendly processes and energy efficient systems, in order to absorb the negative externalities that are imposed by the current situations. Technology transfer is likely to reduce the difference in priorities that exist between different countries for combating climate change and allow integrated approach towards meeting challenges of sustainable development.
49. There is a need for large scale and stable financing to support actions on climate change. This would require an innovative approach to seek financing with emphasis on coordination, commitment and burden sharing. One of the possible sources of this funding can be the Emissions Trading Scheme (ETS) which would ensure that the real costs of pollution are borne by the emitter.
50. Technology is one of the most important pillars of our fight against climate change. To bring parity in the development gap that exists between various countries, we encourage the transfer of technology that reduces this gap and moves combating climate change up the list of priorities for all countries. With proper access to technology and effective management, previously untapped resources can be exploited without any adverse effects on the environment and ensuring that the benefits are distributed uniformly across the society.
51. We encourage the expanding use of alternative sources of energy and improvement of energy efficiency of existing systems. However, it is also equally important to evaluate the long term costs that will be incurred by these forms of energy resources. We must not create new problems in our effort to solve existing ones. In this regard public-private partnerships are likely to offer interesting solutions.
To encourage the transfer of Green technologies, however, we also need to consider the payment for the intellectual property
52. Green economy should be discussed on the world level and it is a matter of timing, Therefore, we are willing to provide developing countries with technologies of which the patency is expired in an effort to help make their environment healthy
53. As the developing countries pursue economic development with new approaches amid their integration into the global economic, there is urgent and soaring demand for climate-friendly technologies. To achieve effective access and use of green technologies, the rich nations should remove barriers trade policies vis-?-vis intellectual property regulations that render procurement of these technologies unaffordable. In reference to the recent breakdown in negotiations at the United Nations climate conference in Copenhagen, Denmark, seeking to eliminate tariffs on green technology, there is a need for innovative approach to green technology acquisition, transmission and application so as to balance the demand among developing nations. One prospective solution to overcome the high costs of technology dissemination could involve the creation of a global exchange forum in which transnational green technology holders, green venture capitalists, and developing country entrepreneurs could broker for efficient allocation of investment, resources, and technologies. We believe that a coordinated effort among global leaders in the development and implementation of green technologies will help to build sustainably societies across the globe.
Aid must be used to build trade capacity and promote South-South trade. Public-Private partnership and oversight for both meeting commitments to provide aid and its transparent and effective utilization is necessary.
54. We realize that there is a need for renewed assessment of the debt relied mechanisms and aid for trade. It is also important to strengthen the lending framework to countries with relatively strong economic fundamentals and incentivize countries towards meeting their commitment towards providing aid. Initiatives like Multilateral Debt Relief are likely to increase fiscal space of many poor countries.
55. It is also important to focus on building and improvement of trade capacities of poor countries. This is likely to increase the so called 'South-South' trade and insulate the poor countries to some extent from the volatilities of the global market as well as recover from economic downturns.
Agenda on Human Security
To share ideas and views in order to solve the human security problem of the refugees suffering from natural or manmade environmental disasters and would like to bring a rather new concept of "Environmental Refugees."
56. The Y-20's highest priority is to appropriately and correctly consolidate the definition of "Environmental Refugees," since 50 million Environmental Refugees are not yet recognized by world convention. We agree to the following definition of "Environmental Refugees" as the people who are permanently or temporarily displaced by the natural or manmade environmental disasters.
57. Y-20 proposes all member states to be aware of the ongoing problems, and the need to adopt resettlement plans that include following aspects:
Adequate preparation
Willingness and participation of migrant
Willingness and participation of hosted population
Adequate fund
Social integration
Education
58. We recognize the pronounced attention in refugees caused altogether from international conflicts and from environmental disasters. Thus we further acknowledge the need to support the international organization and NGOs, especially to enumerate environment migrant/refugees, and find additional resources for humanitarian assistance. We thereby welcome the recognition of basic human rights in regard to subject of Environmental Refugees. We are hereby committed to bring the solutions to the following problems: the lack of NGOs that are supportive of environmental refugees, complicated procedure on receiving environmental refugee status.
59. Y20 also calls for UNHCR, the UN authority on refugee issues, to officially define and recognize its responsibility for environmental refugees, and work further on defining the different status and conditions for the terms of 'environmental migrant' and 'environmental refugee' taking into account:
Lack of official UN recognition of the existence of environmental refugees, making concrete international action on displaced people difficult,
Island countries and low-velocity countries that are in serious danger of environmental refugee crisis in the coming decades through rising sea levels et cetera,
The difference between permanently and temporarily displaced people regarding the right to request permanent residential status in foreign countries.
60. The members of G20 agreed to set up Environmental Refugees Assistance Program (ERAP)-similar to the concept of multilateral foreign aid - will fund safe shelter, food, medical care and education for ER. This will:
Be in the hands of G20 official and expert panels from respective 20 delegations.
Be tasked to allocate and monitor the funding UNHCR or other international NGOs renowned for their contributions in this field for more than a decade to assist the refugees in need.
Collect foreign aids and contribute it to use the funds for basic needs such as but not limited to equipments, personnel, facilities, and so on, since G20 nations are covering about 80% of the whole world GDP.
Research, and make annual reports as well as recommendation on source of funding: how much and which nations will pay.
Operate independently from any other organization, meaning that the governance of the agency under which ERAP will be operated will be free from any political pressure from any organization.
Be reformed in terms of structure and strategy every 5 years, if neccessary, based on the results and achievements it has made in order to maintain the intended efficiency, that is, to confront the environmental refugee issue as effectively as possible through international cooperation.
To regulate counter-terrorism, and find out measure to reduce Global Terrorism threat posed to International Community.
61. The Y-20 condemns all forms of terrorism and is committed to contribute its efforts of countering international terrorism in prevention as well as aftermath of terrorism actions. We are willing to work hand in hand with other international organizations, agencies, and/or other forms of counter-terrorist movements in this effort. We therefore emphasize the need the provision of sufficient and highly successful former militant rehabilitation and de-radicalization programs. We urge the international community to recognize the fact that the defeat of extremism cannot be achieved through hard security measures alone.
62. We recognize the fact that, to comprehensively confront counter terrorism, we should prevent and condemn any sort of hostile movement seeking to groundlessly amalgamate terrorism with different thoughts and philosophies. We call for stronger cooperation among the Y-20 leaders in exchanging terrorism information so as to clarify the causes and results of terrorist acts and prevent any misunderstanding on the relation between terrorism and different thoughts and philosophies. Therefore we believe that regional community can serve as a primary sector in dealing with terrorism.
a. We are calling for a greater cooperation among Y-20 leaders to counter increased threat of terrorism, since we do recognize the concern that foreign fighters are being trained in Afghanistan and gaining influence inside Somalia's al-Shabab militia fueling a radical Islamist insurgency with ties to Al-Qaeda.
Piracy
63. We encourage progress for harmonized combat to counter maritime piracy including the extension of NATO's Operation Ocean Shield and EU NAVFOR's Operation Atlanta to 2012 and adoption of Russian-sponsored UNSCR 1918 (2010), calling for all states to criminalize piracy under their domestic law. The Resolution also asked the Secretary-General to report to the Security Council within three months on "possible options to further the aim of prosecuting and imprisoning persons responsible for acts of piracy."
Y20 believes international movements of illegal/criminal assets are the source and result of various criminal activities including terrorism, piracy et cetera, and anti-money laundering must be prioritized in order to disable the current intensity of cross-border crimes.
64. Y-20 Leaders acknowledge the fact that specific legal and institutional design of anti-money laundering regulation in various nations is in flux and subject to different, and sometimes conflicting, influences, and therefore we strongly support a "command and control" model:
by imposing legal standards on certain - financial and non-financial - institutions vulnerable to money laundering activities
by designing governmental institutions responsible for supervising the implementation of these standards as well as for imposing sanctions in case of violations of anti-money laundering regulations and standards.
65. Henceforth, we believe that there should be internationally agreed standards of regulation. The standards of regulation rest on five approaches.
First, detailed AML operating procedures should be in form of manuals which will be approved by the member states to provide a feedback.
Second, the process of Knowing Your customer (KYC) and the Customer Information Programme (CIP) is one which leading global financial institutions find requires them to constantly update and refine. Therefore, we suggest that we all should require financial institutions to conduct ongoing customer due diligence (CDD) and to conduct enhanced due diligence for high risk categories of their customers.
Third, since transaction monitoring plays a pivotal role in any AML program, in order to enhance them, we strongly assert that not only national financial institutions, but rest of members' to add greater sophistication to their transaction monitoring systems, such as looking at any and all suspicious transactions, and not only focusing predominantly on large transactions. To do so, leading practice banks should implement criteria to define a suspicious transaction and move to automated system to raise their awareness towards any suspicions.
Fourth, the institutions must implement systematic, transparent and effective compliance monitoring and internal audit systems to ensure that program is compliant with laws and regulations.
Fifth, a thorough training program should be implemented at both senior and junior levels. This way, we not only upgrade the institutions' business and its reputation, but also increase the importance of informing and heightening the awareness of AML.
To propose G20 Framework for Strategic Partnership and Cooperation regarding Nuclear Issues and support Non-Proliferation Treaty.
66. We are deeply concerned that there would be no relaxation in the international prohibition of chemical and biological weapons, and in support for treaties dealing with them. Y-20 Leaders highly support the Treaty on the Non-Proliferation of Nuclear Weapons to limit the spread of nuclear weapons. We wholeheartedly seek to prevent weapons from becoming a threat to our people and to the international community. We sincerely hold that "Non-proliferation" -preventing the dissemination of nuclear, chemical, and biological weapons, as well as conventional weapons- is an integral component of protecting populations from arms.
67. We highly support the UN Security Council actions towards North Korea especially economic sanctions since it threatens all East Asia societies. We supported the Six-Party Talks that called for North Korea to return to the table of NPT to handle this problem. We also reaffirm the commitment of the sanctions of UNSCR 1928 (2010) against Iran and seek a diplomatic solution. We call on all nations of the world to support these sanctions.
68. We welcome the "Global Summit on Nuclear Security" which took place in April 2010 especially the "New START" Treaty, signed by President Obama of United States of America and President Dimitry Medvedev of Russia in Prague, on 8 April 2010. This however, is pending for the full congressional ratification.
69. We thereby firmly support the concerted effort of the international community directed at the peaceful denuclearization, alongside efforts to safeguard secure nuclear power across nations.
70. We hold that the military security is an imminent issue that should be addressed in more depth and thus, we request all Y20 member states to communicate on any information available on transfers or activities by peace-threatening states, particularly concerning the proliferation-sensitive nuclear issues, or the development of nuclear weapon delivery systems. This is to enhance monitoring system to prevent all such transactions in accordance with global terrorism and human security.
71. Y-20 Leaders have gathered to agree on the indefinite extension and effective implementation of the Nuclear Non-Proliferation Treaty and to encourage those states that have not yet signed the treaty to do so; because the Treaty prohibits non-nuclear weapons states from possessing, manufacturing or acquiring nuclear weapons. We further call for the early entry into force of the Comprehensive Test-Ban Treaty, which forbids all nuclear weapon test explosions or any other nuclear explosion, and calls on states to refrain from causing, encouraging or in any way participating in the carrying out of any nuclear explosion.
* * *
Today, we committed to follow the statement declared above for our international economic and security cooperation. We will need further elaboration on the relatively new agenda of Y20 summit, Development issue and Human Security. We, Y20 delegates, expect to meet annually thereafter, and in 2011 France Summit.
Annex
Session 1: Agenda on reformation of financial regulations:
Tobin tax arose as the most controversial topic among all others and the following clauses 1, 2 and 3 were strongly promoted by Russia, Germany, EU, and Japan with 11 more nations. However, USA, Australia, and Saudi Arabia with 2 other nations opposed. IMF also strongly disagreed to the idea of Tobin tax. Thus, we agreed to remove it from the communiqu?. IMF also came with a compromising clauses-4 and 5-however, rejected by pro-Tobin tax nations.
1. We believe Tobin tax can remedy the way to fight financial speculations at the first place. We owe to the fact that people who basically use currency differences as their way to get floating money are many and the Tobin tax is one of the most realistic solutions.
2. The core reasons we follow Tobin Tax follow: (a) no one wants speculations, (b) everyone wants to see investments in the long term, (c) every one also wants equal distribution, and (d) everybody wants to have more safe and predictable currency situation. The Y20 also note the concerns of some member states about possible adverse effects of this strategy on over regulation and national sovereignty.
3. The Y20 members agree on an Trial Implementation of the Tobin Tax across all member nations, the effectiveness of which is to be reviewed at the next Y20 Summit.
4. We believe Tobin tax can remedy the way to fight financial speculations at the first place. We owe to the fact that people who basically use currency differences as their way to get floating money are many and the Tobin tax is one of the most realistic solutions.
The core reasons we follow Tobin Tax follow: (a) no one wants speculations, (b) everyone wants to see investments in the long term, (c) every one also wants equal distribution, and (d) everybody wants to have more safe and predictable currency situation.
However, IMF still concerns about the Tobin tax because of the following side effects: (a) it can reduce the capital inflow, break away of capital inflow.(b) it can decrease the amount of transaction and shrink the global stock market. Also it can increase fluctuation of the global stock market (c) To the Less developed country, a small and medium sized enterprise can have hard time to raise funds. (d) Tobin tax can promote the multi-national speculation when this applies to a certain country and not equally to other nations
5. 2010 Y20 summit, we want to emphasize the importance of regulating the way to fight financial speculations for preventing the future financial crisis and promise to put our best effort to find the appropriate solution. We have discussed about the Tobin tax as a solution however not able to make global consensus with this because of few side effects. Therefore, Y20 summit needs to reconsider for the Tobin tax again and recommends to find better alternative solution which based on the fundamental meaning of Tobin tax.
(Amendment for clause 16)
6. With central banks having the real authority over the economy of the country, we suggest a new watchdog system operated under the IMF for sufficient and effective surveillance and supervision. The watchdog should respect each nation's autonomy to a certain extent. However, excessive freedom should be supervised under the IMF system to prevent another financial crisis of 2008. Acknowledging the fact the IMF cannot prevent crisis, IMF should be able to at least oversee current situation and trends and give advices concerning economic policies to certain nations. One way of efficiency is having IMF alert central bank thereby preventing or handling a crisis at an earlier stage.
IMF will monitor policy implementation by governments around the world and has been asked to beef up early warning systems, along with the financial Stability Forum.
With IMF keeping its neutrality, IMF can analyze the relationships between financial markets and the real economy with its global perspective given its membership. IMF expects the global and country monitoring procedures to work as an early warning.
IMF has been watching countries how they manage and implement economic policies. We support IMF in this regard that it should work to complement loopholes of IMF without creating new agencies to replace IMF or share the burden of IMF.
The watchdog should respect each nation's autonomy to a certain extent but supervise excessive freedoms of each nation under the IMF system to prevent another financial crisis of 2008.
Acknowledging that the IMF cannot prevent crisis, the IMF should be able to at least oversee the current situation and trends, and give advices concerning economic policies to certain nations. Having IMF alert central bank thereby preventing or handling a crisis at an earlier stage, could be an example.
Session 2 Agenda on Framework for Strong Sustainable and Balanced Growth
7. Financial sector reform remains a key priority and must be coordinated both within Europe and globally the 3 key reforms are as follows:
Making the labor market more effective
Enhancing labor wage flexibility
Services sectors
The services sector consists of not only the large companies that are household names with large presence (e.g. banks, insurance and accounting firms) but many small companies found in virtually every town, city and rural jurisdiction.
Session 3 Agenda on the Development Issue
8. We express our firm support for the global fight against HIV/AIDS and Malaria. Once again, raising awareness about disease prevention and programs targeted at sexual and reproductive health are some of the key aspects of tackling this challenge. At the same time, improved treatment, care and support for people suffering from AIDS and Malaria is called for.
9. To achieve the healthcare goals, particularly the ones outlined in the MDGs, a strong, efficient and transparent public health system is required. This should be based on accessible and affordable healthcare for all. Since the most vulnerable people are usually poor or live in isolated communities, it is critical to involve them in seeking the solution, through community based health programs. National healthcare policies should strive to provide adequate training to medical personnel and monitor the existing facilities for better quality of delivery, especially to provide clean water and sanitation for everyone.
Session 4 Agenda on Human Security
(Additional clauses proposed in Session 4, but not approved by 20 nations)
10. Y20 fully supports and encourages further commitment to existing AML works, especially the following:
Financial Action Task Force (FATF) and FATF-Style Regional Bodies in their fight against money laundering through continued surveillance of jurisdictions with regulatory deficiencies on the basis of FATF 40 Recommendations for Assessing Compliance and the 9 Special Recommendations on Terrorist Financing;
UNODC-organized GPML (Global Program against Money-Laundering, Proceeds of Crime and the Financing of Terrorism)
IMF model laws for both common and civil law legal systems to assist countries in setting up their AML/CFT legislation in compliance with the international legal instruments (including the 40 + 9 FATF Recommendations)
World Bank and IMF Financial Sector Assessment Program (FSAP) to support robust and transparent peer review through the FSB(Financial Stability Board)
11. We also recognize the security risks posed to the entire region of the Middle East by nuclear weapons program. Any country's possession of nuclear weapons is a highly destabilizing factor in the region that can potentially lead to a domino effect of nuclear armament in an already volatile region. Thereby we recommend those countries in concern to the establishment of a nuclear weapons free zone in the Middle East, in which all participating governments will disarm and in return have their right to develop peaceful nuclear energy guaranteed. For these ends, we recommend the establishment of a nuclear test free zone as a first concrete step in building confidence without waiting for other complex regional security issues to be resolved.
12. Capacity Building
We are building a Counter-Terrorism Capacity Building (CTCB) to assist other states with training, funding, equipment, technical and legal assistance so that they can prevent and respond to terrorist activity. This is to be done within international counter-terrorism and human rights norms, standards and obligations.
Our security today is inextricably linked to that of other states. When they lack resources or expertise to prevent and respond to terrorist activity, the security of global citizens is at risk.
13. There is a need for large scale and stable financing to support actions on climate change. This would require an innovative approach to seek financing with emphasis on coordination, commitment and burden sharing. IMF developed an idea of Green Fund with the capacity to raise the required resources. Also as alternative, we also welcome Korea Finance Corp (KoFC) which starts from South Korea, this August. Other possible sources of this funding can be the Emissions Trading Scheme (ETS) which would ensure that the real costs of pollution are borne by the emitter.
14. The IMF has moved quickly to strengthen its lending framework, including establishing a new Flexible Credit Line to provide large and upfront financing to emerging market economies with strong fundamentals and policies, enhancing the flexibility of the regular stand-by arrangements, doubling access limits for emerging markets and low-income countries, and reforming conditionality to make it more focused and tailored to country circumstances. Also, debt relief provided through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) has increased fiscal space in many poor countries.
WTO Statement on WG3
1. Regarding the background of the global economic downturn, WTO would like to emphasize the importance of Aid for Trade and reinforce its? goals should be accomplish. There is a risk that commitment to meeting Aid-for-Trade targets may falter. Momentum needs to be maintained in securing additional, predictable, sustainable and effective resources. WTO would like to reassure the commitment for Aid-for-Trade among countries and international financial institutions.
2. For sustainability and effectiveness of Aid-for-Trade, WTO would like to promote Mainstreaming" of trade into national and regional economic planning frameworks and dialogues. Mainstreaming is vital key factor to lead Aid-for-Trade as a success because it helps countries and regional economic communities to have better trade objectives with clear priorities.
3. WTO is aiming to enhance the monitor, evaluation of Aid-for-Trade. The aim of the monitoring framework is to promote dialogue and encourage all key actors to honour commitments, meet local needs, improve effectiveness and reinforce mutual accountability. This in turn creates incentives, through enhanced transparency, scrutiny and dialogue (i.e. putting a "spotlight" on progress). It not only fosters synergies between trade and other economic policy areas in developing countries, but also improves the coherence of Aid for Trade with overall donor strategies.
4. WTO suggests support greater dialogue with the private sector on Aid-for-Trade at national, regional and global level.
5. WTO suggest "Post-AfT" for an alternative option when Aid-for-Trade is ended at 2015, depending on the success of this system, WTO would like to think about remaining the system or develop a more effective system that that can accomplish our goals.
6. Need for a multilateral consensus on post-Kyoto protocol Since Copenhagen conference in 2009, there has been no multilateral consensus among member states. The trading system will adjust to the system which is based on the multilateral consensus. WTO encourages all member states to take part in reaching a multilateral consensus on mitigation and adaptation to climate change. Specifically, we promote all member states to make a multilateral consensus on post-Kyoto protocol. As free trade encourages energy efficiency, WTO recommends all member states to conclude DDA in order to facilitate transfer of green technologies, goods and services. The danger of not concluding DDA would increase regional and bilateral agreements which in itself have an increased usage of natural resources.
7. The Millennium Development Goals represent the world?s commitment to deal with global poverty in its many dimensions. The world?s largest economies are failing on their promise to put in place a trading environment conducive to the achievement of the MDGs. The work of the WTO is relevant to achieving a number of Millennium Development Goals, especially MDG 8, which recognizes that, for poorer countries to achieve the other MDGs, it is essential to create an enabling international environment. The WTO?s contribution to creating a stable multilateral trading system is thus crucial to building a more favorable global environment for developing countries.
