1. Commonwealth Finance Ministers met in London from 24-26 September 2002. Her Majesty Queen Elizabeth II, Head of the Commonwealth, addressed the opening ceremony. The meeting was chaired by the Rt Hon Gordon Brown MP, Chancellor of the Exchequer of the United Kingdom.
2. Ministers reviewed the world economic situation, discussed a range of issues that will be considered over the next few days at the annual meetings of the World Bank and International Monetary Fund (IMF), and adopted a Commonwealth Action Plan for implementing the agreements reached earlier this year at the United Nations Conference on Financing for Development in Monterrey, Mexico, and reconfirmed at the World Summit on Sustainable Development in Johannesburg. They also discussed Commonwealth Development Co-operation.
World Economic Situation
3. Global growth has held up better than most expected a year ago, following the tragic events of 11 September 2001. But Ministers noted that the continued recovery is fragile and subject to political, economic and corporate risks and uncertainties. World trade growth in goods and services came to a standstill last year, and is projected to recover only slightly this year. Developing countries experienced a slowdown, particularly in the Pacific and Caribbean regions; and famine in southern Africa is a matter of major concern.
4. Against this background, Ministers agreed that it is more than ever important for all countries to play their part in minimising these risks, to ensure a continued steady recovery in the global economy. In order to create the best possible environment for global economic growth, policymakers in advanced economies have a particular responsibility, and Ministers endorsed the need for further progress in implementing structural reforms in Europe, addressing non-performing loans and ensuring corporate restructuring in Japan, and restoring confidence in corporate governance in the US. At the same time all countries are urged to act to promote faster growth and poverty reduction in developing countries, to resist pressures for protectionism, to reduce trade distorting subsidies (particularly in agriculture), to make early progress in delivering the Doha Development Agenda, and to accord tariff and quota free access to all exports from least developed countries. Ministers also recognised the threat to long-term development posed by HIV/AIDS and called for concerted action to address the effects of the pandemic.
Delivering the Monterrey Consensus
5. Ministers welcomed the agreements reached at the March UN Conference on Financing for Development in Monterrey, and more recently at the Johannesburg World Summit on Sustainable Development, noting their importance for Commonwealth countries. If implemented with determination, the agreements offer a real prospect of meeting the Millennium Development Goals and securing a substantial reduction in global poverty. Ministers adopted a Commonwealth Action Plan for delivering the Monterrey consensus. In this connection, they appreciated Professor Amartya Sen's valuable contribution to their deliberations.
6. Ministers noted that the Commonwealth Action Plan has benefited from a process of consultation and partnership with civil society in Commonwealth countries generally, co-ordinated by the Commonwealth Foundation. Ministers agreed to build on and strengthen this partnership, and establish the process of civil society engagement as a routine element of preparations for future meetings of Finance Ministers.
Securing Sustained Debt Reduction for Poor Countries.
7. For many of the poorest countries in the world, debt relief is an essential first step for successful growth and development. Ministers welcomed the progress made over the last two years in implementing the HIPC initiative, which successive meetings of Commonwealth Finance Ministers helped launch and improve, but noted there is much more to be done to ensure that HIPCs achieve a robust exit from unsustainable debt. The full benefits will only be realised if the improved debt situation is sustained through support to promote the investment and human development necessary to achieve sustained growth and poverty reduction. Ministers therefore welcomed the outcome of the HIPC Ministerial Forum on 24 September 2002 in London, agreed that the ongoing work of the Forum should inform the future development of the HIPC initiative, and made further proposals for enhanced debt relief as an important element of the Commonwealth Action Plan.
Ensuring progress at the IMF-World Bank Annual Meetings.
8. Ministers agreed to promote wider endorsement of the principles and policies set out in the Commonwealth Action Plan, including at the subsequent IMF/World Bank Annual Meetings. In particular, Ministers will support progress in: appropriately enhancing the participation, voice and representation of developing countries in the international financial institutions; further strengthening the link between IMF and World Bank programmes and country-owned development strategies, particular, in response to economic shocks and cyclical downturns; strengthening IMF surveillance and the codes and standards framework, and streamlining conditionality; and securing agreement to a new approach to sovereign debt restructuring. Ministers also welcomed the first report of the new Independent Evaluation Office at the IMF, and urged the IMF to respond positively to its recommendations.
Taking Action to Counter Money Laundering and the Financing of Terrorism.
9. Ministers welcomed the firm action being taken by the international community in countering money laundering and the financing of terrorism, and the support being provided by the Secretariat to Commonwealth countries. In particular they welcomed the assistance provided to developing country members to tackle abuses of the international financial system, to meet international standards and to implement UN Security Council Resolutions 1373 and 1390; and called for further progress in this regard. Ministers welcomed the important contribution of regional anti-money laundering groups; and in particular supported the progress that the Eastern and Southern African Anti-Money Laundering Group has made in developing its work programme, and encouraged the Secretariat to continue to support the work of the Group in establishing a comprehensive regional anti-money laundering strategy.
Promoting Private Investment to the Developing Countries
10. Ministers stressed the importance of securing stronger and more stable flows of private finance to developing countries. They noted the continued operation of funds launched under the Commonwealth Private Investment Initiative, looked forward to successor funds in South Asia and the Pacific, and welcomed the efforts under way to launch the Pan-Commonwealth Africa Partners. Recognising the special difficulties faced by least developed countries and small vulnerable economies in attracting investment, Ministers welcomed Commonwealth efforts to develop new and creative ways to promote private direct investment in the poorest and most vulnerable countries; urged the international financial institutions and donors to explore and collaborate further in these endeavours; and asked the Secretariat to report progress made at the next meeting.
11. Ministers noted and welcomed the work of the Commonwealth Business Council (CBC) to promote trade and private investment flows for development through a range of practical measures. They welcomed the CBC's report to Ministers, and noted its proposals to further develop this role.
Promoting the Economic Development of Small States
12. Ministers recognised the increased urgency of the challenges confronting the small and vulnerable members of the Commonwealth arising from recent international developments and other factors. In that context, whilst welcoming the actions being taken in the Commonwealth, the World Bank and in other international institutions to implement the proposals in the April 2000 report of the Joint Commonwealth/World Bank Task Force on Small States, they accepted that these need to be widened in the current circumstances. They looked forward to a full discussion of progress and new initiatives at the annual small states forum to be held in Washington on 30 September. In this respect Ministers supported the New Agenda for Commonwealth work on small states endorsed in Coolum by the Ministerial Group on Small States, and asked the Secretariat to assist in preparing for the review of the Barbados Programme of Action on Small Island Developing States, to be undertaken in 2004.
Working towards Gender Equality in Economic Policymaking
13. Noting the Secretariat report on the gender responsive budget initiative, Ministers supported continued Secretariat work with Commonwealth countries in this area, stressing the importance of taking the work forward in close partnership with other intergovernmental and development agencies and in collaboration with civil society at the country level. Ministers agreed to make progress within their respective budget setting processes, for review at the Ministerial meeting in 2005.
Enhancing Commonwealth Development Co-operation
14. Ministers recognised the valuable development assistance that continued to be provided by the Commonwealth Fund for Technical Co-operation (CFTC), in support of members' efforts to meet the Millennium Development Goals. As a trusted development partner, the CFTC is well placed to address countries' technical co-operation needs in its area of focus and expertise. Recognising the CFTC's limited financial resources, Ministers expressed support for efforts to focus the CFTC on areas of comparative advantage. They called for the continuous improvement of the quality and sustainability of the work of the CFTC, through a greater focus on results-based management techniques, and expressed their support for the focus of the assistance programme in 2002/03. Ministers welcome further financial commitments to permit the CFTC to fully realise its approved Plan of Expenditure for 2002/03.
15. Ministers noted the Report of the Commonwealth Partnership for Technology Management (CPTM), and its active programme of advisory Country Tasks and International Smart Partnership Dialogues. They acknowledged the financial support from contributing governments and the private sector. Ministers also noted the proposal to establish an endowment fund to ensure the financial sustainability of CPTM.
The Commonwealth Association of Tax Administrators.
16. Noting that 2002 marks the 25th anniversary of their decision to establish the Commonwealth Association of Tax Administrators (CATA), Ministers acknowledged the positive contribution that CATA has already made in building capacity in tax administration in member countries, and looked forward to initiatives that would increase its effectiveness further in future.
The Commonwealth Education Fund
17. Ministers highlighted the importance of meeting the Millennium Development Goals for education. They therefore welcomed the establishment of the Commonwealth Education Fund, to mark Her Majesty's Golden Jubilee, to strengthen the capacity of civil society to participate in the formulation and implementation of national education plans.
2003 Commonwealth Finance Ministers Meeting
18. Ministers accepted Brunei Darussalam's generous offer to host their next meeting. London
Note to editors:
The text of the Commonwealth Action Plan on delivering the Monterrey Consensus can be found Here