We, the Finance Ministers and Central Bank Governors of the G20, held our sixth meeting in Berlin, Germany. Our meeting confirmed the growing sense of common purpose and shared views and responsibility which has developed within the G20 over the last years.
We welcomed the favourable macroeconomic environment in the world economy with high growth at low inflation rates. We expect that the macroeconomic environment will remain favourable in the next year. Many countries are implementing structural reforms to foster sustainable growth and financial stability. However, downside risks have increased due to oil price volatility, persisting external imbalances and geo-political concerns. Co-operation between oil producers and consumers to ensure adequate supply, investment to expand oil production capacity, improvements in oil market transparency, greater energy efficiency and wider use of alternative sources of energy will contribute to improving the resilience and sustainability of the international economy and to more moderate oil prices in the medium term. We also discussed the impact of current macro-economic conditions, in particular oil prices, on many of the poorest countries and the adverse effects on their development prospects. We underscored the importance of medium-term fiscal consolidation in the United States, continued structural reforms to boost growth in Europe and Japan, and, in emerging Asia, steps towards greater exchange rate flexibility, supported by continued financial sector reform, as appropriate.
We reaffirmed our commitments made in Morelia towards the progress of developed and developing countries on implementation of the Monterrey Consensus and the Millennium Development Goals. We welcomed recent work by the World Bank and the IMF on the need and mechanisms for financing for development.
We agreed that our goal of improving welfare and employment in our countries calls for strong and sustained growth worldwide. We therefore had a thorough exchange of views on growth-enhancing strategies. Building on our own experiences as well as on our discussions on institution-building in the financial sector, on regional cooperation and integration and on demographic challenges, we today reached an accord on a number of common principles for domestic policies which would help to foster sustained economic growth if implemented consistently and with due regard to country-specific circumstances. We will translate this G20 Accord into concrete action through measures such as found in the attached G20 Reform Agenda, and we will regularly review the progress towards implementation. We are agreed that such policy reforms need to be supported by a robust and effective international financial and trade architecture that delivers fair access to markets. In this respect, we are committed to a quick resolution and effective implementation of the Doha Round.
Based on an exchange of experience over the past two years, we emphasised that strong domestic financial sectors are essential in supporting economic growth and reducing external vulnerabilities. We agreed that high priority should be given to establishing stable and efficient institutions. Progress in institution building is also important for a well-sequenced liberalisation of the capital account. Emphasis must be given to implementing the relevant internationally recognised standards and codes. We highlighted the crucial role of financial sector supervision, which should pay due regard to efficiency, operational independence and accountability of the agencies involved. We welcomed the efforts of the World Bank to develop principles and guidelines for effective insolvency and creditor rights systems and we commend efforts to develop a unified international standard in this area, in collaboration with UNCITRAL, that takes into account different legal traditions. We identified stable and efficient payment systems as pivotal for the financial infrastructure and emphasised the role of central banks as a supplier and overseer of payment services. We welcomed the efforts of the IMF, the World Bank and others in promoting institution-building and the development of local capacity and agreed on the importance of closely coordinating such activities.
We agreed that regional cooperation and integration can be important steps for national economies in opening up to global trade and financial flows and in achieving gradual improvements in competitiveness. We emphasised that regional arrangements should be designed with due regard to multilateral objectives. While trade has historically been the initial step of regional integration, we highlighted the formation of regional integrated financial markets for bonds and financial services. The reduction of barriers to foreign direct investment in the financial sector within the necessary regulatory framework, can, if appropriately sequenced, enhance the efficiency and stability of national financial systems. We agreed that G20 countries, as systemically important economies, have a special responsibility in their regions. We undertake to play a leading role in advancing regional and global integration.
Against the backdrop of global demographic changes, we assessed trends in our countries and the challenges they present for economic policy. As all our countries will be affected by ageing-related budgetary pressures in the coming decades, we are well aware of the need for fiscal consolidation and further structural reforms. However, policy challenges differ greatly among countries in the short-term. Countries that will encounter ageing problems first need to integrate a larger part of their working-age population into the labour force, expand individual working life and implement life-long learning. Countries that will experience a rise in the working age population before the problematic impact of ageing becomes apparent should increase investment in human-capital and infrastructure while pursuing prudent fiscal policies. We emphasised the importance of a stable and efficient international financial system that allows smooth flows of capital between regions at different demographic stages. We are committed to strengthening the monitoring of economic challenges of an ageing population and surveillance of respective policies and call on the IMF to regularly include, e.g. every four years, in the context of its Article IV consultations a thorough and integrated analysis of these long-term challenges and policy responses. Building on this, the G20 will review demographic, migratory, and other long-term challenges regularly at a global level.
We reaffirmed the importance of an international financial architecture that sets incentives for pursuing sustainable policies and prudent risk-taking. In this regard, we welcomed the results achieved between issuing countries and private-sector participants on Principles for Stable Capital Flows and Fair Debt Restructuring in Emerging Markets. Such principles, which we generally support, provide a good basis for strengthening crisis prevention and enhancing predictability of crisis management now, and as they further develop in future.
We reaffirmed our commitment to fight the abuse of the international financial system in all forms. To this end, we have committed ourselves to the high standards of transparency and exchange of information for tax purposes that have been developed by the OECDs Committee on Fiscal Affairs as set out in the attached statement. We will work to implement the high standards of transparency and effective exchange of information through legal mechanisms such as bilateral information exchange treaties, and we also call on those financial centres and other jurisdictions within and outside the OECD which have not yet adopted these standards to follow our lead and take the necessary steps, in particular in allowing access to bank and entity ownership information.
While we have made progress in fighting money laundering and the financing of terrorism since 11 September 2001, much remains to be done. FATF regional style bodies are expected to be an important element of our efforts and we welcome the recent establishment of the Eurasian Group on Money Laundering and Financing of Terrorism (EAG). We look forward to the early admission of China in the FATF. We are committed to implement the revised FATF Forty Recommendations and the FATF Special Recommendations. We welcomed the decision by the IMF and the World Bank to make comprehensive assessments on money laundering and terrorist financing a regular part of their work. We are agreed on the importance of responding to the challenges posed by illegal cash couriers and by the use of the informal sector for remittances and we supported the FATFs current efforts to address these issues more effectively. In this context we welcomed the new FATF Special Recommendation IX on cash couriers and urge its efficient implementation.
We expressed our appreciation to the German authorities for their excellent stewardship of the G20 this year and for the effective arrangements for this meeting. We will continue our work under the Chinese presidency in 2005 and we welcome the invitation to our next meeting in Beijing. We have also agreed today that the G20 will be chaired by Australia in 2006.