Finance ministers from the Group of Eight leading industrialized nations said
Saturday in a draft communique that global growth is strong, but warned of
dangers posed by high energy prices and economic imbalances.
"Global growth remains strong and is
gradually becoming more broadly based," said the ministers, who met in St.
Petersburg in the run-up to next month's summit of G-8 leaders. "However,
downside risks from high and volatile energy prices and widening global
Minister Alexei Kudrin, right, and World Bank chief Paul Wolfowitz seen at
a joint news conference in St. Petersburg, Russia, Friday June 9, 2006.
Russia on Friday preceded a meeting of the Group of Eight finance
ministers by declaring a plan to write off about US$700 million (553
million euros) in debt owed by the poorest countries, a move reflecting
its oil-propelled wealth and a desire to jockey for an equal position with
the world's top industrialized nations.
The ministers called for promoting greater transparency and reliability in
energy market data through developing a global common standard for reporting oil
Finance ministers had been expected to discuss how the United States is
dealing with its huge trade deficit and what policies other countries are
pursuing to bolster domestic growth as a way of supporting US exports. Without
referring directly to the United States, the draft called the task of addressing
economic imbalances a "shared responsibility."
The US Commerce Department said Friday that the trade deficit rose to $63.4
billion in April after two months of rare declines, pushed higher by surging oil
prices and a flood of imported furniture, televisions and toys from China.
In the face of calls in Europe to diversify energy supplies away from a
strong reliance on Russia currently supplying a quarter of European energy,
Moscow has insisted that predictable markets for its oil and gas are a key part
of energy security. The draft appeared to acknowledge both positions.
"We recognize the importance of the principles of the Energy Charter, of
diversification of energy markets and supply sources and of strengthened
emergency response cooperation in ensuring energy security," the draft said.
Early this year, Moscow cut off gas supplies to Ukraine in a price war,
resulting in a brief disruption to EU nations in the dead of the winter.
Europe has been pushing Russia to ratify the Energy Charter, which provides a
mechanism for crafting predictable market conditions for producers and consumers
alike. However, Russia has resisted EU pressure to ratify the document that
would require it to open its export pipeline network and other energy assets to
The ministers also drafted a separate statement focusing on the need to
support impoverished nations' access to energy supplies.
"We urge national governments and multilateral and bilateral donors to
integrate energy issues into poverty reduction and country assistance
strategies, including options for the least developed countries to tap their
natural resources potential," they said.
The draft statement saluted the role played by emerging economies like
Russia, China and Brazil in funding development projects in the world's poorest
Russian Finance minister Alexei Kudrin on Friday touted a $700 million
(euro553 million) debt write-off that would require debtor countries to use $250
million (euro197 million) of the money to combat infectious diseases, primarily
malaria, and help improve energy infrastructure in African nations.
Among the other points in the draft, ministers reiterated their commitment to
preparing contingency plans against an avian flu pandemic, emphasized the
importance of education programs to enhance financial literacy and reaffirmed
the need to strengthen safeguards against money laundering and terrorism
Russia, which is leading the G-8 for the first time, is keen to flex
financial muscles that have been buffed by billions of dollars in oil money
flowing into its coffers at a time of record world prices. It is the world's
second largest oil exporter after Saudi Arabia.
Separately, a spokesman for the German finance minister told Dow Jones
Newswires that Germany was willing to accept early payment of euro1.3 billion
($1.6 billion) in Russia's Soviet-era debt, but warned that Moscow would have to
pay a premium to retire the remaining euro6.4 billion ($8.1 billion) of its debt
owed to Germany ahead of schedule.
Russia has offered to quickly pay down all of the $22 billion it owes to the
Paris Club of creditor nations, but Germany has resisted Russia's offer of a
full redemption of the debt it is owed, reluctant to lose the future income
stream of relatively high interest payments over the next few