Statementby H.E. Masajuro Shiokawa |
| I The World Economic Outlook The World Economy While we expect the world economy to remain on the path to recovery with thesupport of appropriate economic management in many countries, the pace ofrecovery so far is modest. Of particular concern is the possible impact on theworld economy of the uncertainties associated with the war in Iraq. We thereforeneed to remain vigilant against adverse developments and to take appropriatemeasures in response to changing economic circumstances with a view topreventing turmoil in the global economic and financial systems. Recently, some emerging market economies such as Argentina and Turkey havebeen hit by economic crises. We commend the progress that has been made towardthe resolution of these crises through the countries' own efforts and with thehelp of the IMF and other international financial institutions. However, marketconfidence in these countries has not yet been fully restored. We hope thatthese countries will make further efforts at economic reform, with a view torestoring market confidence promptly and resolving underlying structuralproblems, thereby achieving sustainable economic growth. The Japanese Economy There are signs of recovery in the Japanese economy, such as an improvementin business activities owing to an increase in corporate profits, even thoughuncertainties related to the developments in Iraq, among others, remain.
While closely watching the economic and financial situation both at home andabroad, the Government and the Bank of Japan are making efforts in an integratedmanner to secure the stability of the financial and capital markets and toovercome deflation, both of which are indispensable for the revitalization ofthe Japanese economy. Through these measures, we are determined to achievedomestic-demand-led sustainable growth. |
| II Strengthening theInternational Financial System There have been a number of financial crises over the past few years,including the Asian crisis in the late 1990s and, more recently, the economiccrises in Argentina and Turkey. We therefore need to further strengthen measuresfor crisis prevention and resolution. Crisis Prevention On crisis prevention, the main issues we need to address are (i)strengthening the IMF's surveillance function including advice on appropriateexchange rate regime and debt sustainability analysis; (ii) effective synthesisof the Financial Sector Assessment Program (FSAP) into the IMF's macroeconomicsurveillance; and (iii) the establishment of international standards and codesand enhanced effectiveness of observance assessments, while taking into accountthe differing stages of economic development of each country. Although theContingent Credit Line (CCL), a facility for crisis prevention, is due to expireat the end of November 2003, effective measures to promote sound policies and toprevent contagion continue to be needed. I look forward to the IMF's study ofsuch measures and its proposals.
For crisis resolution, it is essential to promptly restore the debtsustainability of a country in crisis through an appropriate combination ofpolicy adjustment, official lending from the IMF and other internationalfinancial institutions, and private sector involvement (PSI), including debtrestructuring as necessary. With regard to IMF lending, I welcome the progress that has been made instrengthening the criteria and procedures for exceptional access to IMFresources, including a more rigorous analysis of debt sustainability, in orderto restrict such access to truly exceptional cases. I also welcome thediscussion on establishing a strong presumption that exceptional access incapital account crises should be provided under the Supplemental ReserveFacility (SRF). I highly commend the IMF's study on the Sovereign Debt RestructuringMechanism (SDRM) and its report on a concrete proposal to this Committee.Significant progress has also been made toward the introduction of collectiveaction clauses (CACs) in sovereign bond contracts. In this regard, I welcome theMexican governments' decision to introduce CACs in its sovereign bond issuesin the New York market. I hope that other countries will follow suit in theirsovereign bond issues under foreign jurisdiction. I hope that further study willbe made on such issues as aggregation in the context of achieving a more orderlyprocess of sovereign debt restructuring. As for a Code of Good Conduct forcrisis resolution, I hope that the discussion will proceed with theparticipation of all interested parties including debtor countries, the privatesector, creditor countries, and international financial institutions. For effective crisis resolution, it is essential that the IMF maintain asufficient level of financial resources. I would therefore like to reiteratethat discussion on a quota increase should resume soon under the currentThirteenth General Review of Quotas. The distribution of quotas should reflectthe current situation of the world economy, and we should pay due regard to thisin the review of quotas. |
| III Measuresagainst the Financing of Terrorism The threat of terrorism remains serious. It is therefore important for theinternational community to strengthen measures to combat the financing ofterrorism. I welcome the substantial progress of the assessments of membercountries' compliance with AML/CFT (anti-money laundering and combating thefinancing of terrorism) standard using the comprehensive methodology in thecontext of a 12-month pilot program by the IMF and the World Bank. Based on the results of assessments, it is also important to providetechnical assistance, including by sending experts, in order to strengthen theimplementation of member countries' AML/CFT measures. Japan will continue toactively contribute to such activities.
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