FROM THE OFFICE OF PUBLIC AFFAIRS

This weekend, I will be meeting with my fellow Finance Ministers in the G-7, as well as the G-10 and the InterimCommittee and Development Committee. As many of you know,President Clinton is hosting the Annual G-7 Summit in Denver inJune. The meetings this weekend will provide an opportunity tomove forward on many of the items that will be discussed inDenver. Today, I’d like to give a brief overview of ouragenda for the meetings this weekend.

To begin, we will review, as always, the overallstate of the world economy and the challenges we face inpromoting global growth.

The U.S. economy continues to perform verystrongly, and there is solid growth in many emerging marketeconomies as well. An important focus for our meeting will beJapan’s challenge of maintaining a strong domesticdemand-led recovery and avoiding a significant increase in itsexternal surplus. We will also discuss prospects for Europeangrowth and the challenges they face strengthening growth, placingfiscal deficits on a sustainable path, and implementingstructural reforms to reduce unemployment.

I expect we'll discuss exchange markets, as wealways do, but I have nothing to add to my recent statements.

A primary focus of the G-7 over the last severalyears has been to address ways to foster growth in the developingworld, reform in the international financial institutions and topromote international financial stability. This is critical tothe United States because developing countries are becomingincreasingly important to our economic well-being: they accountfor 42% of U.S. exports and those exports are increasing at twicethe rate of exports to developed countries. Promoting reform andgreater economic, social and political stability by the G-7 totransform more developing countries into dynamic emerging marketsis clearly in the interest of the United

States. This weekend at the G-7, we will addressthree critical issues to advance these efforts.

First, as part of a broad set of initiatives toreduce risk in financial markets, we are moving toward consensuson a strategy to strengthen emerging market financial systems.This strategy includes agreement on a set of core guidelines andprinciples as well as specific recommendations to theinternational financial institutions and to internationalregulatory organizations to help countries implement thoseprinciples. This is critically important to reduce the risks offuture financial crises, which in turn promotes investorconfidence and fosters growth in emerging markets.

Second, the Administration thinks it is time fora broad international initiative to discuss the corrosive effectswhich corruption has on sustainable economic development, growthand stability. The Administration would like to see progress inthe following areas: We urge the OECD countries to act quickly toeliminate the tax deductibility of bribes of foreign officialsand to criminalize such bribery. We also urge the IMF and theMultilateral Development Banks to expand the scope of theiractivities in the anti-corruption area, including measures toensure rule of law, improve the efficiency and accountability ofthe public sector, and promote good governance; and we urge theMultilateral Development Banks to collaborate to establishuniform procurement rules harmonized to the highest standard,require the use of standard documents, and have strongheadquarters oversight of the procurement process.

Finally, as you know, the Administration isworking closely with the Congress on an Africa initiative topromote growth in sub-Saharan Africa. The Administration believesit is in the interest of all nations to foster growth in Africaand integrate that continent more fully into the global economy.The thrust of our thinking is that we in the United States andAfrica’s other main trading partners should focus on tradeand investment, while U.S. support should respond to thosecountries doing most to help themselves. We will discuss with ourG-7 partners about ways the G-7 can assist in this effort. Inthis regard, on behalf of the G-7, I have asked Messrs.Wolfensohn and Camdessus to discuss their thoughts on howAfrica’s boldest reformers can be supported though enhancedfinancing and technical assistance.

As part of our efforts in Africa, this weekend wewill press to move forward on the issue of eligibility for theInitiative for Heavily Indebted Poor Countries to relieve debtfor those countries that are now burdened by unsustainable levelsof debt. For countries that are committed to economic reform, itis important to relieve this debt, especially because that thenfrees up resources to invest in people.

We live in a time of true global interdependence,and millions of American workers and families depend on a healthyglobal economy for their well-being. G-7 meetings advanceAmerica’s economic interests in two critical ways: byencouraging growth and development in the world economy, not justin the G-7, but also in the developing and transition economies;and by strengthening the international financial architecture todeal with new risks in financial markets and the world economyand to promote financial stability. By meeting these objectives,we strengthen our own economy now, and will foster prosperity inthis country in the future. I’d be happy to answer questionsnow.