[Public Papers of the Presidents of the United States: George H. W. Bush (1992, Book I)]
[July 7, 1992]
[Pages 1088-1094]
[From the U.S. Government Publishing Office www.gpo.gov]



Munich Economic Summit Declaration

July 7, 1992
    1. We, the Heads of State and Government of seven major industrial 
nations and the President of the Commission of the European Community, 
have met in Munich

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for our eighteenth annual Summit.
    2. The international community is at the threshold of a new era, 
freed from the burden of the East-West conflict. Rarely have conditions 
been so favourable for shaping a permanent peace, guaranteeing respect 
for human rights, carrying through the principles of democracy, ensuring 
free markets, overcoming poverty and safeguarding the environment.
    3. We are resolved, by taking action in a spirit of partnership, to 
seize the unique opportunities now available. While fundamental change 
entails risk, we place our trust in the creativity, effort and 
dedication of people as the true sources of economic and social 
progress. The global dimension of the challenges and the mutual 
dependencies call for world-wide cooperation. The close coordination of 
our policies as part of this cooperation is now more important than 
ever.

World economy

    4. Strong world economic growth is the prerequisite for solving a 
variety of challenges we face in the post-Cold War world. Increasingly, 
there are signs of global economic recovery. But we will not take it for 
granted and will act together to assure the recovery gathers strength 
and growth picks up.
    5. Too many people are out of work. The potential strength of 
people, factories and resources is not being fully employed. We are 
particularly concerned about the hardship unemployment creates.
    6. Each of us faces somewhat different economic situations. But we 
all would gain greatly from stronger, sustainable non-inflationary 
growth.
    7. Higher growth will help other countries, too. Growth generates 
trade. More trade will give a boost to developing nations and to the new 
democracies seeking to transform command economies into productive 
participants within the global marketplace. Their economic success is in 
our common interest.
    8. A successful Uruguay Round will be a significant contribution to 
the future of the world economy. An early conclusion of the negotiations 
will reinforce our economies, promote the process of reform in Eastern 
Europe and give new opportunities for the well-being of other nations, 
including in particular the developing countries.
    We regret the slow pace of the negotiations since we met in London 
last year. But there has been progress in recent months. Therefore we 
are convinced that a balanced agreement is within reach.
    We welcome the reform of the European Community's Common 
Agricultural Policy which has just been adopted and which should 
facilitate the settlement of outstanding issues.
    Progress has been made on the issue of internal support in a way 
which is consistent with the reform of the Common Agricultural Policy, 
on dealing with the volume of subsidized exports and on avoiding future 
disputes. These topics require further work. In addition, parties still 
have concerns in the areas of market access and trade in cereal 
substitutes that they seek to address.
    We reaffirm that the negotiations should lead to a globally balanced 
result. An accord must create more open markets for goods and services 
and will require comparable efforts from all negotiating partners.
    On this basis we expect that an agreement can be reached before the 
end of 1992.
    9. We are committed, through coordinated and individual actions, to 
build confidence for investors, savers, and consumers: confidence that 
hard work will lead to a better quality of life; confidence that 
investments will be profitable; confidence that savings will be rewarded 
and that price stability will not be put at risk.
    10. We pledge to adopt policies aimed at creating jobs and growth. 
We will seek to take the appropriate steps, recognizing our individual 
circumstances, to establish sound macroeconomic policies to spur 
stronger sustainable growth. With this in mind we have agreed on the 
following guidelines:
    --to continue to pursue sound monetary and financial policies to 
        support the upturn without rekindling inflation;
    --to create the scope for lower interest rates through the reduction 
        of excessive public deficits and the promotion of savings;
    --to curb excessive public deficits above

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        all by limiting public spending. Taxpayers' money should be used 
        more economically and more effectively.
    --to integrate more closely our environmental and growth objectives, 
        by encouraging market incentives and technological innovation to 
        promote environmentally sound consumption and production.
    As the risk of inflation recedes as a result of our policies, it 
will be increasingly possible for interest rates to come down. This will 
help promote new investment and therefore stronger growth and more jobs.
    11. But good macroeconomic policies are not enough. All our 
economies are burdened by structural rigidities that constrain our 
potential growth rates. We need to encourage competition. We need to 
create a more hospitable environment for private initiative. We need to 
cut back excess regulation, which suppresses innovation, enterprise and 
creativity. We will strengthen employment opportunities through better 
training, education, and enhanced mobility. We will strengthen the basis 
for long-term growth through improvements in infrastructure and greater 
attention to research and development. We are urging these kinds of 
reforms for new democracies in the transition to market economies. We 
cannot demand less of ourselves.
    12. The coordination of economic and financial policies is a central 
element in our common strategy for sustained, non-inflationary growth. 
We request our Finance Ministers to strengthen their cooperation on the 
basis of our agreed guidelines and to intensify their work to reduce 
obstacles to growth and therefore foster employment. We ask them to 
report to our meeting in Japan in 1993.

United Nations Conference on Environment and Development (UNCED)

    13. The Earth Summit has been a landmark in heightening the 
consciousness of the global environmental challenges, and in giving new 
impetus to the process of creating a worldwide partnership on 
development and the environment. Rapid and concrete action is required 
to follow through on our commitments on climate change, to protect 
forests and oceans, to preserve marine resources, and to maintain 
biodiversity. We therefore urge all countries, developed and developing, 
to direct their policies and resources towards sustainable development 
which safeguards the interest of both present and future generations.
    14. To carry forward the momentum of the Rio Conference, we urge 
other countries to join us:
    --in seeking to ratify the Climate Change Convention by the end of 
        1993,
    --in drawing up and publishing national action plans, as foreseen at 
        UNCED, by the end of 1993,
    --in working to protect species and the habitats on which they 
        depend,
    --in giving additional financial and technical support to developing 
        countries for sustainable development through official 
        development assistance (ODA), in particular by replenishment of 
        IDA, and for actions of global benefit through the Global 
        Environment Facility (GEF) with a view to its being established 
        as a permanent funding mechanism,
    --in establishing at the 1992 UN General Assembly the Sustainable 
        Development Commission which will have a vital role to play in 
        monitoring the implementation of Agenda 21,
    --in establishing an international review process for the forest 
        principles, in an early dialogue, on the basis of the 
        implementation of these principles, on possible appropriate 
        internationally agreed arrangements, and in increased 
        international assistance,
    --in further improving monitoring of the global environment, 
        including through better utilisation of data from satellite and 
        other earth observation programmes,
    --in the promotion of the development and diffusion of energy and 
        environment technologies, including proposals for innovative 
        technology programmes,
    --by ensuring the international conference on straddling fish stocks 
        and highly migratory fish stocks in the oceans is convened as 
        soon as possible.

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Developing countries

    15. We welcome the economic and political progress which many 
developing countries have made, particularly in East and South-East 
Asia, but also in Latin America and in some parts of Africa. However, 
many countries throughout the world are still struggling against 
poverty. Sub-Sahara Africa, above all, gives cause for concern.
    16. We are committed to dialogue and partnership founded on shared 
responsibility and a growing consensus on fundamental political and 
economic principles. Global challenges such as population growth and the 
environment can only be met through cooperative efforts by all 
countries. Reforming the economic and social sector of the UN system 
will be an important step to this end.
    17. We welcome the growing acceptance of the principles of good 
governance. Economic and social progress can only be assured if 
countries mobilise their own potential, all segments of the population 
are involved and human rights are respected. Regional cooperation among 
developing countries enhances development and can contribute to 
stability, peaceful relations and reduced arms spending.
    18. The industrial countries bear a special responsibility for a 
sound global economy. We shall pay regard to the effects of our policies 
on the developing countries. We will continue our best efforts to 
increase the quantity and quality of official development assistance in 
accordance with our commitments. We shall direct official development 
assistance more towards the poorest countries. Poverty, population 
policy, education, health, the role of women and the well-being of 
children merit special attention. We shall support in particular those 
countries that undertake credible efforts to help themselves. The more 
prosperous developing countries are invited to contribute to 
international assistance.
    19. We underline the importance for developing countries of trade, 
foreign direct investment and an active private sector. Poor developing 
countries should be offered technical assistance to establish a more 
diversified export base especially in manufactured goods.
    20. Negotiations on a substantial replenishment of IDA funds should 
be concluded before the end of 1992. The IMF should continue to provide 
concessional financing to support the reform programmes for the poorest 
countries. We call for an early decision by the IMF on the extension for 
one year of the Enhanced Structural Adjustment Facility and for the full 
examination of options for the subsequent period, including a renewal of 
the facility.
    21. We are deeply concerned about the unprecedented drought in 
southern Africa. Two thirds of the Drought Appeal target has been met. 
But much remains to be done. We call on all countries to assist.
    22. We welcome the progress achieved by many developing countries in 
overcoming the debt problems and regaining their creditworthiness. 
Initiatives of previous Summits have contributed to this. Nevertheless, 
many developing countries are still in a difficult situation.
    23. We confirm the validity of the international debt strategy. We 
welcome the enhanced debt relief extended to the poorest countries by 
the Paris Club. We note that the Paris Club has agreed to consider the 
stock of debt approach, under certain conditions, after a period of 
three or four years, for the poorest countries that are prepared to 
adjust, and we encourage it to recognise the special situation of some 
highly indebted lower-middle-income countries on a case by case basis. 
We attach great importance to the enhanced use of voluntary debt 
conversions, including debt conversions for environmental protection.

Central and eastern Europe

    24. We welcome the progress of the democracies in central and 
eastern Europe including the Baltic states (CEECs) towards political and 
economic reform and integration into the world economy. The reform must 
be pursued vigorously. Great efforts and even sacrifices are still 
required from their people. They have our continuing support.
    25. We welcome the substantial multilateral and bilateral assistance 
in support of reform in the CEECs. Financing provided by the EBRD is 
playing a useful role. Since

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1989, total assistance and commitments, in the form of grants, loans and 
credit guarantees by the Group of 24 and the international financial 
institutions, amounts to $52 billion. We call upon the Group of 24 to 
continue its coordination activity and to adapt it to the requirements 
of each reforming country. We reaffirm our readiness to make fair 
contributions.
    26. We support the idea of working with Poland to reallocate, on the 
basis of existing arrangements, funds from the currency stabilization 
fund, upon agreement on an IMF programme, towards new uses in support of 
Poland's market reform effort, in particular by strengthening the 
competitiveness of Poland's business enterprises.
    27. The industrial countries have granted substantial trade 
concessions to the CEECs in order to ensure that their reform efforts 
will succeed. But all countries should open their markets further. The 
agreements of the EC and EFTA countries aiming at the establishment of 
free trade areas with these countries are a significant contribution. We 
shall continue to offer the CEECs technical assistance in enhancing 
their export capacity.
    28. We urge all CEECs to develop their economic relations with each 
other, with the new independent States of the former Soviet Union as 
well as more widely on a market-oriented basis and consistent with GATT 
principles. As a step in this direction we welcome the special 
cooperation among the CSFR, Poland and Hungary, and hope that free trade 
among them will soon be possible.
    29. Investment from abroad should be welcomed. It is important for 
the development of the full economic potential of the CEECs. We urge the 
CEECs to focus their policies on the creation of attractive and reliable 
investment conditions for private capital. We are providing our 
bilateral credit insurance and guarantee instruments to promote foreign 
investment when these conditions, including servicing of debt, are met. 
We call upon enterprises in the industrial countries to avail themselves 
of investment opportunities in the CEECs.

New independent States of the former Soviet Union

    30. The far-reaching changes in the former Soviet Union offer an 
historic opportunity to make the world a better place: more secure, more 
democratic and more prosperous. Under President Yeltsin's leadership the 
Russian government has embarked on a difficult reform process. We look 
forward to our meeting with him to discuss our cooperation in support of 
these reforms. We are prepared to work with the leaders of all new 
States pursuing reforms. The success is in the interest of the 
international community.
    31. We are aware that the transition will involve painful 
adjustments. We offer the new States our help for their self-help. Our 
cooperation will be comprehensive and will be tailored to their reform 
progress and internationally responsible behaviour, including further 
reductions in military spending and fulfilment of obligations already 
undertaken.
    32. We encourage the new States to adopt sound economic policies, 
above all by bringing down budget deficits and inflation. Working with 
the IMF can bring experience to this task and lend credibility to the 
efforts being made. Macroeconomic stabilisation should not be delayed. 
It will only succeed if at the same time the building blocks of a market 
economy are also put into place, through privatisation, land reform, 
measures to promote investment and competition and appropriate social 
safeguards for the population.
    33. Creditworthiness and the establishment of a dependable legal 
framework are essential if private investors are to be attracted. The 
creditworthiness of the new States will in particular be assessed by the 
way in which they discharge the financial obligations.
    34. Private capital and entrepreneurial commitment must play a 
decisive and increasing part in economic reconstruction. We urge the new 
States to develop an efficient private business sector, in particular 
the body of small and medium-sized private companies which is 
indispensable for a market economy.
    35. Rapid progress is particularly urgent

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and attainable in two sectors: agriculture and energy. These sectors are 
of decisive importance in improving the supply situation and increasing 
foreign exchange revenue. Trade and industry in our countries are 
prepared to cooperate. Valuable time has already been lost because 
barriers to investment remain in place. For energy, we note the 
importance of the European Energy Charter for encouraging production and 
ensuring the security of supply. We urge rapid conclusion of the 
preparatory work.
    36. All Summit participants have shown solidarity in a critical 
situation by providing extensive food aid, credits and medical 
assistance. They also have committed technical assistance. A broad 
inflow of know-how and experience to the new States is needed to help 
them realise their own potential. Both private and public sectors can 
contribute to this. What is needed most of all is concrete advice on the 
spot and practical assistance. The emphasis should be on projects 
selected for their value as a model or their strategic importance for 
the reform process. Partnerships and management assistance at corporate 
level can be particularly effective.
    37. We stress the need for the further opening of international 
markets to products from the new States. Most-favoured-nation treatment 
should be applied to trade with the new States and consideration given 
to further preferential access. The new States should not impede 
reconstruction by setting up barriers to trade between themselves. It is 
in their own interest to cooperate on economic and monetary policy.
    38. We want to help the new States to preserve their highly-
developed scientific and technological skills and to make use of them in 
building up their economies. We call upon industry and science in the 
industrial countries to promote cooperation and exchange with the new 
States. By establishing International Science and Technology Centres we 
are helping to redirect the expertise of scientists and engineers who 
have sensitive knowledge in the manufacture of weapons of mass 
destruction towards peaceful purposes. We will continue our efforts to 
enable highly-qualified civil scientists to remain in the new States and 
to promote research cooperation with western industrial countries.
    39. We welcome the membership of the new States in the international 
financial institutions. This will allow them to work out economic reform 
programmes in collaboration with these institutions and on this basis to 
make use of their substantial financial resources. Disbursements of 
these funds should be linked to progress in implementing reforms.
    40. We support the phased strategy of cooperation between the 
Russian Government and the IMF. This will allow the IMF to disburse a 
first credit tranche in support of the most urgent stabilisation 
measures within the next few weeks while continuing to negotiate a 
comprehensive reform programme with Russia. This will pave the way for 
the full utilisation of the $ 24 bn support package announced in April. 
Out of this, $ 6 bn earmarked for a rouble stabilisation fund will be 
released when the necessary macroeconomic conditions are in place.
    41. We suggest that country consultative groups should be set up for 
the new States, when appropriate, in order to foster close cooperation 
among the States concerned, international institutions and partners. The 
task of these groups would be to encourage structural reforms and to 
coordinate technical assistance.

Safety of nuclear power plants in the new independent States of the 
former Soviet Union and in central and eastern Europe

    42. While we recognise the important role nuclear power plays in 
global energy supplies, the safety of Soviet-design nuclear power plants 
gives cause for great concern. Each State, through its safety 
authorities and plant operators, is itself responsible for the safety of 
its nuclear power plants. The new States concerned of the former Soviet 
Union and the countries of central and eastern Europe must give high 
priority to eliminating this danger. These efforts should be part of a 
market-oriented reform of energy policies encouraging commercial 
financing for the development of the energy sector.
    43. A special effort should be made to improve the safety of these 
plants. We offer

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the States concerned our support within the framework of a multilateral 
programme of action. We look to them to cooperate fully. We call upon 
other interested States to contribute as well.
    44. The programme of action should comprise immediate measures in 
the following areas:
    --operational safety improvements;
    --near-term technical improvements to plants based on safety 
        assessments;
    --enhancing regulatory regimes.
    Such measures can achieve early and significant safety gains.
    45. In addition, the programme of action is to create the basis for 
longer-term safety improvements by the examination of
    --the scope for replacing less safe plants by the development of 
        alternative energy sources and the more efficient use of energy,
    --the potential for upgrading plants of more recent design.
    Complementary to this, we will pursue the early completion of a 
convention on nuclear safety.
    46. The programme of action should develop clear priorities, provide 
coherence to the measures and ensure their earliest implementation. To 
implement the immediate measures, the existing G 24 coordination mandate 
on nuclear safety should be extended to the new States concerned of the 
former Soviet Union and at the same time made more effective. We all are 
prepared to strengthen our bilateral assistance.
    In addition, we support the setting up of a supplementary 
multilateral mechanism, as appropriate, to address immediate operational 
safety and technical safety improvement measures not covered by 
bilateral programmes. We invite the international community to 
contribute to the funding. The fund would take account of bilateral 
funding, be administered by a steering body of donors on the basis of 
consensus, and be coordinated with and assisted by the G 24 and the 
EBRD.
    47. Decisions on upgrading nuclear power plants of more recent 
design will require prior clarification of issues concerning plant 
safety, energy policy, alternative energy sources and financing. To 
establish a suitable basis on which such decisions can be made, we 
consider the following measures necessary:
    --The necessary safety studies should be presented without delay.
    --Together with the competent international organisations, in 
        particular the IEA, the World Bank should prepare the required 
        energy studies including replacement sources of energy and the 
        cost implications. Based on these studies the World Bank and the 
        EBRD should report as expeditiously as possible on potential 
        financing requirements.
    48. We shall review the progress made in this action programme at 
our meeting in 1993.
    49. We take note of the representations that we received from 
various Heads of State or Government and organisations, and we will 
study them with interest.

Next meeting

    50. We welcome and have accepted Prime Minister Miyazawa's 
invitation to Tokyo in July 1993.

                    Note: This declaration was made available by the 
                        Office of the Press Secretary but was not issued 
                        as a White House press release.