Finance ministers from the world's leading industrialized powers grappled with runaway crude oil prices and a global food crisis that they fear could threaten economic growth worldwide. However, despite the ambivalance, the finance ministers of the G-8 countries met on Saturday here in preparation for the Summit of the G-8 heads of state and government in Hokkaido-Toyako. The finance ministers said for a long time the world economy enjoyed a combination of robust growth and low inflation, but it now faces headwinds. “We will work to ensure that the conditions are in place for continued strong world economic growth. We remain positive about the long-term resilience of our economies and emerging market economies are still growing strongly. However, the world economy continues to face uncertainty and downside risks persist.” Further declines in housing prices in the United States and greater strains in the financial markets may adversely affect the global outlook. Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and may increase global inflationary pressure. “These conditions make our policy choices more complicated. We will remain vigilant, and will continue to take appropriate actions, individually and collectively, in order to secure stability and growth in our economies and globally.” The draft communiqué further said the financial market conditions have improved somewhat in the past few months. Bold measures by major central banks have supported the better functioning of markets. Disclosure of losses and capital enhancements by many financial institutions have also helped improve market sentiment. However, strains remain, especially in money and credit markets. The recent financial turmoil has revealed the risks posed to the financial system by excessive risk taking and leveraging. Financial innovation has contributed significantly to the global growth and development, but in the light of risks to financial stability, it is imperative that transparency and risk awareness be enhanced. “We are fully committed to completing our strategy launched last October for strengthening the resilience of the financial system including implementing recommendations made by the FSF.” The draft moreover said the group affirmed “our commitment to an open investment policy and acknowledge that international investment is fundamental to global prosperity. We will resist protectionist sentiment at home and abroad. We welcome the work of the OECD to establish best practices for open investment regimes. We recognize the benefits of commercially driven investment from government
