Last year, gathered in Naples, we issued the following challenge to ourselves:

"50 years ago, at Bretton Woods, visionary leaders began to build the institutions that provided our nations with two generations of freedom and prosperity ... As we approach the threshold of the 21st century, we are conscious of our responsibility to renew and revitalize these institutions and to take on the challenge of integrating the newly emerging market democracies across the globe.

"To carry out this responsibility, we have agreed that, in Halifax next year, we will focus on two questions: (1) how can we assure that the global economy of the 21st century will provide sustainable development with good prosperity and well-being of the peoples of our nations and the world? (2) What framework of institutions will be required to meet these challenges in the 21st century? How can we adapt existing institutions and build new institutions to ensure the future security and prosperity of our people?"

We have an obligation to be no less visionary than the leaders of the post-war democracies. Here in Halifax, we have taken decisive action to meet that challenge. We have collectively decided that the first step is to honestly answer those questions. This will require a level of transparency about the hitherto seemingly mysterious operations of the global economy than leaders have previously been willing to place squarely before the peoples of the world.

As leaders of not only large industrialized countries, but as leaders of countries that have prized themselves far longer on their political system than on their economic system, we wish to make the following observations:

As democratically elected leaders of governments, we have less and less power to effect change within our own nations. We are increasingly checked in efforts to meet the legitimate expectations of citizens in some of the greatest democracies in the history of humankind by the actions of others. These "others" set the interest rates that pile billions more on domestic debt loads in the blink of an eye. These "others" determine the creditworthiness of our nations based on quite subjective and self-serving criteria. Threats to our credit status are used to undermine social programs, forcing large industrialized countries into deficit slashing -- imposing real hardship and pain on our domestic populations, rather than risk largely imaginary pain on holders of paper debt.

We recognize that the real power in the world no longer resides in the nation state. We, and leaders before us, have allowed that power to be abdicated. It has been eroding through the imposition of an increasingly harsh economic order. First and foremost, that order serves the needs of transnational corporations. The emerging global marketplace, the free trade agreements impose this model on industrialized countries. The IMF and the World Bank, backed up by commercial banks, impose that order on the rest of the world. International financial institutions, initially created in 1944 to fight poverty and promote global prosperity, have now been perverted in those aims to serving the needs of transnational corporations. Those corporations want easy and cheap access to raw materials, cheap and ready supply of labour, less environmental protection, favourable conditions to attract their investments and no barriers to the distribution of their products. The World Bank and the IMF serve these ends far more than they serve their founding principles.

We are also witnessing a time of unprecedented speculation. It was this speculation that largely led to Mexico's crisis. It was the speculators who were bailed out by monies found to help the Mexican economy. It was decisively not the people of Mexico who are currently undergoing severe pain as a result of the economic model imposed on them by the collective wisdom of global economic institutions. The model failed. The people of Mexico did not. The people of Mexico ought not to be punished. It is the model that requires fundamental re-assessment.

In Halifax, we have decided to be begin the task of re-assessing that model. We recognize that time is running out for democratically elected leaders of wealthy nations. We are not merely technocrats, obliged to make an economic order work to the detriment of our citizens. We are entrusted by our citizens to take care of the country's affairs in a way that serves the needs of the many. We have increasingly been serving the needs of the few -- the 345 billionaires on this planet who collectively have as much wealth as the 45% of the world's population.

We have an opportunity here in Halifax -- indeed we have an obligation here in Halifax -- to set in motion the change in course that will take us into the next millennium. We do so based on a series of important and often cited principles that bear repeating: Governments exist to serve the interests of the people. Human needs come first. None of us is wealthy when millions, indeed billions, live in states of absolute poverty. Our future is in our children. The loving care of the world's babies should be our first concern. We, and our economies, do not exist outside the natural world. We are part of the natural world. We depend on the planet's living systems for every breath we breathe, every drop of clean water we drink, every mouthful of nourishing food. Destroying our planet's living systems is not good business.

In this spirit, as democratically elected leaders of seven great democracies, we commit ourselves to the following:

• The re-invigoration of democracy. If the economic order dictates that we abandon commitments of principle made to our citizens, we will honestly explain that we were forced into such choices by an increasingly harsh economic model. The erosion of democracy functions best in the dark.
• We will undertake, with the assistance of the OECD and the re- instated U.N. Centre for the Study of Transnational Corporations, a study on the role of the transnational corporation in the current economic order. We will collectively find a way to regulate the excesses of such corporations, without preventing their ability to do profitable and sustainable business around the world. In hearing this news, CEO's need not tremble. Think of it only as the global equivalent of actions within industrialized countries in the last century to prevent child labour, to regulate safe working conditions, and stop the use of the environment as a giant sink for their wastes. There will be a level playing field. They can still be profitable.

Our actions now, in fact, will protect long-term survival of corporations and their profits. Somehow the new economic order has forgotten that the economy exists to serve people, not the other way around. A "jobless" recovery is no recovery at all. While corporations may still find consumers for their goods for awhile, the current trend of seeing people as irrelevant to global economic activity will ultimately wipe out the buying power of consumers everywhere.

• Fundamentally re-organize the Bretton Woods Institutions. The charters of both organizations should be re-drafted to make sustainability one of their overriding goals, as recommended by our Environment Ministers at their Summit last month in Hamilton. The roles of the Bretton Woods Institutions must be discrete, clear, and more focused:

The World Bank does not need 6,000 people at a headquarters in Washington, each earning the equivalent of $170,000 (Canadian)/year tax free, in order to alleviate poverty. It needs to be decentralized to better serve the needs of the poor and meet its original mandate. It needs to be a retailer, not a wholesaler, of funds. It governance must become more democratic; its actions more transparent; its decision-making more accountable.

The International Monetary Fund has been largely without a raison d'etre since the decision to allow currency rates to float. The IMF has taken on the role of policeman over the world's debt. In meeting that task it has used increasingly heavy-handed economic reforms that actually fail even under a purely economic set of indicators, leaving aside the social and environmental devastation left in their wake. The IMF should not be involved in development lending and should extract itself from surveillance functions. The OECD should conduct surveillance on industrialized countries' performance. Other regional centres should track developing country performance.

• The debt crisis in both developing and industrialized countries must be resolved as an urgent priority. We commit ourselves to the establishment of an independent international tribunal with authority to find solutions, tailor made to each debtor nations' circumstances. Where debts were incurred by corrupt regimes, with no benefit to the peoples of a nation, such circumstances should be taken into account by the tribunal and the debt treated as odious and fraudulent. Where debt is increased through interest rate fluctuations, a firm lower interest rate must be fixed to allow governments to budget with certainty.

Only the international tribunal will have the ability to dictate terms in what are now called "structural adjustment programmes". Such terms for economic reforms as part of debt restructuring packages will be freely negotiated. The tribunal will be guided by principles that ensure that grievous human suffering and irreparable environmental damage is not the price paid for economic reform.

The charters of the Bretton Woods institutions must be re-vised so that the multilateral debt held by international financial institutions will be open to arrangements to allow the forgiveness of all or part of such debt.

• We commit ourselves to curbing the rampant, economically unproductive activity of currency speculators. It is nearly incomprehensible that one trillion dollars a day changes hands in currency transactions. We will "cool down the hot money". We cannot immediately implement a tax on international currency transactions, but, recognizing that such speculation is in the interests of only the very, very few, and pose a threat to international monetary stability, we will work toward the creation and implementation of such a tax before the year 2000.
• We will ensure that newly emerging economies are not crippled by the imposition of harsh economic medicine. In those nations as well, it is critical that human needs are met as an immediate priority. It is empty bellies that fuel ancient tribal and nationalistic rivalries. Global peace and security depends on eradicating poverty everywhere.

We do this in the name of all life on this planet.