Helping developing countries ride the global wave of the information technology revolution will top the economic agenda at the Friday-Sunday Group of Eight summit in Okinawa.

The G8 state leaders will meanwhile explore ways to expedite debt-relief programs for the poorest countries while assuring the proper use of funds available for poverty reduction.

Reinforced international coordination to crack down on money laundering and other abuses of the global financial system will also be discussed.

The leaders are to praise the overall improvement in the world economy in the past year despite a few concerns, such as unclear prospects for a full-fledged recovery in Japan.

The G8 comprises the Group of Seven economic powers — Britain, Canada, France, Germany, Italy, Japan and the United States — plus Russia.

The Okinawa summit will be the culmination of the separate meetings of G7 finance ministers and G8 foreign ministers earlier this month in Kyushu, where some of the economic and political issues were discussed in depth.

The IT revolution was a main topic at the G7 finance ministers' conference.

While the finance chiefs focused on the IT revolution's macroeconomic impact and effect on financial business and taxation, the state leaders will discuss the "digital divide" between the industrialized and developing worlds.

The concept refers to the potential widening economic gap between countries — or individuals in a country — that have and do not have access to information technology, particularly the Internet.

The finance ministers agreed that the IT revolution can potentially boost world economic growth through increasing productivity.

Recognizing that spreading the IT benefits to the developing world is necessary for global growth and stability, the G8 leaders will confirm the need for international coordination to narrow the digital divide.

They will emphasize the need to help Third World nations form competitive and regulatory policies, develop infrastructure for telecommunications and educate and train local people in IT-related areas.

They will also agree on the need for international rules regarding electronic commerce and protection of consumer benefits and privacy, as agreed by the finance chiefs.

Incorporating these points, the G8 leaders will issue an "IT charter" separately from a joint communique to be adopted at the end of the summit. Each of the G8 members are expected to map out action plans in line with the charter.

For its part, Japan will prepare a $15 billion comprehensive aid package over the next five years to help developing countries set IT infrastructure in place, as Prime Minister Yoshiro Mori announced last Friday.

The package, to complement private-sector efforts, will come in both official development assistance and non-ODA forms, such as credit guarantees for private-sector transactions. Its objectives include training 10,000 engineers and policy planners.

Discussion on debt relief programs for heavily indebted poor countries will be an extension of the finance chiefs' meeting, which followed up on the progress of a G7 agreement at the previous summit in June 1999 in Cologne, Germany.

The G7 leaders agreed at the time that they would waive all ODA loans to the HIPCs. They later decided voluntarily to waive non-ODA loans as well.

Of 40 HIPCs — mostly in Africa — acknowledged by the International Monetary Fund and the World Bank, only eight have passed a set of conditions to be eligible for debt relief under the Cologne initiative. They are Uganda, Bolivia, Mauritania, Mozambique, Tanzania, Honduras, Senegal and Burkina Faso.

Because the G7 aims to apply the programs to three-fourths of all HIPCs by the end of this year, the biggest theme at the Okinawa summit will be how to expedite the application process while ensuring HIPCs clear the conditions. The conditions include drawing up a plan to reduce poverty with funds available through debt forgiveness.

The G7 leaders will probably not launch a new initiative to forgive all HIPC public debts immediately without any conditions attached, as demanded by the London-based international movement Jubilee 2000.

Nor does Japan intend to change its debt-relief grant scheme. Rather than one-time simple cancellation of debt, it reschedules debt over 40 years, and when a country sends in its annual payment to Japan, it makes a grant to the country for the same amount in yen.

That scheme, internationally recognized as a valid means for a 100 percent debt-waiver, is meant to encourage debtor countries to make efforts on their own.

The G8 leaders will also reiterate their commitments to combat international money-laundering.

The finance chiefs earlier agreed to consider taking countermeasures against 15 countries identified by the Paris-based Financial Action Task Force as noncooperative with the international fight against money-laundering.

But discussion at the summit may be limited because Russia was named in the FATF blacklist in June.

The leaders are also expected to discuss tax havens — hotbeds for tax evasion and harmful tax competition — as well as offshore financial centers that lack a sufficient financial supervisory system.

The summit takes place as global economic conditions have generally improved over the past year, with emerging economies mostly recovering from the financial crises in 1997 and 1998. The leaders will review the economic outlook and policies.

The U.S. and European economies continue to expand, and Russia's economy is steadily growing, although structural problems remain, particularly in the banking sector. Japan's weak recovery meanwhile stands out.

Despite some positive indicators — such as a 10 percent annualized growth in the January-March quarter and much-improved business confidence in the recent Bank of Japan "tankan" survey — Japanese consumer spending is still sluggish and unemployment remains high, at 4.6 percent in May.

Finance Minister Kiichi Miyazawa has repeatedly said Tokyo intends to continue its stimulus policy with 500 billion yen in a reserve budget, and to decide on a supplementary budget in early September depending on the gross domestic product data.

The Bank of Japan Policy Board opted Monday not to raise interest rates, considering the negative impact of the recent bankruptcy of the Sogo Co. department store chain on the economy. When the BOJ will lift its 17-month-old "zero-interest-rate" policy has been the topic of intense speculation inside and outside of Japan.

The G8 leaders are also expected to discuss an early launch of a new round of trade liberalization negotiations at the World Trade Organization.

WTO talks targeted

The Group of Eight major powers plan to state in a joint declaration to be issued at their summit this weekend in Okinawa that they will make efforts to get a new round of multilateral trade talks started by the end of this year, trade sources said Tuesday.

Conflicting interests of member countries have prevented the launch of a new round of talks under the World Trade Organization.

And the chances of starting a new round by the end of this year are also slim, particularly because the United States is not likely to consolidate its position on key trade issues until after the presidential election in November, the sources said.

Thus, the declaration to be issued at the Friday-Sunday summit in Nago, Okinawa Prefecture, will be "a target for an attempt," they said.

One view holds that it would undermine the credibility of the G8 meeting if the timetable that is adopted turns out to be unfeasible, the sources said.

But the U.S., which last year chaired a WTO ministerial meeting that failed to launch the new round, and European nations proposed the inclusion of a reference to starting the new talks by the yearend, the sources said.

The G8 comprises Britain, Canada, France, Germany, Italy, Japan, the U.S. and Russia.

A trade ministers' meeting of the Asia-Pacific Economic Cooperation forum and a ministerial meeting of the Organization for Economic Cooperation and Development, both held in June, called for an early start of new WTO talks but did not go as far as presenting a specific timetable for it.