India helps secure G20 deal for developing countries

London: Prime Minister Manmohan Singh left here Friday after helping secure a G20 deal that he said would help inject up to $1.1 trillion into the rapidly-emptying coffers of developing countries struggling to cope with the world's worst economic crisis in 60 years.

"I was happy to note that our views received wide acceptance and support," Manmohan Singh, who led the Indian delegation, said at the close of the summit.

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India pushed hard for developing countries - both large economies, as well as the poorest countries - to make good losses that they have already suffered and to ensure they do not again lose out in a crisis that was not of their making.

"We have agreed in favour of greater resources for the world's developing countries, because developing countries who are not responsible for this crisis are yet major victims of the crisis," the prime minister said.

The summit ended Thursday with world leaders pledging to inject a massive $1.1 trillion into the world economy through international financial institutions such as the International Monetary Fund (IMF), World Bank and the Asian Development Bank (ADB).

The ADB's capital will be increased by about 200 percent.

The money, some of which would go directly as aid to the world's poorest countries and some into funding global trade, would aim to make good a $700 billion decline in capital flows to developing countries.

The bulk of it will go into funding cheap IMF loans to vulnerable economies.

Although India itself does not need to draw out from the IMF, it made the call because emerging economies are expected to power the global economy through the recession.

"Together they involve a massive provision of $ 1.1 trillion for emerging market economies. India does not need IMF funding but we have been in favour of expanding IMF resources as this will help developing countries that need assistance. It will restore confidence about emerging markets," Manmohan Singh declared.

The other important part of the summit was the decision to enforce a much tighter regulation of globalization, but this, Manmohan Singh said, would take time.

India is now a member of the two standard-setting regulatory bodies, the Financial Stability Forum and the Basle Committee on Banking Supervision.

"The directions of the reform of financial regulation and supervision that have been agreed are in line with our own thinking in India," the prime minister said.
Source: IANS