India ensures say for emerging economies in global financial affairs

Monday, 28 September 2009, 06:34 Hrs
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Pittsburgh: Prime Minister Manmohan Singh concluded his engagements at the G20 Summit here with a clear victory for India and other emerging economies in getting a greater say in the affairs of the global financial system and its regulation.

The prime minister also managed to convince the developed world that the time was not ripe to withdraw the stimulus packages aimed at helping countries - especially the developing and poor economies - overcome the worst economic crisis in eight decades.

"With the rise of Asia, with growth of India, China and Brazil, the economic decision-making has to take into account the views of these countries if it is to have an optimum impact," Manmohan Singh said at a post-summit news conference here Friday night.

"We have agreed that the G20 will henceforth be the premier forum for international economic issues. This is an important development broadening the global governance structure.

"Interdependence in a globalised world means that no country, however powerful it may be, can take on the entire burden of economic adjustment and economic decision-making."

In the case of fiscal stimulus, the leaders' statement reflected what Manmohan Singh had been articulating ahead of the G20 Summit.

"We pledge today to sustain our strong policy response until a durable recovery is secured. We will act to ensure that when growth returns jobs do too. We will avoid any premature withdrawal of stimulus," their statement said.

The prime minister also said that India, which has pledged $10 billion for the capital of International Monetary Fund (IMF), will also get greater voting rights in the Bretton Woods institution, along with other developing countries.

"The distribution of quotas should reflect the relative weights of its members in the world economy," the leaders' statement said, even though it fell marginally short of India's expectations.

"It is a compromise figure. Our demand was for seven percent, and we got five percent," the prime minister said, adding: "We now have to address the issue of the Fund Quota increase by early 2011. We have agreed to shift five percent to countries that are under-represented."

For developing countries there was another pledge from the G20 summit - which represents 90 percent of humanity - that will benefit free flow of trade, services and capital among or between nations.

"We will fight protectionism," said the statement, adding the leaders also remained committed to conclude the Doha Round of multilateral trade negotiations to a successful conclusion in 2010.

"The success of the Delhi ministerial meeting in reviving the process of negotiations was appreciated," said the prime minister, referring to the meeting among 40 members of the World Trade Organisation hosted by Commerce Minister Anand Sharma in the Indian capital.

But there was one area of concern for India.

The leaders' statement said they pledged to phase out and rationalise over the medium term the subsidy given to fossil fuel, and India is uncomfortable with this since it could result in a rise in the prices of transport and cooking fuels.

But a senior member of the prime minister's delegation, nevertheless, explained that the G20 statement clearly called for the removal of "inefficient" fossil fuel subsidies, which should address India's concern to a large extent.

The G20 leaders will now meet in Canada in June next year and then in South Korea in November the same year, followed by the next summit in France in 2011.
Source: IANS
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