India urges developed world to cut agriculture subsidies
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India urges developed world to cut agriculture subsidies

Monday, 16 April 2007, 07:00 Hrs
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Washington: India has called upon developed countries to take the lead to save the Doha round of world trade talks by reducing massive trade-distorting subsidies provided to their agriculture sector.

"It is in everyone's interest to save the Doha Round," Indian Finance Secretary Ashok Jha told the development committee of World Bank-International Monetary Fund (IMF) as the group concluded its two-day spring meetings here on Sunday.

The Bank and the Fund should continue to focus their advocacy and research on highlighting the perils as also the development potential of trade liberalisation, he said noting that a deadline for delivering on the development promise of the Doha Round had been missed again.

Developing countries are strongly committed to a rule-based global trading system and have demonstrated their willingness to be flexible in arriving at an early positive conclusion of the Doha Round, Jha said.

It must be recognised that for several of the world's poor, agriculture is not simply a commercial activity but a way of life and a means of subsistence, he said. The outcome of the Doha round has to factor this in and ameliorate the distress of large sections of the world's poor.

Noting that the pace of global economic growth remained strong during 2006 and exceeded initial estimates, Jha said among the emerging markets, China and India continued to contribute substantially to the growth momentum.

However, the threat of risks lingers and needs to be addressed through national policy responses and coordinated effort at the international level, he said. The benign financial conditions that underpinned global growth may change as evident from the recent bouts of volatility in the financial markets.

While risks remain, the present favourable global economic conditions provide an opportunity to developing countries to further strengthen their policy frameworks, so as to effectively address the many challenges for achieving the Millennium Development Goals (MDGs), Jha said.

He noted with happiness the notching up of a strong overall per capita GDP growth of 5.8 percent in developing countries in 2006 mainly supported by high growth rates in East Asia and South Asia Regions.

While the ultimate responsibility of achieving the MDGs rests with the developing countries themselves through strengthening policies and institutions, the role of the donors in enhancing the volume, quality and predictability of aid and harmonisation is equally important, Jha said.

Donors' action, especially the large ones, appears to be lagging their commitments of 0.7 percent of gross national income as ODA, he regretted.

The Bank must also be careful of not being too prescriptive in an effort to achieve results. The Bank's activities should firmly reflect a country's priorities as captured in its national plan and strategy to ensure sustainable development, Jha said.

Keeping in view the Bank's evolving mandate and the need to maintain its legitimacy in the eyes of its stakeholders, the governance structures of the World Bank Group need to be reformed, Jha said.

India, he said, would also encourage the Bank to continue its engagement in dealing with all aspects of corruption including the role of the private sector and also in strengthening its efforts towards the restitution of assets.

Given energy financing needs of about $165 billion per annum, India feels that the Bank's ambition of raising lending to the 1990s level of $10 billion during FY 2006-08 is too modest.

Finally, apart from financial resources, it is very important for the Bank to play an active role in promoting the development and collaborative transfer of new technologies to developing countries, Jha said.
Source: IANS
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