India urges higher resources transfer to developing nations
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India urges higher resources transfer to developing nations

Monday, 30 September 2002, 07:00 Hrs
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WASHINGTON: India Sunday led the developing nations in demanding elimination of trade barriers and an enhanced transfer of resources to help the third world acquire a higher growth path, a perquisite for the elimination of its poverty.

Participating in the annual World Bank-International Monetary Fund (IMF) meetings, Indian Finance Minister Jaswant Singh also raised the controversial issue of Bank-Fund conditionalities attached to its developmental funding, urging a "clear and visible" reduction in their burgeoning numbers.

Since the issue is under review, he suggested that the modified guidelines should provide room for considerable flexibility and take into account country-specific circumstances, including the political economy of programme implementation.

"We need to assiduously avoid a gap-filling approach to conditionalities in which the conditions excluded by one institution is taken up by another," Singh said.

Singh, who is attending the multilateral institutions' annual sessions for the first time after taking over the finance portfolio early this year, emphasized the need for trade promotion through lifting of market barriers erected by the industrialized nations.

In fact, he wanted the multilateral institutions' intervention in persuading rich nations to dismantle their market barriers, described as a major constraint in their developmental efforts. This was an area where the Bank could play a "very important role in identifying crucial constraints and in financing the critical investment needed," the Indian minister said.

He favoured the Bank directing its analytic work at further advocating dismantling of trade distorting barriers in industrialized countries and strengthening the abilities of smaller developing countries to negotiate.

The World Bank appeared in agreement with the Indian viewpoint. Chief economist Nicholas Stern told a press conference during the meetings that improving market access for developing countries was one of the most important steps that the rich countries could take to help fight global poverty.

"It is hypocrisy to encourage poor countries to open their markets while imposing protectionist measures that cater to powerful special interests. Rich countries should lead by example," he said.

Barriers to developing countries' exports to high-income countries include tariff peaks and quotas, massive agricultural subsidies, anti-dumping actions, restrictive rules of origin, and product standards that are applied arbitrarily and bureaucratically, sometimes as disguised protectionism.

While arguing for larger capital flows to the poor countries, Singh voiced concern at the declining official development assistance (ODA) despite the monetary consensus on these issues.

In the economic global downturn, he said, India's performance "remains one of the strongest in the world" in sharp contrast to its poor rating by Standard & Poor. He objected to classifying countries into performers and non-performers on the basis of compliance levels determined by markets and rating agencies, rather than international institutions.

Source: IANS
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