Prime Minister Manmohan Singh arrived here today for the G20 summit cautioning against protectionism while declaring it was in India’s interest to have an “open, stable and rule-based” international economic environment including in trade and investment flows.
“Given the vast development challenges we face it is in India’s interest to have an open, stable and rule-based international economic environment, whether in the field of trade, investment flows, technology transfers or open markets,” Singh said on the eve of the fifth Summit of 20 advanced and emerging economies(G20) in the South Korean Capital.
Singh’s comments came as the G20 countries worked to rebalance the lopsided global economy and resolve fractious currency disputes marked by a war of words. The summit’s theme of the Seoul summit is ‘Shared Growth beyond the Crisis’
The summit which will be also attended by US President Barack Obama is also expected to see heated debate on the issue of regulatory reforms of the financial sector.
“This is a key area of work, and we must guard against complacency in the pursuit of a strong financial regulatory framework and effective supervision,” Singh said.
Singh’s delegation for the two-day summit included Planning Commission Deputy Chairman Montek Singh Ahluwalia, Foreign Secretary Nirupama Rao and Finance secretary Ashok Chawla.
“We have to be particularly wary of protectionist sentiments. There are also developmental imbalances within and between countries, and rebalancing of the world economy is a major challenge. The success of the Mutual Assessment Process is important in this regard.” Singh said in a statement.
“India will actively participate in this process to strike the right balance between ensuring its credibility as well as the national interests of countries,” he said.
The Prime Minister said the Seoul Summit will focus on the G20 framework for strong sustainable and balanced growth, including an ambitious outcome in the form of the Seoul Action Plan.
“We will work with the others towards this end, and also encourage the G20 to focus on the development agenda which is being introduced for the first time in Seoul. We must also give though to how we can leverage global imbalances to bridge the infrastructure gap between rich and poor nations,” Singh said.
In the financial sector, the Prime Minister said, the Summit should build on the process of IMF reform on which good progress was made last month at the G20 Finance Ministers meeting with an agreement on shifts in quota shares, including in favour of India, while protecting the vote share of the poorest.
He said the Summit will also look at issues of regulatory reforms of the financial sector and consider the new Basel-III norms.
“This is a key area of work, and we must guard against complacency in the pursuit of a strong financial regulatory framework and effective supervision,” he added.
Singh said the world economy was on the path of recovery but nations should keep their focus on how to optimise global outcomes in an increasingly interdependent world.
“As the Indian economy moves to a higher growth path, and opens to the world, our stake in a stable, inclusive and representative global economic and financial system will only grow,” he said.
Noting that this is the second G20 Summit this year, the Prime Minister said this reflected the high expectations the world has from the G20 in moving beyond the immediate crisis that the world faced in 2008 to ensuring a sustained and balanced economic recovery in the long term.
The Seoul Summit is the first G20 Summit outside a G-8 country and the first in Asia.
On the margins of the Summit, Singh will have bilateral meetings with British Prime Minister David Cameron and Canadian Prime Minister Stephen Harper among others.