Strongly emphasizing the need for strengthening the international financial regulatory system and reforming the structure and mandate of the IMF and World Bank, Prime Minister Manmohan Singh made it clear this agenda would top India’s list of priorities at the forthcoming G20 summit in Pittsburgh on September 24 and 25.
In a statement released prior to his departure from Delhi on Wednesday, Dr. Singh said it was “necessary for India to engage in the management of the world economy because we have a lot at stake, and a lot to contribute”.
While Indian officials are clear that their focus at Pittsburgh will be on taking the reform component package of last April’s London G20 summit to a higher plane, the Prime Minister’s statement acknowledged that the imperatives of “an open global economy and energy and climate change” --- flagged as priorities by Europe and the United States --- were also likely to figure prominently in the summit agenda.
Dr. Singh said he would convey India’s interest in seeing the “earliest possible return to trend growth and stabilization of the banking and financial sectors in the advanced economies”. This was
because the developing world’s exports, capital inflows and investment were directly affected by what was happening in the OECD countries. “We would like to see a continuous increase in the capital base of multilateral development banks to finance the massive infrastructure needs of emerging markets”.
The Prime Minister acknowledged the benefit India had received from the $1.1 trillion London package. “The steps taken by the G20 to augment the resources of the multilateral development banks have led to substantial stepping up of World Bank lending to India”, he said.
At the same time, he sought to remind the world that India’s growth rate of 6.7 per cent --- well above the global average --- was “primarily driven by domestic demand”.
Pointing to the recent expansion of the Financial Stability Board and Basel Committee on Banking Supervision as steps in the right direction as far as addressing the regulatory aspects of the crisis was concerned, the Prime Minister said there was now a need to “carry the process of governance reform of international financial institutions to give greater voice and representation to under-represented