Special Correspondent

Business leaders take part in 24th India Economic Summit

700 business leaders from 35 countries took part

India’s financial sector is much cleaner: Kamath

NEW DELHI: Business leaders on Sunday gave a call to all countries to reject protectionism even in the wake of the global financial crisis and work towards the conclusion of the Doha Round of global trade negotiations under the World Trade Organisation.

At the 24th India Economic Summit organised here by the Geneva-based World Economic Forum (WEF) in partnership with the Confederation of Indian Industry (CII) under the theme ‘Securing India’s future growth,’ the call by corporate honchos to support the multilateral trading system echoed a similar statement by G-20 nations in their final communiqué at the global summit on the financial crisis in Washington. Nearly 700 business, government and civil society leaders from over 35 countries are attending the three-day summit.

Setting the tone for discussions at the opening plenary session, Bajaj Auto Chairman and Rajya Sabha member Rahul Bajaj said that as the global financial crisis unfolds, “All of us, especially the developed world, should not go in for protectionism…We have to save our industry, but not by a beggar-thy-neighbour policy.”

Buttressing Mr. Bajaj’s viewpoint, Satyam Computer Services Chairman B. Ramalinga Raju said: “Competitiveness will be the key driver; protectionism will be dangerous if it comes in the way of entrepreneurship.”

Panelists also called for successful conclusion of the current round of global trade talks which has remained stalled for months. “It would be good for India to take the lead in getting the Doha Round restarted,” said Rajat M. Nag, Managing Director-General of the Manila-based Asian Development Bank (ADB).

During the session, ICICI Bank CEO & Managing Director and CII President K.V. Kamath assured participants that India’s financial sector was “much cleaner” than those of other countries owing to strong capital adequacy and the low level of non-performing loans. Holding out a warning against overreaction, he said: “The fundamentals which created the crisis do not exist in India today…Fear has overtaken business to a level beyond what it should be.”

Mr. Kamath projected that as interest rates come down further, ICICI and other financial institutions would loosen credit, which would go a long way in stimulating consumer demand and reviving growth.

Presenting ADB’s projections, Mr. Nag said the developing Asian economies would grow by 7.5 per cent in 2008 and by slightly under six per cent in 2009. Given Asia’s continuing strong growth, “this is not the time to have a wake,” he said while noting that India should continue to invest in infrastructure, health and education “rather than panicking and forgetting the future.”

Asian economies, the ADB chief said, should focus on the one billion people in the region who are most vulnerable to the crisis and live on only about $1 a day. “This group may slip below the barest subsistence level…Don’t forget the other face of Asia and the other face of India, which were not shining before and are not shining now,” he said.

Earlier, Klaus Schwab, Founder and Executive Chairman of WEF told participants that to adequately address the global financial crisis and other international priorities, “we must have multi-stakeholder involvement…You cannot solve all global issues on the basis of defending only national interests and making compromises later. We need global solutions.”