India urges G20 to shun protectionism

Indian Prime Minister Manmohan Singh urged the Group of 20, which meets from Thursday, to make a stand against protectionism and called for a greater role for emerging nations in the running of multilateral lenders.

The global economy and financial markets have shown an improvement since G20 summits earlier this year, but the world economy was “still not out of woods”, Singh said in a statement on Wednesday.

“We would also like to see a strong message to emerge from Pittsburgh against protectionism in all its forms, whether trade in goods, services, investment or financial flows,” Singh said before leaving for the summit in the United States.

He said the Pittsburgh summit is expected to focus on medium- and long-term goals such as a framework for sustainable and balanced growth and strengthening the international financial regulatory system.

It is also expected to focus on reforms at the International Monetary Fund (IMF) and development banks, support for the poor, an open global economy, energy and climate change.

“It is necessary for India to engage in the management of the world economy because we have a lot at stake, and a lot to contribute,” he said.

India’s Finance Minister Pranab Mukherjee said on Wednesday that the country’s economic growth, which stood at an annual 6,1% in the quarter ended in June, would be better in coming quarters.

India’s economic growth slowed to 6,7% in the year that ended in March after three straight years of expansion of at least 9%, and Singh said the economy showed signs of reviving growth.

“Our growth is primarily driven by domestic demand, our savings rate is robust and the external sector has exhibited resilence,” he said.

Emerging economies have been flexing their growing economic clout to call for a stronger voice in the running of multilateral agencies such as the IMF and the World Bank.

The World Bank on Tuesday approved $4,3-billion in loans for India to help finance infrastructure building and to shore up the capital of some state banks as the economy recovers from the global financial crisis.

Singh said on Tuesday that past G20 meetings have been followed by increased lending from the World Bank to India.

“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,” Singh said.

“There is a need to carry the process of governance reforms of international financial institutions further to give greater voice and representation to under-represented countries,” he said.

On the sidelines of summit, Singh is set to meet other leaders including Yukio Hatoyama, new Prime Minister of Japan.—Reuters

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