Global leaders take a leaf from Manmohan Singh’s book (Roundup)

November 16th, 2008 - 10:26 pm ICT by IANS  

Manmohan SinghWashington, Nov 16 (IANS) Outlining a far-reaching action plan to tackle the growing global economic crisis, world leaders have agreed to act urgently upon all the three major issues Indian Prime Minister Manmohan Singh raised at the G-20 summit here.Meeting in the historic summit, the presidents and prime ministers from the Group of 20 leading economies called for greater oversight of financial markets and more efforts to bolster national economies even as they agreed to start work on reshaping international financial institutions.

In a declaration released at the end of their two-day summit here Saturday, they pledged to arrest the damage wrought by the global financial crisis by taking all steps necessary to stabilise the financial system based on five common principles.

Coming from six continents with diverse economic systems, they managed to find some common ground on both the causes of the crisis and areas that need to be fixed, but as expected they sketched out an agenda for more work in coming months.

They also agreed to meet again by the end of April to review the progress on the announced initiatives. By that time their host, US President George W. Bush, would have handed the charge of the world’s largest economy to president-elect Barack Obama.

At the summit, Manmohan Singh articulated three major points: the need for greater inclusivity of emerging markets in the international financial system; the need to ensure that the growth prospects of the developing countries are not hampered, and the need to avoid protectionist tendencies.

Seeking a global response to the financial crisis, he called for a multi-pronged response to arrest the deepening recession and avoid another one in future.

“Since the crisis is global, it calls for a coordinated global response and this summit is, therefore, timely,” he said Saturday.

Among the measures suggested by Manmohan Singh were a coordinated fiscal stimulus to mitigate the severity and duration of the recession, special initiatives to counter the shrinkage of capital flows to developing countries and a reform of the global financial architecture to prevent similar crises in future.

Under the plans outlined by the leaders, countries such as India, China and Brazil would gain greater roles and responsibilities as part of a restructuring of the international financial system.

European leaders also won a commitment to new regulations and controls on banks, rating agencies and exotic financial securities.

The leaders also agreed that a dramatic failure of market oversight in “some advanced countries” was among the root causes of the crisis, an implicit rebuke of the US.

“I’m a free market person,” President Bush told reporters after the summit ended, “until you’re told that if you don’t take decisive measures then it’s conceivable that our country could go into a depression greater than the Great Depression.”

In the run-up to the April meeting, the leaders said they would continue to work toward stimulating economic demand. The final 3,600-word declaration endorsed several stimulative measures, including interest rate cuts by central banks around the globe or potential economic stimulus packages.

They added that they would boost developing countries struggling under the weight of the crisis. That could entail funnelling additional funds to the International Monetary Fund (IMF).

Obama did not attend the summit and instead sent former US secretary of state Madeleine Albright and Jim Leach, a former Republican congressman from Iowa.

“There is one president at a time, so the president-elect asked us to represent him in receiving the views of these important partners,” Albright and Leach said in a statement late Saturday.

“We also conveyed president-elect Obama’s determination to continuing to work together on these challenges after he takes office in January.”

Montek Singh Ahluwalia, deputy chairman of the Planning Commission, and seen as the Indian “sherpa” for the summit, was among those who met the Obama team.

Attending the summit were leaders from 19 of the world’s largest economies including India, China, Brazil, Saudi Arabia and Japan, as well as the European Union.

The G-20 represents 90 percent of the world’s economy and 75 percent of the global population.

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