India hits hard at protectionist tendencies in rich nations


United Nations : India has come out strongly against protectionism in any form saying such measures would only serve to delay the global recovery from the economic crisis and would only create problems for the future.

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“There is widespread recognition of the need for more effective regulation of the international financial system,” said Saif-Ud-Din Soz, MP, Monday during a UN committee discussion on International Financial System and Development.

“We must collectively act to avoid a repetition of such a crisis,” he said expressing concern “at the increasing protectionist tendencies in developed countries.

“We must eschew protectionism in any form, be it in movement of goods and persons or in financial services,” he said noting, “Such measures will only serve to delay the global recovery.”

“In our efforts to address the crisis, let us not create problems for the future,” said Soz reiterating the “critical need for a stable and inclusive international financial system that assists development efforts.”

Welcoming recent moves to reform international governance structures, he said, “much deeper changes are required, including at least an initial 7 percent transfer in quotas at the IMF to developing countries.”

“We must ensure the full and effective participation of the developing world in the global financial and economic architecture, including in the governance structures of norm-setting and decision-making bodies,” Soz said.

Noting that “developing countries, where the crisis did not originate, have been the worst hit, he stressed the “paramount importance” of “the need to revive the global economy, and the complex challenges this poses for developing countries.”

“The road to recovery remains slow and arduous, despite the scant green shoots of recovery visible in some areas,” Soz said cautioning against “the tendency to prematurely withdraw these stimulus measures under the misguided objective of an ‘orderly exit'”.

“In order to ensure an early return to global growth, we must encourage growth in developing countries through counter-cyclical measures,” he said suggesting that lost export demand be made up through expansion in other components of domestic demand like investment.

Advocating increased infrastructure investment in developing countries, he said: “This measure would also serve to lay the basis for a high-growth trajectory in future.”