By IANS,
New Delhi : Underlining India’s confidence about its economic future and prospects of global growth which had been dented by the meltdown, Prime Minister Manmohan Singh Wednesday called for reform of international financial bodies and opposed all forms of protectionism on the eve of the G20 summit in Pittsburgh.
“Even though our economic growth rate has slowed to 6.7 percent in 2008-09, India approaches the Pittsburgh summit with a sense of confidence,” Manmohan Singh said in a statement before leaving here for Pittsburgh.
Stressing strong signs of India’s economic recovery and its continuing attractiveness as an investment destination, the prime minister said: “Our growth is primarily driven by domestic demand, our savings rate is robust and the external sector has exhibited resilience.
“Capital flows, especially portfolio flows, have started picking up, and we remain an attractive investment destination,” he said.
Manmohan Singh, however, added that although the global economy and financial markets have shown “a distinct improvement”, the global economy was “still not out of the woods”.
The prime minister also pitched for a more proactive role of India in the management of the global economy and pushed for reforms of global financial institutions.
“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.
“I will convey India’s interest in seeing the earliest possible return to trend growth and stabilisation of the banking and financial sectors in the advanced economies, because this directly affects our exports, capital inflows and investment,” he said.
Alluding to the expansion and strengthening of the erstwhile Financial Stability Forum — now the Financial Stability Board — and the Basel Committee on Banking Supervision, the prime minister said it was “a step in the right direction to address the regulatory aspects”.
“There is a need to carry the process of governance reform of international financial institutions further to give greater voice and representation to under-represented countries,” he added.
With some developed countries resorting to protectionism that has the potential to affect global economic recovery, the prime minister reiterated India’s principled opposition to protectionism. “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.”
Planning Commission Deputy Chairman Montek Singh Ahluwalia will be the prime minister’s “sherpa” or key aide at the two-day summit that starts Thursday and is hosted by US President Barack Obama. Manmohan Singh will meet several world leaders, including Japan’s new prime minister Yukio Hatoyama.
This will also be the 10th year of the G20 initiative, which started at the level of officials and central bank governors in 1999 following the East Asia financial crisis, and was also elevated to the summit level last November.
It brings together rich nations and dynamic emerging economies to resolve issues relating to the management and regulation of global financial institutions like the International Monetary Fund (IMF), the World Bank and the International Finance Corp.
The Pittsburgh Summit, which will bring together a group of countries that accounts for 90 percent of the global output, 80 percent of world trade and two-thirds of humanity, is also expected to issue a declaration or a communique.
Ahead of the summit, India has also committed to invest up to $10 billion in the IMF as part of the major thrust to wrest a greater say in the running of the international financial institution and replenish the fund to help countries struggling in the current financial crisis.
Besides India and the US, the G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, Britain and the EU.