By Dipankar De Sarkar, IANS,
London : Prime Minister Manmohan Singh, the soft-spoken economist who leads the world’s loudest and largest democracy, will be much in demand at a gathering of the world leaders here Thursday.
With degrees from Oxford and Cambridge universities and an enviable track record as Reserve Bank of India governor and finance minister, Manmohan Singh is expected to argue for the reform of the International Monetary Fund (IMF) and caution the world’s richer nations against adopting protectionist policies.
The Indian leader, who arrived in London Tuesday night, will also expect the governments of wealthy countries to repair their failing banking systems, restore capital flows to developing countries and agree upon an overall fiscal stimulus package, informed sources said.
Straddling the rich and poor worlds, he is expected to strongly argue the case for not only the leading emerging economies around the G20 table Thursday, but also some of the world’s poorest nations who are largely unrepresented at the London summit.
“An agreement for effective, credible fiscal stimulus is the responsibility of all major economies,” Manmohan Singh said, setting the tone in an interview published in the Financial Times Wednesday.
“The problems of emerging economies should also be taken in board. The decline in capital flows that has taken place should be made good by providing adequate resources to the international financial institutions to come to the rescue of the emerging countries and low-income countries.”
The IMF expects a reduction by $700 billion in private capital flows to developing countries this year and India is keen to see the multilateral financial system replenish lost flow for two to three years in order to kick start lending – in particular by the Asian Development Bank and World Bank, whose lending has flattened out to around $13 billion, sources told IANS.
Manmohan Singh wants rich countries to roll back protectionist measures not only in goods, but also in services.
“Some action by the developed countries, particularly the withdrawal of capital resources from the developing countries by the banks of developed countries is equally worrisome,” he told the FT.