G20 summit: Boost govt spend, keep exchange rates stable, says PM Narendra Modi

In inaugural address, Xi Jinping says world economy again at critical juncture, 8 yrs after financial crisis

Written by P Vaidyanathan Iyer | Hangzhou | Updated: September 5, 2016 7:33:47 am
US President Barack Obama with PM Narendra Modi at the G20 Summit welcome dinner hosted by Chinese President Xi Jinping in Hangzhou on Sunday. AP US President Barack Obama with PM Narendra Modi at the G20 Summit welcome dinner hosted by Chinese President Xi Jinping in Hangzhou on Sunday. AP

TO REVIVE global growth, Prime Minister Narendra Modi Sunday laid out a six-point agenda for structural reforms which advocated a strong focus on public investments, and asked G20 countries to create an environment for free flow of goods and services and human resource besides calling upon them to refrain from competitive devaluation of currency.

Intervening on the opening session of the G20 Summit, the Prime Minister said countries need to revisit their basket of fiscal and monetary policy tools, keep exchange rates stable and encourage implementing demand-supporting policies to give growth a leg up. “We meet at a time when the global situation faces complex political and economic challenges,” he said, addressing the G20 country leaders.

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“A frank, even a difficult conversation won’t be enough. What G20 needs is an action-oriented agenda of collective, coordinated and targeted action,” he said, adding this would require strong network of partnerships. On its part, his government aimed to nurture India’s growth aspirations by boosting domestic production, enhancing infrastructure investment and creating a pool of human capital, he said.

Earlier, in his inaugural address, Chinese President Xi Jinping, who has hosted the G20 in Hangzhou, said though the world economy was recovering, it faced multiple risks and challenges such as insufficient growth momentum, lack of demand, repeated volatility in financial markets, and sluggish international trade and investment, as reported by China’s state-run news agency Xinhua.

Setting the stage for discussions during the two-day summit, Xinhua quoted Xi as saying the world economy was once again at a critical juncture eight years after the global financial crisis. He said the growth momentum brought by the previous wave of technological progress was waning while the latest wave of technological and industrial revolution is yet to gather steam, Xinhua reported.

The Chinese President noted that globalisation faced setbacks as protectionism reared its head and multilateral trade arrangements were being impacted. An ageing population on top of a slowing population growth rate also weighed on the economy and society of major economies, he said.

The theme of the G20 summit is ‘Toward an Innovative, Invigorated, Interconnected and Inclusive World Economy’. Xinhua said the summit would focus on topics essential to the world economy, including macro-economic policy coordination, innovation-driven growth, more efficient world governance, robust trade and investment, and inclusive and interconnected development.

PM Modi said that the G20 countries faced common challenges, and also similar opportunities. “Connected machines, digital revolution and new technology were laying the foundation for the next generation global growth,” he said. Modi also acknowledged US President Barack Obama, who according to him, has always been a strong advocate for building global partnerships and a constant voice for collective action.

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