In Brown146;s footsteps

The Europeans seem to have succeeded in persuading the American president that urgent international action is required to deal with the financial crisis. George W. Bush has agreed to host world leaders to look at the measures already in place and to plan for the future 8212; a summit expected to include at least the G8 countries, China and India. This is indeed the essential next step, and it is one that India needs to get behind at the earliest possible moment.

The backwardness of India8217;s financial sector might have insulated it from some of the worst immediate effects of the crisis, but that won8217;t last. Tightening credit has already started affecting the real economy, and the engines of inclusive growth 8212; small and medium enterprises 8212; will suffer disproportionately. External investment will dry up, and demand for Indian exports could start shrinking as well. India has a stake in fixing the crisis; and it needs to have a say in the design of the international financial architecture, even as it goes about setting its own domestic structures. China has already started discussing the possible nature of reform, and has initiated the political posturing that international negotiations require. It is time that India8217;s political class joined in.Initial reports suggest the first summit in November will lay out 8220;principles8221;, but it should be made clear that that will not be enough. At least something concrete will have to come of it, to keep confidence in the process high. Also for that reason, the successful candidate in the US presidential election must be present. As for what is required: British PM Gordon Brown has already made a start, suggesting restructuring the IMF and more effective links between national regulators. Big ideas are needed, and like at trade talks, all countries will have to give up a little to gain a lot. India8217;s politicians need to learn from the domestic politics over the nuclear deal. The case for international engagement needs to be made quickly, firmly, and in unison.