Finance minister P Chidambaram has made a strong case for encouraging growth in emerging economies at international forums such as the G20.
Since growth in emerging markets is crucial to the strength of the global economy,it is critical that G20 find ways to develop strong links of coordination and cooperation and take up issues of importance to emerging economies, he said on Wednesday at a conference organised by ICRIER,warning that otherwise,G20 may evolve as a loose forum instead of a powerful steering wheel of global governance.
The issue was also taken up at the recently concluded G20 Summit in St Petersburg where emerging economies raised concerns over the impact of withdrawal of quantitative easing measures by the US on their growth.
Pointing out that the agenda setting for the G-20 summit has been largely from the viewpoint of advanced economies,Chidambaram said that emerging markets have accepted this. But given the weak global recovery,he said,We should be careful that the pro-cyclical bias should not be a stumbling block in developing countries.
Chidambaram was also critical of the unwillingness of developed economies to push IMF quota reforms and stressed that decisions taken at the G20 meeting should be implemented expeditiously to ensure credibility of the organisation. Most advanced countries have now clearly indicated their unwillingness to move ahead on International Financial Institutions (IMF,World Bank) governance and capital reform. This has hampered the credibility of G20 and makes it difficult to progress on other issues as well, he said.
Prime Minister Manmohan Singh had emphasised the need for early completion of the International Monetary Fund (IMF) quota reforms to increase representation of the developing countries in the multi-lateral body at the G20 summit. Chidambaram also said that to be able to play a meaningful role in the global governance,the G20 agenda should be sharper and focused only on those issues on which it can make a distinctive contribution,particularly,on economic and financial matters. Finally,it is important to ensure that the decisions taken in G20 meetings are carried forward expeditiously, he said.