PM to join global firefight at G20; may call for regulation

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Prime Minister Dr Manmohan Singh who is taking part in the G20 meet at Washington has said, "This gathering of world leaders takes place against the backdrop of the financial crisis that has emanated in the United States and Europe. It has become clear over the last several weeks that the effects of the crisis are spreading. In varying degrees, all countries will be impacted."

 

"We are facing the prospect of a global economic slowdown. I look upon the summit as an opportunity to exchange views with other leaders on the reasons behind the recent developments and to consider what measures can or need to be taken by the international community to arrest the negative fallout," the Prime Minister added. 

 

The Finance Minister of India, P Chidambaram, said, "We must move to a new order of global oversite and this can come only by, as the Prime Minister said, greater inclusivity in the financial system. In many ways the IMF has been unable to be an early warning system."

 

Restructure IMF, WB: India

 

The Indian delegation, which also includes Finance Minister P Chidambaram and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia is also expected to ask for greater coordinated response from global regulators to deal with the current financial crisis.

 

Here is a transcript of CNBC TV18's Correspondent Abhijit Neogy on CNBC TV18.

 

India wants a global coordination mechanism to deal with the financial crisis and is seeking and increased role for the International Monetary Fund and the World Bank. India is also open to floating a new global institution to deal with crisis.

 

India has also said that the current crisis is one of confidence. The Prime Minister is also seeking a greater say for emerging economies at IMF and WB and is expected to pitch for greater capital flows for India and Bric economics.

 

The Prime Minister may also ask for enhancing regulatory oversight and accounting practices. Emerging markets say that bad regulation, negligence by rating agencies, over-leveraging led to the current crisis.

 

Expectations from G20

 

Here are two expert views on what they expect ahead of the crucial G20 meeting this week.

 

Kenneth Rogoff, Former Chief Economist, IMF, said, "If just one region regulates their bank one way and the others don't follow, that's not going to work. We do need a global movement; the transition in the US is a good thing. It gives Europe and Asia a chance to have a voice instead of being overwhelmed by the new administration and the US has been very defensive in the last five-six years. [The other countries should say] we have got a goal, you should be like us. You should imitate us and I think it is a good moment to have this meeting and give the rest of the world to pitch in before the rest of the world takes over."

 

Hans Goetti, CIO, LGT Bank, said, "My expectations of G20 meeting are very low. We are talking about an outgoing President calling in the Heads of State to redesign the state. I cannot see anything coming out of that with Barack Obama not even participating. It cannot place the groundwork for the next few years. People will be sitting aroung the table and talk but my expectations are relatively low for the meeting."

 

Amid all the hype about the G20 meet, here's a lowdown on what exactly G20 is.

 

The G20 meet consists of 20 economies, which together comprise of 80% of the world's trade and have two-thirds of the world population. Formed in 1999, the G20 consists of finance ministers and central bank governors of 20 countries, IMF and the World Bank. The G20 members include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, US, EU apart from IMF and World Bank.

 

Also watch the accompanying video.