FMs of BRIC say protectionism would retard global recovery
London: India on Friday said protectionist moves
in the name of regulatory and financial reforms would retard
global economic recovery at a time when 30 member-countries of
WTO decided in New Delhi to resume the stalled Doha Round of
negotiations for a global trade agreement.
A joint communique, issued after a two-hour meeting of
finance ministers of BRIC nations ahead of G-20 Finance
Minsters` conference here, said the ongoing regulatory reforms
in the financial sector should not impede cross-border capital
flows and investments.
Failure to do so would risk compromising on the expected
recovery of the world economy, they said and added that
protectionism remains a real threat to the global economy and
should be avoided both in direct and indirect form.
“We believe that governments should work towards prompt
and successful conclusions of the WTO Doha Round in a way that
ensures an ambitious, comprehensive and balanced outcome."
Later talking to reporters, Indian Finance Minister Pranab
Mukherjee said in the name of fianacial reforms, protectionism
should not be allowed to creep in.
Meanwhile in New Delhi, trade ministers of 30 nations
today in an informal WTO ministerial meeting decided to resume
global trade talks, which ended in a deadlock over farm
subsidies in Geneva in July last year.
Mukherjee and his counterparts from Russia, China and
Brazil asserted that this is not the time for operationalizing
an exit strategy, which means that stimulus packages for
slowing down economies must be continued.
Mukherjee also said India will lend up to USD 10 billion
to IMF to make funds available to countries in need. It will
not load the government and will not stretch its resources,
already hit by a slowing down economy.
India said that such bilateral financing are only a
"temporary bridge" and IMF should reform the quota process in
favour of emerging and developing countries.
Mukherjee told reporters that "what is needed now is
reform of international financial institutions taking into
account the ground reality".
"The reform of international financial institution is
crucial to insure a stable and balanced global economy. For
the IMF and the World Bank Group, the main governance problem,
which severely undermine their legitimacy, is the unfair
distribution of quotas, shares and voting power."
Priority should be given to substantial shift of quotas
and shares in favour of developing countries, he said.
"The big countries proposed setting up of a target for
that shift of order of 7 per cent in the IMF and 6 per cent in
the World Bank group so as to reach an equitable distribution
of voting power between advanced and developing countries."
"This would lead the overall share of emerging market and
developing countries in the IMF and World Bank to correspond
roughly to their share in the world GDP," Mukherjee said.
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