Finance Minister Yashwant Sinha has asked the International Monetary Fund (IMF) to introduce a compensatory mechanism for the developing countries to protect them from the fluctuations in the international oil prices and take other ''swift policy measures'' to address their concerns over trade inhibiting moves of the industrialised nations. ''Given the critical importance of the oil sector to the global economy and the interests of developing economies in particular,'' such a move is necessary to ensure their unstinted economic growth, Sinha said while addressing the financial committee of the IMF on Saturday.
''The fund and other multilateral institutions should keep a close watch on the deleterious effects of oil price volatility on developing economies and should assist these economies to sustain their development efforts,'' he said.
''Inclusion of an oil element'' in the present compensatory financing facility ''is a much-desired initiative,'' the finance minister said. Sinha's suggestion assumes significance in the light of the current rising trend of international oil prices and the termination of the Administered Price Mechanism (APM) from April one this year, linking the local market prices to the prevailing global rates.
He also appealed for steps to ensure that the industrialised nations open up sectors like textiles and services, which are of significant export interest for developing countries. The developed countries should also phase out trade prohibitive agricultural subsidies and desist from initiating other new trade inhibiting measures.
Bureau Report