M A I N   N E W S

Asia, Europe close ranks

Beijing/London, October 25
Asian and European leaders closed ranks on Saturday to try to bolster confidence among investors who fear that a global credit crunch has ushered in a deep and damaging world recession.

The worst financial crisis in 80 years has forced countries to work together to find ways to help shore up a financial system crippled by banks fearful of lending to each other.

But with evidence mounting that Europe is already in recession, analysts fear that cooperation in shoring up the banking systems could be threatened as governments begin to turn their attention to reviving domestic demand.

“We must use every means to prevent the financial crisis impacting the growth of the real economy,” Chinese Premier Wen Jiabao said at the end of a two-day summit of 43 Asian and European leaders in Beijing.

Governments have pledged around $4 trillion to support banks and restart money markets to try to stem the crisis and have looked into introducing tougher financial rules to guard against any repeat.

Wen said countries needed to strike a balance between innovation and regulation and between savings and consumption. “We need financial innovation, but we need financial oversight even more,” he said, adding that China’s priority was to spur domestic demand to ensure the country maintained fairly fast, steady growth. — Reuters

Growth should be inclusive: PM
Anil K Joseph

Beijing, October 25
In the midst of talk of collapse of capitalism and the current financial crisis, Prime Minister Manmohan Singh today said development had to be inclusive and disparities of income and wealth should be reduced for globalisation to succeed.

He also lamented that the global community had not lived up to its commitments on technology-transfer and additional financing and mooted a “global action plan” to promote both food and energy security to ensure sustainable development.

During an intervention at the Asia-Europe (ASEM) Summit, Singh said that for globalisation to succeed, it must be fair and benefit the whole of humanity.

“Development has to be inclusive.It must reduce disparities of income and wealth. It should create ever-widening circles of stake holders. It should respect pluralism and diversity,” he said.

The Prime Minister also felt that there could not be sustainable development without peace and emphasised the need for strengthening global cooperation to combat terrorism. “Without peace, there can be no sustainable development.Terrorism, extremism and intolerance threaten our social cohesion,” he said. — PTI

No recession: RBI
Tribune News Service

Mumbai, October 25
Despite signs of inflation coming down on the back of falling prices of commodities, including oil and steel, the Reserve Bank of India remains concerned about price pressures on the economy, RBI Governor D. Subbarao told reporters here today.

Speaking a day after the markets gave thumbs down to the apex bank’s decision to keep major rates steady, Subbarao said the RBI needed to balance concerns of maintaining price stability and sustaining growth.

“The RBI has a target of lowering inflation to about seven per cent by March end,” Subbarao said.

The Governor said while the wholesale price index was lower, the rising consumer price index (CPI) was a cause of concern. “The RBI makes a deeper study and if one analyses the consumer price index, the CPI for agricultural and rural labour was up by 11 per cent and that for industry was up 9 per cent,” Subbarao said. He further noted that oil prices continued to be volatile and the weakening rupee was also adding to inflationary pressures.

Maintaining that India’s growth story was on track, the RBI Governor said there would be no recession in the country though there would be some moderation in growth.

The apex bank expects GDP growth for the current financial year to be between 7.5 to 8 per cent, he said, adding the country’s economic growth was determined more by domestic demand and would be somewhat insulated from global financial problems.