New Delhi, November 13
Shortly before flying to Washington to attend the G-20 meet, Prime Minister Manmohan Singh today expressed concern over the likely slowdown in the growth of developing countries due to the meltdown and called for strengthening global financial institutions, like the IMF and the World Bank, to avert such crisis.
He emphasised that India’s efforts at the G-20 conclave would be to ensure that the fallout of the global financial crisis on developing countries was minimal.
“Our message to G-20 will be that they will do everything in their power so that the implementation of millennium development goals by developing countries will not be affected,” Singh told reporters when asked how the global financial crisis would affect developing countries of the region.
Singh was at a joint press conference with leaders of other member-countries of the Bay of Bengal initiative of multi-sectoral technical and economic cooperation - a regional grouping comprising India, Bangladesh, Sri Lanka, Bhutan, Nepal, Myanmar and Thailand.
The Prime Minister later left for the US to attend the summit called by President George W. Bush to discuss with leaders of developing countries the situation arising from the economic slowdown and formulate a strategy to tackle the crisis.
International financial institutions such as the
IMF and World Bank and regional development banks should be strengthened so that the fallout of the global financial crisis on developing countries was minimal, he said.
“Though it originated in the US and Europe, we are affected but relatively less than the banking and financial sectors of developed countries,” he said, underlining that the banks of developing countries in the region were better regulated and have healthy cash reserve ratios that could protect them from the meltdown.
“There is no threat to the financial health of region,” he said.
He, however, expressed concerns over the long-range effects of the ongoing meltdown.
“The growth rate in these countries is likely to be affected. That will affect exports of developing countries,” he said. International financial institutions are reluctant to lend and there may be difficulties in balance of payment for least developed countries, he added. If the flow of funds from developed to developing countries is affected, it will affect the capacity of developing countries to implement the millennium development goals, he said.
