Warning that the financial meltdown has exploded into a systemic crisis, Prime Minister Manmohan Singh asked world leaders to work on a coordinated fiscal package to tackle recession that is hitting India and other developing countries.“India is experiencing this negative impact... Emerging market countries were not the cause of this crisis but they are among the worst affected victims,’’ Singh said addressing the G-20 summit, convened by US President George W Bush.Attributing the crisis to the failure of regulatory and supervisory mechanism, Singh said, “We must give the world a clear signal to take specific action to handle the crisis in a way which restores confidence and which also responds to the needs of the developing countries.’’ He said a credible system of multilateral surveillance which can signal the emergence of imbalances must be designed to prevent from the recurrence of such crisis and suggested a multi-pronged approach to spur investment, global trade and capital flows.Advocating a coordinated fiscal stimulus to help mitigate severity and duration of the recession, Singh pressed for steps to strengthen the global trading system and forestall any protectionist tendencies which surface during such crisis. Singh, 76, an economist himself, prescribed a slew of measures, including shortterm swap arrangements, special incentives to counter shrinkage of capital inflows and activating a process of replenishing IMF resources. “Resorting to fiscal stimulus may be viewed as risky in some situations, but if we are on the brink of the worst downturn since the great depression, the risk may be worth taking,’’ he said.
No comments:
Post a Comment