Prime Minister's Statement prior to his departure for Pittsburgh, PA USA for the G-20 Summit
September 23, 2009
I leave today to attend the Summit of G-20 Leaders in Pittsburgh, USA. This is the third Summit of the G-20 Leaders in less than a year. This reflects the seriousness which the G-20 countries attach not just to the recovery of the global economy and financial system, but to a recovery that is coordinated, sustainable and enduring.
The Summits in Washington and London were convened at the height of the global economic crisis, and therefore focused on the urgent and the immediate. The London Summit resulted in ambitious liquidity stimulus measures and growth packages. Importantly, it pledged to mobilize USD 1.1 trillion of resources for international financial institutions, largely to sustain growth in emerging markets. The steps taken by the G-20 to augment the resources of multilateral development banks have led to substantial stepping up of World Bank lending to India.
The global economy and financial markets have shown a distinct improvement since then, but we are still not out of the woods.
Even though our economic growth rate has slowed to 6.7% in 2008-09, India approaches the Pittsburgh Summit with a sense of confidence. Our growth is primarily driven by domestic demand, our savings rate is robust and the external sector has exhibited resilience. Capital flows, especially portfolio flows, have started picking up, and we remain an attractive investment destination.
The Pittsburgh Summit is expected to focus on medium and long-term issues such as a framework for sustainable and balanced growth, strengthening the international financial regulatory system, reforming the mandate mission and governance of the IMF and development banks, strengthening support for the most vulnerable, an open global economy and energy and climate change.
It is necessary for India to engage in the management of the world economy because we have a lot at stake, and a lot to contribute.
I will convey India’s interest in seeing the earliest possible return to trend growth and stabilisation of the banking and financial sectors in the advanced economies, because this directly affects our exports, capital inflows and investment. We would like to see a continuous increase in the capital base of multilateral development banks to finance the massive infrastructure needs of emerging markets.
The expansion and strengthening of the erstwhile Financial Stability Forum, and now the Financial Stability Board, and the Basel Committee on Banking Supervision was a step in the right direction to address the regulatory aspects. There is a need to carry the process of governance reform of international financial institutions further to give greater voice and representation to under-represented countries.
We would also like to see a strong message to emerge from Pittsburgh against protectionism in all its forms, whether trade in goods, services, investment or financial flows.
The G-20 process is a continuing one and it is in our interest to ensure that it succeeds both in its short term and long term objectives.
During the Summit I look forward to exchanging views on these and other matters with several of the leaders who will be present, including the new Prime Minister of Japan.