United Nations, June 26 (Inditop.com) Warning against protectionist tendencies to address the global economic crisis, India has said that while it has fared much better than others, developing countries must get space to continue
To grow.
“We have a vested interest in the world economy doing well as that is a key enabler for our growth too,” Minister of State for External Affairs Preneet Kaur said Thursday at the UN Conference on World Financial and Economic
Crisis and its Impact on Development.
“India has actively engaged in the G-20 framework aimed at redressing the current global economic situation so as to bring the global economy back to the trajectory of sustained growth,” she said.
“But as we strive for global solutions to this global crisis, we must remember that development or economic growth cannot be slowed, halted or sacrificed in the search for solutions to the crisis,” Kaur said.
“Developing countries have limited policy space. They must continue to have this space to determine measures that best fit their specific requirements,” Kaur said.
“Insofar as India is concerned, we have fared much better than others though we are also affected and our growth rates have come down from the nearly 9 percent average of the past four years to 6.7 percent in 2008-09.”
“In response to the crisis, we have made aggressive use of fiscal and monetary policy, with particular focus on fiscal stimulus in infrastructure investment,” she said.
Warning against protectionist tendencies, Kaur said: “Measures to address the crisis should not create other problems for the future.”
“It is particularly necessary that we should not permit protectionist tendencies, not just protectionism of trade in goods, but also protectionism in free flow of persons, protectionism in financial services as well as imposition of non-tariff barriers, to succeed in our response measures.”
To address regulatory and systemic flaws, Kaur said: “There should be better and transparent regulatory mechanism for capital markets, including the non-banking sector, redefine capital requirements to avoid pro-cyclicality,
and avoid build-up of excessive leverage.
“There should be a better system of surveillance and regulation.
Surveillance should be even-handed with greater focus on the systemically important institutions.” She said. “We also need to develop an effective early warning system to spot a build-up of risk.”
