“Balance of power shifting in favour of emerging economies”
BACK FROM THE SUMMIT: Prime Minister Dr. Manmohon Singh addresses journalists on his way back to Delhi on Sunday after attending the G-20 Summit in Washington.On board Air India One: The Summit on Financial Markets and the World Economy offered Prime Minister Manmohan Singh an unusual opportunity to differentiate himself from virtually all the other heads of government of the Group of Twenty who came to Washington at the invitation of lame-duck President George W. Bush.
The nature and context of the meeting enabled Dr. Singh the economist to reach for his professional toolkit, hone his analysis of the origins and nature of the global economic crisis that is deepening by the day, and reveal his thinking on what needed to be done to tackle it. As if reliving his student days at Oxbridge, he even approvingly quoted John Maynard Keynes on speculators being harmless “as bubbles on a steady stream of enterprise” but what happens when “enterprise becomes a bubble on the whirlpool of speculation” and the capital development of a country becomes “the by-product of the activities of a casino.”
Perhaps with the exception of British Prime Minister Gordon Brown, no G-20 leader could speak with the kind of technical expertise that India’s Prime Minister brought to the summit. Certainly Mr. Bush, whom Dr. Singh greatly admires and feels personally close to, did not reveal, in his summing up of the outcome, any expertise either in his diagnosis of the financial crisis or in his review of summit prescriptions.
India’s foreign policy over the past decade as well its rise as an economic power might have distanced it from the so-called third world, and especially from the least developed countries. Nevertheless, the composition of the summit group — in which the developing world is inadequately represented and the least developed countries are completely absent — made Dr. Singh, along with Chinese President Hu Jintao, take on the role of spokesperson for developing countries as a distinct and aggrieved (‘we did not cause the crisis but we are the worst affected’) category.
These aspects became clear from the Prime Minister’s onboard press conference during the Washington-Frankfurt sector of AI-1’s flight back to Delhi, and also from a short text summing up the Prime Minister’s intervention in the summit.
“There is one important significance of the summit,” Dr. Singh told Indian journalists with uncharacteristic forthcomingness. “It is a clear indication that the balance of power is increasingly shifting in favour of the emerging economies. We were, for the last couple of years, being invited to the G8 meetings but consultations were merely for the sake of form. Our views were not really taken into account while they were formulating their viewpoints. For the first time, there was a genuine dialogue between major developed countries and major emerging countries.”
But this was not all. In his onboard press conference, Dr. Singh let on that he had actually anticipated the current economic difficulties. “I don’t take credit but I think Finance Minister Chidambaram and I had anticipated that there was likely to be a global slowdown this year. Therefore, in preparing for the budget for the current year — it appeared that we had taken excessive risk with regard to the budget deficit — we budgeted for a very substantial amount of deficit precisely to take care of the slack that might emerge … So far as India is concerned, the fiscal stimulus is, by and large, already in place.”
In his intervention, Dr. Singh, after providing his analysis of the origins and nature of what is now being described as the greatest financial and economic crisis after the Great Depression of the 1930s, identified “seven big messages emerging from our summit.”
We anticipated global slowdown, our fiscal stimulus is in place: Manmohan
Dr Manmohan Singh the world's leading economist has truly paved India's path towards a developed nation during his tenure as Prime Minister. All are proud of his achievements. One must remember he is not a politician but a technocrat and a true patriot.
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