Prime Minister Manmohan Singh arrived in this north-western city of Russia Wednesday to join other leaders at the 8th G20 Summit and find ways to tackle the challenges faced by the global economy, especially the turmoil in currency markets, and ask rich nations not to pursue policies that harm the growth prospects of emerging economies.
Apart from attending the summit and holding bilateral talks, the prime minister during the visit will also avail an opportunity to meet with leaders from Brazil, Russia, China and South Africa, which collectively form the BRICS grouping.
The prime minister returns to New Delhi Saturday.
Among the bilateral meetings, officials confirmed one with French President Francois Hollande Friday and said others — which may be in the nature of a structured talks or a pull aside — were being worked out.
Ahead of the summit, the prime minister said rich nations, which are showing signs of recovery, must not pursue policies that hurt the growth prospects of emerging economies and that the collective focus must be on job creation and investment promotion in a bid to spur growth and sustain it.
“Though there are encouraging signs of growth in industrialised countries, there is also a slowdown in emerging economies, which are facing the adverse impact of significant capital outflows,” he said.
“I will emphasise in St. Petersburg the need for an orderly exit from the unconventional monetary policies being pursued by the developed world for the last few years, so as to avoid damaging the growth prospects of the developing world,” he added.
“It is also important that G20 encourages and promotes policy coordination among major economies in a manner that provides for a broad-based and sustained global economic recovery and growth.”
He was alluding to the talks of US Federal Reserve looking at successively reducing the fiscal stimulus that was being injected since 2008 to overcome the financial crisis.
This and other reasons have led to the Indian rupee dipping to a historic low of 68 to a dollar. This apart, India’s quarterly economic growth is also at four-year low and stock markets have taken a hit, among other gloomy signs.
On its part, the prime minister said, India has taken steps to pursue reforms, create a more investment-friendly environment, stabilise the rupee and strengthen macro-economic stability.
“At the same time, a stable and supportive external economic environment is also required to revive economic growth,” he said.
“The G20 Summit, therefore, is an important forum to seek an international climate that is beneficial for all countries.”
The main theme of the 8th G20 Summit is starting a new cycle of growth through quality jobs and investment, trust and transparency and effective regulation. The past summits were held in Washington, London, Pittsburgh, Toronto, Seoul, Cannes and Los Cabos.
Besides India, the G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the EU.
Originally formed at the level of finance ministers and central bank governors in 1999 after the East Asian economic crisis, the G20 assumed significance after its elevation to a summit-level forum in 2008, following the global financial crisis.
(Arvind Padmanabhan can be contacted at firstname.lastname@example.org)