No gain for nations, IMF takes all
Priya Ranjan Dash
April 3: India has nothing much to show as gains from the G-20 summit that concluded here on Thursday. At the same time, the advantage of it having taken the middle-ground is that it has ended up losing nothing.
Asked about what he takes home from the summit, the Prime Minister, Dr Manmohan Singh, said the infusion of $ 1.1 trillion into international financial institutions would lead to needy developing countries getting multilateral assistance.
At the same time, he said India has foreign exchange reserves of over $250 billion and was not a candidate for assistance from the International Monetary Fund, which is supposed to receive $750 billion of that $1.1 trillion cash infusion.
The $250-billion earmarked for trade finance too is for countries that find it hard to pay their import bills without getting suppliers’ credit. India is not among those nations. Then there is another $100 billion for the very poor countries. And India is not one of them. So, India has no share in the pie.
But has it got a greater say in the global economy?
In the talks involving the world’s 20 largest economic powers, there are no clear winners except for international financial institution IMF. While all countries tried to showcase their trophies at the end of the summit, they actually did not get what they were asking for. The Prime Minister, Mr Gordon Brown, of the UK and the US President, Mr Barack Obama, of the US, who were backing the IMF proposal for all countries making strong fiscal stimulus commitments for 2010, did not get an extra dollar in new spending.
They had to content themselves with flaunting an aggregated figure of $5 trillion that all governments had already announced by way of spending plans.
The French President, Mr Nicolas Sarkozy, and the German Chancellor, Ms Angela Merkel did not get to ride their favourite horse of a global regulator for the financial sector.
Mr Sarkozy, however, tried to pass off the setting up of an expanded Financial Surveillance Board and Bassel committee on banking regulations as brownie points from the talks.
The US and the UK were happy that no global regulator was imposed to clamp down on freedom of financial institutions and markets where New York and London dominate. Governments were allowed to retain the regulatory powers.
China, as usual, did not show off its gains, if it had any. It’s proposal for a new global reserve currency to replace the dollar did not find takers. At the same time, it might have had a sense of relief that the financial hubs of Hong Kong and Macao have been spared scrutiny.