At the G20 high table, India plays low key
While global leaders, be it France's Nicolas Sarkozy, China's Hu Jintao or even Germany's Angela Merkel have strong views on the two most critical issues — fiscal stimulus and financial markets' regulation — India's position so far suggests that it will be happy with just about a nicely worded G20 communiqué tomorrow.
The Group of 20 Summit in London is perhaps the last high-decibel overseas engagement of Prime Minister Manmohan Singh, whose government now has less than two months to go, before general elections throw up new possibilities at the Centre. In an interview with the Financial Times, Singh said a fiscal stimulus of 2 per cent of GDP is good enough for developing economies to overcome the crisis.
India seems to be enamoured of the middle path by taking generic positions on protectionism, global regulation, fiscal stimulus and reform of international financial institutions.
This when China put the United States and its strongest ally in Europe, the United Kingdom, on the defensive by letting the governor of the People's Bank of China float a paper suggesting it was time a new global reserve currency replaced the US dollar. Jintao, buoyed by some positive signs in the Chinese economy, told Xinhua yesterday that the stimulus package ($585 billion) had begun to take effect. Confident that China's economy can maintain a steady and rapid growth, he sought "positive" results from the G20 meeting.
Jintao met US President Barack Obama today and had an extensive exchange of views, with the latter accepting the Chinese President's invitation to visit his country in the second half this year. The two also agreed to establish a US-China Strategic and Economic dialogue. China, in fact, expressed its readiness to help top up IMF's resources, but only if its quota is hiked.
India too wants reform of the IMF and the World Bank to "reflect today's economic realities". It wants the quota reviews of the IMF advanced to 2011 from 2013 and seeks a 200 per cent increase. But despite being one of the very few economies that has grown 9 per cent on an average in the last four years and not being as badly affected as many others, it is not quite asserting itself.
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