The Hindu : International : We will pursue reforms but with a human face: Chidambaram

Online edition of India's National Newspaper
Sunday, Oct 03, 2004

International

International

We will pursue reforms but with a human face: Chidambaram

By Sridhar Krishnaswami

WASHINGTON, OCT. 2. Although the signs of global recovery have become stronger since the last meeting of the International Monetary and Financial Committee in April 2004 and world economic growth is expected to peak to its highest levels in 30 years, some risks and challenges remain, according to the Union Finance Minister, P. Chidambaram.

"A heartening feature of the recovery is its broad-base across the membership and in an increasingly integrated global economy, such broad-based expansion enables each region to strengthen the prospects of the other," he said in a statement to the IMFC here today.

The risks to the expansion from geo-political and oil market uncertainties have increased in recent months and this cannot be passed off as just supply constraints and demand pressures, Mr. Chidambaram said adding that "...speculative forces may have added volatility and contributed to deviations" from the fundamentals. Any enduring solution will have to be through the strengthening of cooperation between the oil importing and exporting nations to stabilise the market and for international institutions to be ready to help countries that are vulnerable to potential shocks.

Mr. Chidambaram said that along with China and emerging Asia, India "is poised to become a major driver of global growth in the medium term" and has pursued its own design of domestic economic reforms duly incorporating the impact of domestic political cycles."

"The new Government is committed to a determined continuation of reforms but with a human face, involving emphasis on health, education and employment. The Government believes that the key to growth is enhanced investment: public and private, domestic and foreign," he said. The external position has added to the overall confidence, the country's credit standing has improved in international markets and fiscal consolidation remains high on the agenda.

Mr. Chidambaram referred to a number of issues concerning the International Monetary Fund especially as it related to the functioning of the Fund but also in the context of the challenges faced by the developing and emerging market economies. He said the IMF must continue to fund the efforts of its low-income member countries towards poverty reduction and meeting the Millennium Development Goals (MDGs), through advice, capacity building and financing including debt relief.

In fact, in his Statement to the Development Committee (the Joint Ministerial Committee of the Board of Governors of the World Bank and the IMF on the transfer of real resources to Developing Countries), Mr. Chidambaram stressed it was both ironic and unfortunate that at a time when capacity for effective use of aid was increasing, the aid flow was declining in real terms and a substantial stepping up of IDA-14 replenishment and its allocation for targeted achievements of MDGs "will demonstrate the commitment of the international community" to the achievement of global objectives.

"The allocations should be guided by eligibility, need and performance. Any artificial capping of their allocations would significantly undermine the global efforts to achieve the MDGs. The achievements of MDGs cannot be left to the market forces alone. Their achievement will require public investments over long period on a sustained basis," Mr. Chidambaram said.

"...The global community has little to show by way of conversion of the millennium resolve into action. In eleven years that remain to 2015, our destiny is in our hands to shape. If we all act together in tandem, we can reach the goals that we have set ourselves. Achieving these goals are critical not only for the poor and under-privileged, but also for the world as a whole," he reminded the development committee.

Printer friendly page
Send this article to Friends by E-Mail

International

News Update

Stories in this Section

Pakistan mosque blast toll 31

U.S. finds the going tough in Samarra

Israel presses on with Gaza offensive

Musharraf promotes ISI chief

Pakistan not for IAEA access to A.Q. Khan

We will pursue reforms but with a human face: Chidambaram

`Torture, killings at Guantanamo'

Blair `fine'

Outsourcing emerges a key issue

Nigeria militia to disarm

U.S. resolution blames it on Union Carbide

`Scientific partnership with Russia will benefit India'