Sunday, Sep 29, 2002
Sunday, Sep 29, 2002 |
| International | ||
|
News:
Front Page |
National |
Southern States |
Other States |
International |
Opinion |
Business |
Sport |
Entertainment |
Miscellaneous |
Advts: Classifieds | Employment | Obituary | International
By Sridhar Krishnaswami
In his statement to the International Monetary and Financial Committee here this morning, Mr. Singh argued that constructive involvement of the private sector has helped in ensuring a climate where private investors are better placed to differentiate among countries. "However, such initiatives need to be strengthened further so that they supplement and reinforce national policies in dealing with business cycle fluctuations and financial crisis," the Minister said. In spite of the global slowdown in net capital flows, foreign direct investment flows to the emerging markets continued to grow in the 1990s and even after the 1997 financial crisis but up to 1999. In 2000 and 2002, the FDI flows faltered; but countries with strong economic fundamentals and financial systems have strengthened their self-insurance frameworks. "The loss to global output and welfare resulting from the rush for exit by private creditors apparently neutralises the positive effects of measures to strengthen macroeconomic and financial policies of countries. Under the circumstances, the contribution of external capital to the growth and development of the emerging market economies needs a reassessment," Mr. Singh said. The Finance Minister is here for the Annual Meetings of the World Bank and the International Monetary Fund and is using the occasion to meet with not only his counterparts from major and developing economies but also top officials of the Fund and the Bank. Mr. Singh is also in town at a time when several thousand protestors are trying to disrupt the now truncated proceedings. Till Saturday morning, close to 700 demonstrators were arrested on a variety of charges. In the midst of global downturn, Mr. Singh pointed out that India's GDP continued to grow at an "impressive rate" and the country's recent growth performance remains one of the strongest in the world — the economic environment remains congenial for growth with modest inflation, ample liquidity and soft interest rates, a sound financial system, strong external sector, a record level of foreign exchange reserves and a realistic exchange rate policy. In his statement to the Monetary and Financial Committee, Mr. Singh stressed the fact that the surveillance mechanisms of the Fund had indeed enhanced understanding of the global economy and also providing some early indications of vulnerabilities. "The series of crisis in the emerging markets in the 1990s, however, suggest that, in view of the increasing role of market perception and perception-based actions by private investors in the emerging market crisis, the surveillance mechanisms may have to place greater emphasis on better understanding of financial markets'', Mr. Singh maintained. In paying tribute to the initiative for the Heavily Indebted Poor Countries, the Minister argued that the effectiveness of this initiative is exposed to the downside risks resulting from the global slowdown and falling commodity prices and in the process contributing to the deterioration in the external debt outlook for several of the HIPCs. "...any new debt relief including due to possible enlargement of the scope of the HIPC Initiative must be an additionality to the overall envelope, so as not to adversely impact the resources for concessional finance to other developing countries who have managed their external debt prudently despite difficult circumstances," Mr. Singh remarked. The Finance Minister stressed that India fully supported the process to intensify global efforts for preventing the abuse of the international financial system for money laundering and the financing of terrorism; and that the Prevention of Terrorist Act (POTA) of 2002 provided a comprehensive legal basis for dealing with terrorist activities besides fulfilling India's obligations on complying with the United Nations Security Council Resolution 1373.
Printer friendly
page
News:
Front Page |
National |
Southern States |
Other States |
International |
Opinion |
Business |
Sport |
Entertainment |
Miscellaneous |
|
|
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu
|
