Channelise surpluses for infra in developing nations: Pranab

PRANAB-G20
From Lalit K Jha
Washington (PTI) - Amid recessionary fears in
advanced economies, India's Finance Minister Pranab Mukherjee
has called for channelising global surpluses to build
infrastructure in developing nations to boost world economy.
Insisting that growth process needs to be made more
broad-based and especially strengthened in developing
countries, he said the G20 needs to focus more sharply on the
development aspects.
"If we need to add demand to the global economy to
offset the moderation of demand by industrialised countries as
they contract final output, perhaps a good way of doing this
is to expand infrastructure investment in developing
economies," Mukherjee said.
He was speaking at the G20 Finance Ministers' and
Central Bank Governors' dinner meeting here last evening.
G20 is a grouping of developed and developing nations.
Mukherjee said many emerging economies have developed
the capacity to grow rapidly but are constrained by poor
infrastructure.
"Financing infrastructure development in these economies
could contribute to sustainable global growth," he added.
Talking about the G20 Cannes Summit, the Indian Finance
Minister said that it should focus on medium-term growthPRANAB-G20 2 LAST
"The need for doing so arises because of the highly
interconnected nature of the world and to the potentially
destabilising role that expectations in financial markets can
play," Mukherjee added.
He also called upon the finance ministers of G20 and top
bankers to take stock of the progress made since the Toronto
Summit (2010) when global leaders decided on a series of
measures related to the member countries.
Talking about the difficulties involved in making
forward looking commitments according to the G20 Mutual
Assessment Process (MAP), Mukherjee said, "some commitments
asked for are outcomes over which governments do not have full
control, such as fiscal deficits and current account
imbalances."
Also, countries may be willing to commit "only what they
have already made public so far.
"Are countries in a position to make measurable, forward
looking commitments beyond what is approved by their national
Parliaments?," Mukherjee pointed out.
Taking up another issue related to commitments, he
asked, "is there a danger of such measurable commitments
leading to naming and shaming, that could be acrimonious and
divisive, something that the G20 has so far avoided?"
The G20's MAP is a new approach to policy collaboration,
conceived and owned by the members of the G-20.
The goal is to ensure that collective policy action will
benefit all. Like any new initiative, the MAP will be fully
fleshed out over time, in large part through learning by
doing. "...our medium term action plan for Cannes may not seem
credible unless it addresses short-term growth and stability
concerns as well," he said.
Mukherjee further said that the stress in euro zone and
policy options of handling them should be in the G20
Framework.
"The need for doing so arises because of the highly
interconnected nature of the world and to the potentially
destabilising role that expectations in financial markets can
play," Mukherjee added.
He also called upon the finance ministers of G20 and top
bankers to take stock of the progress made since the Toronto
Summit (2010) when global leaders decided on a series of
measures related to the member countries.
Talking about the difficulties involved in making
forward looking commitments according to the G20 Mutual
Assessment Process (MAP), Mukherjee said, "some commitments
asked for are outcomes over which governments do not have full
control, such as fiscal deficits and current account
imbalances."
Also, countries may be willing to commit "only what they
have already made public so far.
"Are countries in a position to make measurable, forward
looking commitments beyond what is approved by their national
Parliaments?," Mukherjee pointed out.
Taking up another issue related to commitments, he
asked, "is there a danger of such measurable commitments
leading to naming and shaming, that could be acrimonious and
divisive, something that the G20 has so far avoided?"
The G20's MAP is a new approach to policy collaboration,
conceived and owned by the members of the G-20.
The goal is to ensure that collective policy action will
benefit all. Like any new initiative, the MAP will be fully
fleshed out over time, in large part through learning by
doing.