13 Nov : Acknowledging that the global economic slowdown will adversely affect India, PM Manmohan Singh on Thursday said he would press for a bigger role for developing countries in the international financial management at the G-20 Summit in the US on Saturday.
As he left for Washington, Singh said the "protectionist tendencies" of the developed world needed to end and the international financial bodies like the International Monetary Fund (IMF) and the World Bank strengthened to ensure that the fallout of the global crisis on developing nations is "minimal".
Contending that India, as a major developing economy, has a vital stake in the stability of the international economic and financial system, Singh said he expected the meeting of the important world leaders to come up with corrective measures in the wake of the recent crisis.
He said the slowdown in the international economy would have an adverse impact on India, particularly on exports.
"Because of the slowdown in the developed countries, growth rates in those countries are likely to be adversely affected. That will affect the demand for our exports," Singh said addressing a press conference at the end of the BIMSTEC summit in New Delhi.
"Also, because of the financial crisis, banks and other financial institutions are reluctant to lend money to the developing countries both for investment and for cheap credit," he said.
The Prime Minister said the reluctance of the banks to lend money will "create problems for some of the developing countries in managing their balance of payments and this flow of resources from developed to developing countries gets affected".
That will also "interfere in the effective implementation of the Millennium Development Goals (MDGs)", said Singh who is accompanied by Finance Minister P Chidambaram.
"Therefore, our message to the G-20 will be that they must do everything in their power (to ensure) that the process of development, particularly with regard to the implementation of MDGs by the developing countries, is not adversely affected by the global economic crisis", he further said.
"I will put forward our views on the need for greater inclusivity in the international financial system, the need to ensure that the growth prospects of the developing countries do not suffer, and the need to avoid protectionist tendencies," he said in his departure statement.
Singh, however, said India’s banking sector is safe and there is "no danger" to the country’s financial system as it is "relatively well-regulated".
The meeting of the G20 countries which include US, UK, China, Japan, Australia and India was called by US President George W Bush to discuss issues concerning the global financial crisis which has resulted in failure of many financial entities across US and Europe and has sent the global capital markets tumbling.