World economy still not out of the woods: PM

Sending a strong message ahead of the G-20 Summit in the US, Prime Minister Manmohan Singh on Wednesday sought greater voice for developing countries in international financial institutions, saying the global economy is still not out of the woods.

World economy still not out of the woods: PM

In a departure statement before leaving for Pittsburgh, Singh said it was necessary for India to engage in the management of the world economy because we have a lot at stake, and a lot to contribute.

Singh, who will be meeting world leaders including the new Japanese Prime Minister Yukio Hatoyama, emphasised the need to carry the process of reform of international financial institutions further to give greater voice and representation to under-represented countries.

India, he said, would also like to see a strong message to emerge from Pittsburgh against protectionism in all its forms, whether trade in goods, services, investment or financial flows. Noting that the global economy and financial markets have shown a distinct improvement, Singh, however, cautioned, "We are still not out of the woods."

The Prime Minister said he would convey India's interest in seeing the earliest possible return to trend growth and stabilisation of the banking and financial sectors in the advanced economies, because this directly affects its exports, capital inflows and investment.

"We would like to see a continuous increase in the capital base of multilateral development banks to finance the massive infrastructure needs of emerging markets," he said.

Accompanied by Planning Commission Deputy Chairman Montek Singh Ahluwalia and National Security Adviser MK Narayanan among others, the Prime Minister will attend the summit hosted by President Barack Obama on September 24-25.

Heads of governments of G-8 countries along with those of emerging economies like India, Brazil and South Africa representing 90 per cent of the global GDP, 80 per cent of world trade and two-thirds of humanity will discuss how to expedite the revival process.

The summit, third of its kind since the financial crisis began last September, will review implementation of the measures decided at the previous summits - Washington (2008) and London (April, 2009).

Though the summit is not a negotiating forum, the issue of climate change is expected to figure in a big way among the leaders as nations prepare themselves for the Copenhagen Summit sponsored by the UN in December this year.

Singh said the summit reflected the seriousness which the G-20 countries attach not just to the recovery of the global economy and financial system, but to a recovery that is coordinated, sustainable and enduring.

The summits in Washington and London were convened at the height of the global economic crisis, and, therefore, focused on the urgent and the immediate, he said.

The London Summit resulted in ambitious liquidity stimulus measures and growth packages. Importantly, it pledged to mobilise $1.1 trillion of resources for international financial institutions, largely to sustain growth in emerging markets, he said.

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