Prime Minister Manmohan Singh today used the forum of the Seventh Asia Europe Meeting (ASEM-7) to concede for the first time that the international financial crisis was beginning to have a grave impact on India for no fault of its own. “Our stock markets and the exchange rate of the rupee are under pressure due to capital outflow of foreign institutional investors. Sooner or later, the real economy is bound to experience the pain,” he said.
He put on his professorial hat to tell Asian and European leaders that a “collective international effort” to the international financial crisis must involve infrastructure investments in developing countries as a “counter-cyclical device” as well as the creation of a “global monitoring authority to promote global supervision” of cross-border investment, trade and banking.
In candid and even hard-hitting remarks to the first closed session of the Asia-Europe Meeting summit which got under way here on Friday, Dr. Singh said globalisation without the structure of global financial governance had led to severe problems. “Clearly there has been a massive failure of regulatory and supervisory powers. Speculators have had a free run for far too long a period,” he said. “International institutions like the IMF have also not covered themselves with glory. There has been an unacceptable failure of effective multilateral supervision of major developed economies and in particular of what has been going on in their financial markets.”
Source - The Hindu, The Telegraph
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