Signalling a victory after two years of hard-fought negotiations, India has finally secured a global recognition – and consequential fund flow in future – at the G20 summit for its urgent need of long-term investment in infrastructure, which in turn will boost India’s sluggish economic growth.
The final G20 declaration, named Los Cabos Growth and job Action Plan, clearly spells this out a day after New Delhi committed $10 billion towards International Monetary Fund for bailing out crisis hit Europe.
“The Los Cabos declaration fully reflects our initiative that investment on infrastructure in developing countries can play a major role in strengthening development and stimulating global recovery,” Prime Minister Manmohan Singh said here reacting to the declaration.
Recognising the “impact of continuing crisis on developing countries”, the leaders promised to create an environment “conducive for development including supporting infrastructure investment.” Though the issue was on the G20 agenda for the last two years, the nod finally came in this picturesque Mexican beach town where leaders representing 80 per cent of global GDP discussed the ongoing economic crisis for two days.
The declaration made it aptly clear that multilateral development banks should be strengthened for this purpose. Once the recognition comes at the highest level, the nuts and bolts of financing mechanism would be decided later.
“We would work with G20 countries to transform their commitment to specific action,” Singh said.
“This is a significant achievement. Now there will be various work streams to take it forward as all countries have attached importance to this need,” said R Gopalan, Secretary in the department of economic affairs who was the Indian Sherpa for financial track for G20 negotiation.
Deputy Chairperson of the Planning Commission and a key negotiator from the Indian side Montek Singh Ahluwalia said infrastructure investment was good for developing countries both in short and long term.
“There is an appreciation in the developed countries that it is a sensitive issue,” he said.
On India’s commitment of $10 billion to IMF that attracted criticism from Opposition leaders back home, Singh said the amount is entirely liquid in the sense that the fund assures the contributors that it would be available whenever needed. Till then it will continue to form part of Indian reserves.