India and China gain more clout at G20 conclave

India and China gain more clout at G20 conclave

Grouping calls for tough laws on bank capital and continuing stimulus plans

A draft declaration of the summit said G20 countries had a “responsibility to the community of nations to assure the overall health of global economy” and pledged to secure next year a deal in long-running world trade talks.

In another boost for India and China, the G20 moved close to a deal shifting more voting power at the International Monetary Fund, recognising their growing economic power. The group, which accounts for 90 per cent of world’s economic output, also agreed to rein in financial industry excesses that triggered the credit crisis two years ago, and to tighten rules on how much capital banks must have to absorb losses. The new rules aimed at improving the quality and amount of capital should be ready by the end of 2010 and will be phased in in the following two years, the draft said.

Taking on board the concerns of India and other countries, the G-20 decided to continue the stimulus packages to quicken global economic recovery. The draft declaration is believed to have stressed the need for continuance of the booster dose.

Global economic forum

Establishing the G-20 as premier global economic forum, Obama called on world’s leaders to reform global economic institutions to meet the needs of an interconnected world economy. The global forum is the primary vehicle in the G-20’s effort to promote greater tax transparency, the draft said.

Prime Minister Manmohan Singh has already said the summit should send a strong message against protectionism in all its forms and that it should not be business as usual for countries because the global economy is yet to come out of the woods.Planning Commission Deputy Chairman, Montek Singh Ahluwalia, was India’s pointsman in the negotiations as Singh met world leaders.

The declaration endorses India’s stand for reforms of international financial institutions like the World Bank and International Monetary Fund to reflect ground realities by giving greater say in their affairs for emerging economies.

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