P.Chidambaram – They will give greater representation and voice to developing countries … Now whether they will be ready through that I can’t say, they have set the ball rolling now and it would be difficult now to resist any governance reforms on the IMF.(via Moneycontrol >> News >> Economy >> G20 meet sees agreement on common accounting standards: FM)
Describing the G20 summit as “very successful”, Prime Minister Manmohan Singh … said that … There was one important significance which is clear that the balance of power is shifting increasingly in favour of emerging economies,
“We were previously also invited for the past couple of years for the G8 meetings. But consultations were merely for the sake of form. For the first time there was a genuine dialogue between many of the developed countries and the emerging economies,” he said. (via PM terms G20 meet as ‘very successful’)
Note the language …
This is the language of recipients, of pleading and impotence. Chidambaram says that ‘they’ will now “give greater representation and voice to developing countries” Manmohan Singh mirrors the sentiment when he says,”consultations were merely for the sake of form”.
The Developing World FTA
Instead of breaking heads with the WTO, the Developing World should declare a 100 country FTA. As Rajat Nag, of the ADB points out,
“East Asia already trades 55% of its output within the region. India’s trade with China, Japan and ASEAN (Association of Southeast Asian Nations) is increasing. That is the structural shift which will have to happen. Our forecasts are not based on any dramatic shift”
Put the Doha round in deep freeze, and turbo charge work on a FTA within the developing world. That can add another 2%-4% to economic growth – especially to the poorest countries.
The Third Global Reserve Currency
To this add the Third Global Reserve Currency option – and junk the Dollar and the Euro. With this, the World economy will have two strong drivers for economic growth – without dependence on the West. The world needs to move away from the Dollar-Euro duopoly to tri-polar currency regime.
This calls for leadership – intellectual and political. Does the developing world have it? Can India provide it?