Statement by Prime Minister Dr. Manmohan Singh
to the Press at London

02/04/2009

Opening Remarks (Prime Minister):
1. We met in London at a significant moment for the world economy and therefore for the world as a whole. I am grateful to Prime Minister Gordon Brown for the initiative that he has taken to host this second Summit of leaders of the G-20, and for the excellent arrangements that were made for our meetings.

2. The purpose of this Summit meeting was to take forward the search for solutions to the economic crisis facing the global economy today. The world is going though the worst recession since the Great Depression. We have fared much better than others though we are also affected. This is a global crisis requiring global solutions.

3. Earlier today and yesterday evening, we discussed various ways in which the crisis can be addressed. All countries have used monetary policy. An effective fiscal stimulus is also being resorted to by all major economies. There was agreement that credit flows to developing countries also must be restored. There was also agreement that we must tackle the crisis in a way which does not create other problems for the future. For instance, protectionism or restrictions on the free flow of trade and persons would be counter productive. Nor can development be halted or sacrificed in the search for solutions to the financial crisis. Hence the need for special attention to the needs of developing countries.

4. I was happy to note that our views received wide acceptance and support.

 5. We emphasised the need to make good the decline that has taken place in capital flows to developing countries by providing adequate resources to the international financial institutions. I am happy to say that the G-20 have agreed to expand the resources of the IMF and the ADB and to also bring forward the quota review in the IMF. The leaders have also agreed to a fresh issue of SDRs. These are positive decisions. Together they involve a massive provision of $ 1.1 trillion tar emerging market economies. India does not need IMF funding but we have been in favour of expanding IMF resources as this will help developing countries that need assistance. It will restore confidence about emerging markets.

6. We also discussed and agreed on broad direction for improvements in regulatory and supervisory structure for the world’s financial system. These will take time to take effect but they are very important. They will be carried forward by the Financial Stability Forum (FSF) and the Basle Committee on Banking Supervision, the two key standard setting bodies. India is now a member of both bodies. Broadening representation in these bodies is an important improvement. The directions of the reform of financial regulation and supervision that have been agreed are in line with our own thinking in India.

7. This meeting has shown the utility of the G-20 Leaders’ process, and we took forward to the next Summit meeting of G-20 leaders in the second half of the year, and to the early implementation of what has been agreed today. There is a continuing need to redefine the role of our institutions of global economic governance to deal with the problems of today and to reflect contemporary realities.

 8. As you know, I also had an opportunity to meet Prime Minister Gordon Brown yesterday, where we reviewed our bilateral relationship and discussed ways of taking India-UK relations forward. India and the UK enjoy a close partnership in diverse fields of human endeavour. We are determined to and confident of carrying this partnership forward.

9. Earlier this afternoon I met with President Barack Obama of the United States of America. This was our first meeting and was marked by exceptional warmth and cordiality. We reviewed our bilateral relations. I thanked President Obama for all that he has done in the US Senate and outside in the past few years to make possible the transformation of India-US relations, and to bring to fruition our civil nuclear initiative. Today we discussed several positive and constructive steps to take the India-US global partnership forward.

10. We discussed regional and global issues, including the threat that terrorism emanating from our nei9hbourhood poses to all free societies, and the international efforts that are required to deal with this problem. We had a significant convergence of views and approaches in this regard. President Obama informed me of the new comprehensive US strategy for Afghanistan and Pakistan. I welcomed his clear enunciation of the problems and the goals. India will continue to play a constructive role, working to build peace and stability in our periphery.

11. I leave London satisfied that my bilateral and other meetings have been productive and useful, and that the 0-20 Leaders Summit has shown a way forward. The process of overcoming the global crisis will not be easy. Given the goodwill and the meeting of minds among leaders that was possible in London over the last two days, the world has a basis to begin solving the crisis. The international community can and must work together to do so.

Interaction with the media

Question: (inaudible)…………….

Prime Minister (Dr. Manmohan Singh):..(inaudible) will make a substantial difference to the outcome of economic development in the next two or three years.

I should also mention that in addition to attending G-20 meeting I had a very good meeting with Prime Minister Gordon Brown. On the sidelines I had very good meetings with President Hu Jintao, President Medvedev of Russia, His Majesty the King of Saudi Arabia, the Prime Minister of Japan, and several other world leaders. I benefited enormously from exchanges with my colleagues represented on the Committee of 20. And I have just had a very useful, productive meeting with President Obama in which we discussed the development of our relations bilaterally, how can the problems of our region be resolved through cooperative interaction between our two countries, how can the global issues like energy security, like climate change, can be dealt with by India and the United States working together. So, I go back home very satisfied with the outcome both of the Summit and my meetings with world leaders, particularly President Barak Obama.

Question (Shrinjoy Choudhuri, Times Now): Sir, you just said you met President Obama. Did the issue of Afghan and Pakistan come up? And have you got any indication from the United States that they are willing to put pressure on Pakistan on checking terror and also on Mumbai?

Prime Minister: We did discuss the developments in Afghanistan and Pakistan. We both agreed that our two countries must work together to counter the forces of terror.

Question (Natasha Bretton, Dow Jones): There has been lots of discussion (inaudible) Would India consider..?

Prime Minister: A little louder. I am not able to hear that.

Question (Natasha Bretton, Dow Jones): I would like to ask whether India, like Mexico indicated last week, …could be interested in making use of the new IMF credit line? And also you said many countries will … of resources. I wanted to ask what India’s contribution would be to that. Thank you very much.

Prime Minister: As far as India’s contribution is concerned, the question arises that we should contribute. We can consider contribution in proportion to our quotas in the IMF. As far as drawl by Mexico is concerned, we are happy that conditions have been relaxed so that Mexico has found it possible to borrow about 47 billion dollars. It augurs well I think. In the past, the high conditionality attaching to IMF loan was one of the factors which deterred developing countries. And since then the IMF has realized that it needs to do something to soften terms and conditions. That Mexico is the first recipient of the loan under the new facilities is a welcome development. It sets a precedent. As far as India is concerned, India has no intention of going to the IMF. Our reserves are about 250 billion dollars. We do not visualize that there is going to be a need in the near future for India to go to the IMF.

Question (Sachidananda Murthy, Malayala Manorama): Sir, a quick read of the communiqué issued by G-20 has two or three areas of concern for India. I would like you to clarify on them. One is that article 12 of the communiqué says that all countries and their economies would be under the surveillance of IMF. What kind of surveillance? You know how sensitive IMF conditions and others of India. The second concern is regarding that there will be an early conclusion of the Doha Round of talks. So, will there be more pressure on India because India has taken a tough position? And the third concern, Sir, …

Prime Minister: Let me answer one at a time. I cannot handle three questions. Could you repeat the first question?

Question (Sachidananda Murthy, Malayala Manorama): Sir, article 12 of the communiqué says that all countries and their economies would be under the surveillance of the IMF. The word used is surveillance.

Prime Minister: Let me say that as far as the developing countries are concerned there has already been, all these years, excessive surveillance of the developing countries’ economies. The real imbalance in the functioning of the IMF has been that there has been too little surveillance of the affairs of the developed countries. I see this statement as a statement which will induce the IMF to an even-handed approach towards surveillance because we all know that the present crisis does not originate in the periphery, in Asia or in Latin America. It originates in the heart of capitalism and it is the laxity of regulation and nobody pointed it out earlier. So, part of the blame must be shared by the IMF.

Question (N. Ravi, The Hindu): Mr. Prime Minister, after your meeting with President Obama what is the sense that you came away with on the direction in which Indua-US relations broadly?

Prime Minister: We have a global strategic partnership with the United States. What President Obama and I have discussed is that we both are agreed that there are enormous opportunities to further strengthen our relationship to make this partnership more productive, more durable in diverse fields.

Question (Iftekhar Qaiser, Geo TV): Are you willing to start dialogue on Kashmir with Pakistan? And are you satisfied on the investigations which are taking place in Pakistan regarding Mumbai attacks?

Prime Minister: Let me say that we expect Pakistan to do all that is required to bring the culprits of Mumbai terror attack to book. We have supplied Pakistan answers all the questions that they raised. Now the ball is in the court of Pakistan. It has to convince us that it is absolutely sincere in bringing to book the culprits of the attack on Mumbai. As far as Kashmir is concerned, we have always said that we are willing to discuss bilaterally all outstanding issues which have bedeviled the relationship of our two countries. But let me say that these relations or these discussions cannot proceed if hundreds of people, as happened in Mumbai, are being killed. Therefore, Pakistan has the opportunity to assure the world that it is absolutely sincere in its statements that the territory of Pakistan will not be used to promote acts of terror directed against India. This is a minimum precondition for any discussions between India and Pakistan.

Question (Smita Prakash, ANI): Mr. Prime Minister, you are heading towards the end of your first term as Prime Minister. What would you say is your legacy. Mr. Obama just a few minutes back said it was unleashing India’s economic power. What would you say are the milestones of your first term? Also, Sir, what were the challenging moments? Anything you would have done differently?

Prime Minister: Our biggest achievement has been to get the economy moving forward at the rate of nine to ten per cent per annum. As I mentioned to President Obama, our biggest challenge is to get rid of chronic poverty, ignorance and disease, which still afflict millions and millions of our citizens. And we need a very high rate of growth which is an essential condition, though not a sufficient condition, of getting rid of poverty. Therefore, I take some credit for the fact that for nearly five years the average growth rate of the economy has been 8.6 per cent. We have also made every effort to make this growth process more inclusive to ensure that our farmers benefit, that our agricultural workers benefit, the employment guarantee programme, the investments that we have made in the farm sector, the Bharat Nirman programme, the food security mission that we have launched, and the Jawaharlal Nehru Urban Renewal Mission to improve living conditions in metropolitan areas including slum-dwellers, the National Rural Health Mission today under which six lakh mahila workers are working in our villages as Accredited Social Health Workers. So, I think these are some of the achievements of our Government. But I would be the last one to say that we have achieved. There are lots of things we would have liked to accomplish. But there are compulsions.

Question (Shigeki Tosa, Ashai Shimun): Thank you, Prime Minister. Some are saying that this meeting shows the end of the G-8 era and the beginning of the G-20 as the most important forum to discuss the international issues. Would you agree with this? And would you hope that this forum can meet regularly and become an institution to replace the G-8?

Prime Minister: It depends on what this forum actually achieves. This was the second meeting. There will be a third meeting though the dates and the time has not been specified. If the Group of 20 can find credible answers to the major global issues, it would certainly carve out for itself a place of honour. I sincerely hope that the way the first two meetings have gone, there is a lot of hope that the Committee of 20 consisting of people from different parts of the world – Russia is there, China is there, Europe is there, major developing countries are there – I think that is a unique combination. If it succeeds in dealing with the global problems in a cooperative manner, I think it would have served its purpose.

Question (Gautam, The Hindustan Times): Sir, you were among the first to flag the issue of protectionism at the Washington Summit. Now also in the statement we see that countries are being encouraged to fight protectionism. But there is the strange line here which says that we extend this pledge to the end of 2010. So, are you saying the end of protectionism will end at 2010 and we can go back to our old ways after that?

Prime Minister: No, these are emergency measures. The hope is that by 2010 the world economy would revive, in which case the normal WTO guidelines would become operative.

Question (Gurdeep Singh, UNI): Apart from being brought on the Basel Committee and the Financial Stability Forum, what do you see are the other gains of the G-20 Conference to India?

Prime Minister: The fact that India is now accepted as a major player on the world economic scene itself is a great achievement. And the fact that the developing countries are going to benefit by increased resource flows of 1.1 trillion dollars, we will also benefit because we have trade relations with these countries, and if their economies flourish, it will also spillover into some good for our economy as well. We have a vested interest in the world economy doing well because that is a precondition for our exports flourishing.

Question (Shivnath, NDTV): Dr. Singh, looking at the issue of representation within the IMF and communiqué talking about greater transparency, by when do you see the fact that emerging countries like India would have a say, because there was a lot of talk about China in the statement? One is that. Secondly, the way the Summit has talked about solutions and a roadmap, how soon in your assessment as an economist do you think things will start falling into place, because people have started writing off 2010 as well?

Prime Minister: As of now there is agreement only to increase quotas, to undertake a review of quotas. As far as rebalancing of quotas is concerned, I think it is not still on the cards even though there was a demand by developing countries including myself that the Summit should endorse rebalancing of quotas in the IMF which would have recommend the rebalance of the power structures. Quite frankly, I cannot say today that we have as of now an agreement to rebalance the quotas in the IMF. But I have every reason to hope that there is a paragraph in the Summit in which the Chairman has been asked to talk to various members, various Finance Ministers, to come up with new innovative ideas about a long-term reform of the international financial institutions. I do hope that when the Chairman reports on that subject this particular issue will figure as one of the items.

Question (Vaidyanathan, Indian Express): Sir, one thing when you look at the entire text of the G-20 leaders’ statement, one or two things which kind of puzzle me are the WTO Director-General saying that all the infringements which 17 countries out of 20 members have done are well within the means, which means that protectionism is not really high on the agenda, which Mr. Brown also talked about in the press conference today. And the other was, about this global stimulus package, a coordinated effort to fiscal stimulus. Yes, we have 1.1 trillion dollars coming into the global economy. But how much of it is all developed and developing countries pushing their economy together?

Prime Minister: That only time can tell. But you have for the first time a statement by the major powers of the world that they recognize that they have a cooperative responsibility to put their shoulders together to revive the world economy. As far as protection is concerned, I think it is a fact. Although 17 out of 20 countries had I think infringed the Washington communiqué, the WTO itself has said the amounts involved are not very large. So, therefore, the problem still can be contained if there is a determination to do so. And the Summit has endorsed that protectionism is bad and I do hope that it would have a salutary effect. From our point of view we have highlighted that protectionism is not mainly protection of goods, but protectionism of services, protectionism in financial services is also something which is worrisome. I think that has also to be attended to. We know for example that many of the banks in the developed countries who have received help from their governments to solve their problems are not lending to developing countries. That is also protectionism. We also know that some branches of the foreign banks in our country have stopped lending to Indian entities. That also is protectionism. So, I hope that protectionism of all sorts will I think be looked down upon by the world community.

Question (Devender Malik, All India Radio): Sir, during your first meeting with the US President Obama, was the issue of H1B visas discussed as far as the Indians in US are concerned?

Prime Minister: I raised the issue of protectionism in general. I did not go specifically into H1B visas. But I did raise the issue of protectionism. And both of us agreed that everything in our power has to be done to roll back protectionism.

Question (Pawan Kumar, Zee TV): The issue of tax havens has been has been discussed at length over here. Recently, Mr. Lal Krishna Advani raised the point of black money. Have you discussed with any of the leaders here in general or particularly with the European countries on something like that?

Prime Minister: Yes, if you look at the communiqué there is an explicit reference to tax havens and also that information with regard to tax matters should become available. I think that is the direction in which we should move. If information relating to tax matters becomes available to all governments I think the problems that have arisen with regard to tax havens would disappear.

Question (V.S. Arun, Deccan Herald): Sir, in your speech last night you had expressed fears that if measures are not taken immediately, recovery even by 2010 would be difficult. Now, with today’s statement are you hopeful that these fears have receded?

Prime Minister: I am certainly more hopeful now than I was yesterday. Yesterday if you had looked at the newspapers you would have noticed people were highlighting the divergence in the viewpoints of the French, the Germans, the Anglo-Saxons. Fortunately I think those differences did not surface and the Committee as a whole has endorsed the package. I think that augurs well for the future recovery of the world economy.

Question (Sushil Choudhury, Dainik Ganadoot): Sir, what is the main and important contribution for G-20 Summit from India?

Prime Minister: I think we are part of the 20 countries, we have made important contribution. Our concern was that the developing countries’ problems should not be lost sight of, that the resource flows which have declined should be made good by increased multilateral flows. And that is why our enphasis on increasing the resources of the IMF, increase in the allocation of the SDRs, increased resource flows becoming available from the World Bank, increase in quota of the Asian Development Bank of which we will be direct beneficiaries. So, all these measures are I think are a result of efforts we have made. I am not saying we were the only one. I think many other developing countries felt alike and the fact that the developing countries felt strongly I think we were able to get an endorsement of resource flows of 1.1 trillion dollars to the developing countries through multilateral development institutions including the IMF.

Question (Jayant Ghoshal, Ananda Bazar Patrika):, Yesterday we got copy of your speech at the dinner. And today we got the copy of the Joint Communique. I found lot of strong similarities between these two. What you said yesterday on protectionism, on the role of IMF, even this surveillance issue also you have mentioned, monitoring and the relevance of global regulation. In the Joint Communique, I found a follow-up of your yesterday’s speech. Can I interpret it in that way that economist Manmohan Singhji influenced the draft of the communiqué today?

Prime Minister: I think I will put it differently. I will say, all right-thinking men think alike when dealing with global issues of great seriousness as the revival of the world economy.

Question (Jayant Ghoshal, Ananda Pazar Patrika): … have given in a speech today and yesterday you have said all these things.

Prime Minister: Because I was given the chance last night by Prime Minister Gordon Brown, first President Obama spoke, then he asked me to speak. The agreement was that if you speak at the dinner, you will not speak in the Plenary. So, I got a chance to speak early enough and I thought I should have my say so that it could reach the gentlemen of the press in time.

Question (Shamsul Haq, Frankfurt Newspaper): Main aakhri question hindi mein poochunga, Sir. Main yeh poochhna chaah raha tha ki aanewaale jo election hai us mein aap ki party ka kya mustakbil hai, aur kya India mein election saaf suthri honge? Ye do question ki jawab deejiyega.

Prime Minister: Elections saaf-suthre honge iski guarantee de sakta hoon. Aur mujhe is baat ka bhi yakeen hai ki aanewale elections mein Congress party ek baar phir number-one party ban kar saamne aayegi.

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