Political India: Engaging America

From The Hindu

The Group of 20 major economies is assuming more importance than the World Bank and the International Monetary Fund (IMF) “in matters of money and finance,” according to Finance Minister Pranab Mukherjee, who is in the United States for the annual meetings of the multilateral bodies.

At a media interaction here after the meetings, Mr. Mukherjee argued that since nearly 85 per cent of world output came from the G-20 countries “there should be some linkage” between this fact and the governance of global financial market and development finance.

The format of the meetings between the G-20 Finance Ministers and the heads of the World Bank and IMF was undergoing some change. Earlier the IMF Managing Director and the World Bank President would present the views of the two organisations at meetings of the G-20 Finance Ministers and then those presentations would be reflected in the communiqué issued, he noted.

But, Mr. Mukherjee said, “This time it was also suggested that the member-countries of the IMF and the World Bank, who are also members of the G-20, should also get the views of these two organisations in respect of current economic developments, in their presentations before the G-20 Finance Ministers conference.”

In addition to governance issues, he said, the meetings entailed discussions of the Bank's and Fund's annual report. The G-20 Ministers also discussed country quotas at the Bank and Fund although “no solution has been found out but talks are going on,” he observed.

Another key issue that emerged was the fact that the Bank had stretched its resources “almost to the point where, from next year onwards, there may be less lendable resources.” The possible options for augmenting the organisation's lendable resources were also discussed.

In a significant change of format, the speechmaking was also kept to a minimum, the Finance Minister said. While in earlier years members' speeches sometimes lasted two whole days, this year “they had to send their video cassettes, either recorded here or recorded [in their home countries], and that will be put on the website.” As a result, the meeting of the General Body was completed within one hour.

Currency valuation issues “should not” be made a top priority in the G-20 meetings context, he said.

In a response to a question from The Hindu whether there was pressure from the U.S. for India to liberalise the banking and insurance sectors, Mr. Mukherjee said such reform was only being stalled due to the Congress not possessing a majority of 472 seats on the floor of Parliament.

The H1-B visa fee hike issue as well as the U.S.' export controls and its Entities List were still being discussed between New Delhi and Washington, he noted.

Labels: economic recovery, G20 Finance Ministers meet, IMF