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Crisis: Developing nations need to work on a solution, says PM

By Anil K Joseph in Tokyo
October 23, 2008 15:31 IST
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Warning that a looming possibility of recession in the global economy threatens to disrupt the rhythm of growth in developing nations, Prime Minister Manmohan Singh said on Thursday they should be made part of an overall financial solution as gains made in the last few years cannot be put at risk.

Noting that the international financial crisis has revealed the extraordinary vulnerability of the global financial system even in the industrialised world, Singh said the world is facing 'multiple challenges' which threaten to squander the gains of developing nations, including India.

"The world is now facing multiple challenges. The spectre of recession in the global economy, coming as it does in the wake of steep rise in energy and food prices, threatens to disrupt the rhythm of economic development in many developing countries," Singh said.

"Developing countries like India are also affected by the crisis and have to be part of the solution. We cannot afford to risk the gains we have made in the last few years. Nor do we wish to remain vulnerable to infirmities in international surveillance, supervision and regulatory mechanisms in the future," he said.

Winding up his visit to Japan, from where he flies to Beijing to attend the Asia-Europe Summit starting on Friday, Singh said the turmoil in international markets has to be prevented from turning into a 'crisis of confidence'.

"The crisis has choked credit flows and predictably spilled over to the stock market. We have to prevent the liquidity crisis from becoming a crisis of confidence in the international monetary and financial system," he said.  

India would be attending the summit, which is set to be dominated by the raging global economic turmoil, at the had of gvernment level for the first time.

On the sidelines of the summit, Singh would have meetings with German Chancellor Angela Merkel, Chinese President Hu Jintao, President of Mongolia Nambaryn Enkhbayar, President of Bulgaria Georgi Parvarov, besides Italian and Vietnamese Prime Ministers Romano Prodi and Nguyen Tan Dung in a bid to promote bilateral ties and exchange views on issues of common concern.

The leaders will focus their discussions on the political, economic, social and cultural issues, including those related to sustainable development.

"It will provide a very good opportunity for us to exchange views on a variety of topics including, of course, the present international financial situation," N Ravi, Secretary (East) of the external affairs ministry said.

ASEM is a grouping of 27 European Union Members, 10 ASEAN members, the three North-East Asian members - China, Japan and South Korea.

The prime minister, who inked a landmark security cooperation agreement with Japan on his visit, said India looked to the 'wise counsel' of Japan in meeting the challenges faced by the world.

"We look to the wise counsel and leadership of Japan to meet the challenges facing the globe," Singh said, adding that New Delhi wished to draw upon Tokyo's vast developmental experience and her traditional emphasis on 'consensus, harmony and balance in solving formidable problems that now threaten global peace and prosperity'.

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Anil K Joseph in Tokyo
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