Rome: Prime Minister Manmohan Singh is expected to push for an overhaul of international organizations and financial institutions when he meets leaders of the Group of Eight (G-8) industrial nations in L’Aquila, Italy.
Singh, who earlier said that deficiencies of the existing system of governance have been “dramatically brought home during the recent global financial and economic crisis,” is likely to call for a bigger role for developing countries in the working of institutions such as the World Bank and International Monetary Fund.
“It (the economic crisis) has forcefully exposed fundamental weaknesses in the approach to financial regulation, which emphasized light regulation and greater reliance on in-house controls and market discipline to control risk,” Singh said in an article for a book which is to be brought out by the G-8 summit organizers.
“The matter (restructuring of institutions) will be discussed at the G-5 working group meeting and at the G-5 nation leaders’ dinner on Wednesday,” said an official accompanying the Prime Minister.
“It will also come up in the meeting between the G-8 and the G-5. It will be followed up in the G-20 meeting in September,” the official said, requesting anonymity.
The G-5 includes India, Brazil, China, Mexico and South Africa. The G-8 comprises the US, the UK, France, Germany, Italy, Japan, Russia and Canada. The G-20 includes industrialized and developing nations.
The Indian Prime Minister has also questioned the present structure of the United Nations Security Council, which gives veto powers only to the five permanent members. India has called for a reform of the Security Council and a permanent seat in the council for itself.
While Singh welcomed the decision to convene the G-20 leaders’ summit in April in London to review the economic crisis, he said the meeting did not achieve any significant reform of the international financial institutions.
He also said the selection of countries in the group remains “arbitrary and can be questioned as to its representativeness.”
Some world leaders have suggested that the G-8 summit in Italy should consider how to reduce the over-representation of the European nations in the voting structure of the IMF.
“This is the major obstacle to giving a bigger role to developing countries in these institutions. India will also press for changes in it,” the official quoted earlier said.
At the G-8 summit, India will express its concerns over “linking the climate change to trade”, the official said. “The G-8 countries are expected to express their political will to resume Doha Round of trade talks.”
The official, however, said it was unlikely that the US would press for resumption of World Trade Organization talks.
“The US does not have a mechanism in place now to continue the talks. It is unlikely that the (US) President (Barack Obama) goes to the Congress seeking green signal for resuming talks on free trade when the world is facing job retrenchments,” the official added.