Seoul: Prime Minister Manmohan Singh on Friday lashed out at protectionist tendencies even as he walked a tight line on taking a stand in the currency spat between the United States and China.
While Singh endorsed the proposal to rebalance the global economy between countries with surplus and deficits on the current account of the balance of payments, he flagged opposition to the US, albeit subtly. In a veiled reference to the US, preferring to address it as a reserve currency country, that countries need to manage monetary policies better and avoid destabilizing international capital flows.
Addressing the plenary session of the G-20 summit, Singh yet again reiterated the need to protect the global growth process so as to ensure countries such as India stay on course to achieve their development targets.
Singh is already on record earlier claiming that a high growth trajectory is imperative if the government is to meet its development objectives, particularly in pulling nearly 400 million out of the so called below the poverty line (BPL).
Singh who spoke at a time when a consensus seemed elusive made a desperate call to the meeting to salvage a deal from Seoul and argued that focus should be on four broad principles rather than specifics. “We must persevere to develop a workable G-20 mechanism for international coordination.”
According to him, not only should competitive devaluation be avoided at “all costs”, advanced deficit countries need to pursue fiscal consolidation, structural reforms should be undertaken by all countries to improve governance and competitiveness and finally avoid monetary policy that could trigger destabilising capital flows.