The time has come for the developed world to attend to its own problems, and stop lecturing emerging economies about what is right and what is wrong, Finance Minister Palaniappan Chidambaram said on Monday.
As growth looks sure to slow in much of the rich world, partly due to the fallout from reckless lending in the United States, new economic powerhouses like India say they are tired of being told what to do.
"For too long the advanced economies have told the developing economies that this is right and this is wrong," Chidambaram told Reuters on the sidelines of the annual meetings of the International Monetary Fund and World Bank.
<b1>India has been one of the most vocal emerging countries pushing for changes in the IMF to reflect the rising economic strength of the developing world.
The Indian minister missed out on being elected head of the IMF's steering committee, the International Monetary and Financial Committee, after the job went to a European, Italian Economy Minister Tommaso Padoa-Schioppa. as has almost always been the case.
The selection of Padoa-Schioppa followed quickly on the heels of a decision to give the IMF's top job of managing director to France's Dominique Strauss-Kahn, much to the chagrin of those who say the global lender needs to reflect better the world's changing economic landscape, in which China and India are big players.
Chidambaram said that in future these jobs should be opened to countries beyond Europe.
But his biggest criticism was of financial authorities in developed countries for not keeping up with the new and complex financial market instruments that lay behind recent credit market turmoil.
"Their regulators have fallen behind. They are beginning to rethink their regulatory structure," he said.
"I am told in the UK there is urgent consideration of the fact that response is divided between three separate institutions - the Financial Services Authority, the Bank of England and the government. They want to know where the buck stops," he said.
Britain suffered its first bank run in more than a century last month after mortgage lender Northern Rock fell foul of the global credit crunch, which started as a result from defaults in the US mortgage market but soon spread elsewhere.
"Thanks to the present crisis which originated in the advanced economies. I think developed economies will listen more to the developing economies' point of view," Chidambaram said.
It also showed that India was right to be cautious about opening up its economy and only proceeding once the correct regulations were in place, he said.
"In the name of innovation, regulators or governments in the advanced economies have fallen behind the curve," he said.
"The lesson is that the model we have adopted, cautious calibrated opening of the economy, is perhaps the right model."
"Regulation must stay one step ahead of innovation," he added.