With an economic contraction looming, Prime Minister Manmohan Singh's trip to Washington DC to attend a global financial summit on November 15 seems a little odd. But when the epicentre of the contraction lies in the credit crisis of the US, that's the only logical destination.
Singh is one of 20 heads of state of the world's wealthiest countries and emerging financial powers — the G20 — getting together to fix their economies. But the Summit on Financial Markets and the World Economy that begins two days later will look beyond financial markets.
“I will put forward our views on the need for greater inclusivity in the international financial system, the need to ensure that the growth prospects of the developing countries do not suffer, and the need to avoid protectionist tendencies,” Singh said in a statement before his departure.
What can one expect from this Summit? "Nothing," said a senior government official working behind the scene.
The best that could happen on November 15 in this meeting where US President George Bush has invited heads of state, finance ministers and top bureaucrats of G20 will be to frame the parameters within which the birth of a new global financial order will take shape.
“The Indian economy, in fact, has the potential to contribute to global economic growth. My participation in the summit demonstrates this changing landscape of the international economy,” Singh said.
All will dwell on the new geo-politics taking shape and engage in a new wrestling match, where the sovereign right to regulate domestic markets will come under pressure from a global necessity to work together — and perhaps accept a global regulator.
Although working on the fringes, India is likely to play a leading role in the finals. Already, ambassadors of at least four countries have written in to work together in what could be known as the Singh-Brown (Gordon) plan. “The summit has an important role to play in considering corrective measures to prevent future recurrence of such events. The issues involved are complex and will require sustained deliberation over a period of time,” Singh said.
The India position is mid-way between the free rein to markets that the US offers and the socialistic calls of French President Nicolas Sarkozy.