labels: World economy
India raps IMF for 'ignoring' global financial crisis news
07 October 2008

Nirpam SenMumbai: The International Monetary Fund and other United Nations affiliated organisations are sitting on the sidelines as the current global financial crisis unfolds, India's permanent representative to the UN Nirupam Sen has said.

During a discussion on the annual report of UN chief Ban Ki-moon, Sen attacked the UN for ignoring the economic crisis that is now "crushing" the poor around the globe and for lacking any vision for the future.

The report, instead of spelling out ways to rebuild the global political and economic institutions, merely highlighted UN work in development, human rights and other areas and its vision for future, he pointed out.

The report also remained silent on intellectual property rights and on ways to revive the stalled Doha Round of world trade talks, he added.

The investment banking world has achieved the destruction of world liquidity, and has increased financial risks and bankruptcies, he said.

''The impact on the developing world would be profound. Projects are already stopping because of the lack of liquidity and financing. The debt crisis would become worse. The decline in commodity prices and exports would hurt the developing world,'' he said.

''The International Monetary Fund has been helpless and practically irrelevant during the crisis, and that irrelevancy could not be addressed until the international community faced its fundamental reform issues, such as transparency and quota reform in the IMF,'' sen added.

Sen called on the IMF to co-ordinate an international response to the global financial crisis in order to aver a recession even as former International Monetary Fund chief Michel Camdessus said a global recession can be avoided with a coordinated plan to restore market confidence.

Camdessus, who as IMF managing director presided over the resolution of the Asian crisis a decade ago, called on world leaders to coordinate their actions to reestablish confidence in international markets.

Camdessus said Asia's growth could still help the world economy expand next year of around three per cent. ''This means the world, thanks to the dynamism of Asia, will avoid recession but you will have a distinct slowdown of world activity," he said.

''We must broaden the competence and jurisdiction of the IMF to the financial transactions instead of keeping it limited to the monetary aspect and to the balance of payments problems," he said on the sidelines of the UN meeting.

''It is just fair also to strengthen the political control of the IMF by the governments (through) a more balanced distribution of power in the executive body - Asia in particular should be better represented," Camdessus added.

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India raps IMF for 'ignoring' global financial crisis