Statement by India at the 59th Session of UNCTAD Trade and Development Board, Agenda Item 4: Interdependence: Coordinating stimulus for global growth, delivered by Shri Dilip Sinha, Permanent Representative, on September 18, 2012, Geneva
On behalf of the delegation of India, I wish to join other members in congratulating you, Mr. President ( ) on your election to the Presidency of the Board. My delegation associates itself with the statements made by the G-77 Chair, Indonesia, and the Asian Group Coordinator, Iran.
This session assumes importance as it is the first annual session after the successful conclusion of UNCTAD XIII. I would like to congratulate the Secretary General for a comprehensive and analytical ‘Trade and Development Report 1981-2011’ covering a period of past three decades, and the latest ‘Trade and Development Report 2012’, which are based on in-depth research that is the hallmark of UNCTAD.
The topic of discussion today, ‘Interdependence: Coordinating stimulus for global growth’, is very timely and relevant for all of us. Interdependence-christened globalization – represents the salient feature of today’s world that has profoundly impacted the economic and social aspects of our life.
Till a few years ago the world had taken for granted the benefits of globalization and global interdependence. Today, as we enjoy its fruits, we have also to cope with the full gamut of its impact, some of which has been negative, especially for the vulnerable economies and the weaker sections of society.
The TDR notes the positive impact of the stimulus measures provided by the governments of all the major economies in response to the economic crisis until the first half of 2009. But lately, the asymmetry in the policy approaches of the developed and developing countries in providing general stimulus measures to sustain a global recovery may delay the rapid recovery of the global growth.
This brings us to the contentious issue of the relationship between austerity and growth. It has been argued that austerity now will lay the basis for sustained growth later. But there is also an alternative view that with growth impulses seriously weakened as they are today, synchronized austerity across many countries may actually accentuate the current crisis.
These divergent views underscore the complexity of the challenges we face today and the need for sound policy responses. We should not allow the global economic slowdown to become an excuse for promoting protectionism or erecting barriers to movement of people, services and capital. We need greater coordination of macroeconomic policies of major economies. The benefits of globalisation have to be preserved and the weaknesses that have led to the current crisis need to be addressed. Developing countries need a rule-based, stable and predictable global order which gives them the policy space and time to develop.
The gaps in the international financial architecture that allow the recurrence of crises stare us in the face today. These crises have global ramifications and underscore the need for collective action. The reform of governance systems of international financial institutions ought to be pursued with speed and efficiency.
Thank you, Mr. Chairman.