April 15, 2007
India Asks Developed World
to Cut Subsidies to Save Doha
By Arun Kumar
Washington
India has called upon developed countries to take the lead to save
the Doha round of world trade talks by reducing massive
trade-distorting subsidies provided to their agriculture sector.
"It is in everyone's interest to save the Doha Round," Indian
Finance Secretary Ashok Jha told the development committee of World
Bank-International Monetary Fund (IMF) as the group concluded its
two-day spring meetings here Sunday.
The Bank and the Fund should continue to focus their advocacy and
research on highlighting the perils as also the development
potential of trade liberalization, he said noting that a deadline
for delivering on the development promise of the Doha Round had been
missed again.
Developing countries are strongly committed to a rule-based global
trading system and have demonstrated their willingness to be
flexible in arriving at an early positive conclusion of the Doha
Round, Jha said.
It must be recognized that for several of the world's poor,
agriculture is not simply a commercial activity but a way of life
and a means of subsistence, he said. The outcome of the Doha round
has to factor this in and ameliorate the distress of large sections
of the world's poor.
Noting that the pace of global economic growth remained strong
during 2006 and exceeded initial estimates, Jha said among the
emerging markets, China and India continued to contribute
substantially to the growth momentum.
However, the threat of risks lingers and needs to be addressed
through national policy responses and coordinated effort at the
international level, he said. The benign financial conditions that
underpinned global growth may change as evident from the recent
bouts of volatility in the financial markets.
While risks remain, the present favorable global economic conditions
provide an opportunity to developing countries to further strengthen
their policy frameworks, so as to effectively address the many
challenges for achieving the Millennium Development Goals (MDGs),
Jha said.
He noted with happiness that a strong overall per capita GDP growth
of 5.8 percent in developing countries in 2006 mainly supported by
high growth rates in East Asia and South Asia Regions.
While the ultimate responsibility of achieving the MDGs rests with
the developing countries themselves through strengthening policies
and institutions, the role of the donors in enhancing the volume,
quality and predictability of aid and harmonization is equally
important, Jha said.
Donors' action, especially the large ones, appears to be lagging
their commitments of 0.7 percent of gross national income as ODA, he
regretted.
The Bank must also be careful of not being too prescriptive in an
effort to achieve results. The Bank's activities should firmly
reflect a country's priorities as captured in its national plan and
strategy to ensure sustainable development, Jha said.
Keeping in view the Bank's evolving mandate and the need to maintain
its legitimacy in the eyes of its stakeholders, the governance
structures of the World Bank Group need to be reformed, Jha said.
India, he said, would also encourage the Bank to continue its
engagement in dealing with all aspects of corruption including the
role of the private sector and also in strengthening its efforts
towards the restitution of assets.
Given energy financing needs of about $165 billion per annum, India
feels that the Bank's ambition of raising lending to the 1990s level
of $10 billion during FY 2006-08 is too modest.
Finally, apart from financial resources, it is very important for
the Bank to play an active role in promoting the development and
collaborative transfer of new technologies to developing countries,
Jha said.
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