Ministry of External Affairs Government of India

Official Spokesperson (Shri Vishnu Prakash): Good evening. Prime Minister of India Dr. Manmohan Singh is leaving tomorrow for Seoul for the 5th G20 Summit meeting. Foreign Secretary Shrimati Nirupama Rao would like to brief you about the visit of the Prime Minister. I would also like to introduce my colleague Mr. Jawed Ashraf, Joint Secretary (Americas), who is to the right of Foreign Secretary. Foreign Secretary would be making an opening statement and thereafter will be taking a few questions on the visit of the Prime Minister to Seoul. Ma'am, the floor is yours.

Foreign Secretary (Shrimati Nirupama Rao): Thank you, Vishnu.

The fifth G-20 Summit is being held on November 11-12, 2010 in Seoul, Republic of Korea. This is an unprecedented fifth Summit for a multilateral grouping within a span of two years, starting with the Washington Summit (Nov. 2008) through London (April 2009), Pittsburgh (Sept. 2009) and Toronto (June 2010) to the Seoul Summit later this week. This is indicative of the importance, dynamism and credibility of the G-20 as a grouping, which since the Pittsburgh Summit has been designated as the ‘premier forum' for international economic cooperation. We also value the G-20 as the principal platform for North-South dialogue with our developed country interlocutors.

As you are aware, the G-20 came into being in 1999 following the East Asian financial crisis. It is an informal forum comprising major developed countries and leading emerging market economies representing around 90% of global GDP, 85% of the world trade and two-thirds of humanity. It has achieved credibility for having been able to address the international financial and economic crisis or ‘the Great Recession' of 2008 in a concerted, coordinated and effective manner. As the host, the President of the Republic of Korea will preside over the Summit. Leaders of G-20 member countries are expected to attend. RoK as host has also invited Leaders from Spain, Malawi (Chair of African Union), Ethiopia (Chair of NEPAD), Vietnam (Chair of ASEAN) and Singapore. In addition, top officials from the United Nations, the World Bank, IMF, WTO, Financial Stability Board, etc. are likely to be present.

Prime Minister will be participating in the G-20 Seoul Summit. PM's delegation will include Deputy Chairman Planning Commission, who is India's ‘Sherpa' for the G-20, the National Security Adviser and senior officials.PM will be arriving in Seoul late on November 10 and has a busy schedule over the next couple of days. The G-20 Summit starts on November 11 with a Welcome Reception followed by a Working Dinner by the President of the Republic of Korea. On November 12, the programme includes the Summit Opening Plenary Session, followed by Plenary Working Sessions in the morning and afternoon, a G-20 ‘Family Photograph', a Leaders' Working lunch and concludes in the afternoon with the Final Plenary Session. After the conclusion of the Summit, PM will return to India on the same day.

PM will interact with the Leaders of participating countries on a range of bilateral, regional and global issues of mutual interest. Some bilateral meetings are also envisaged on the sidelines of the Summit, most probably on Nov. 11, and we will keep you informed.

The forthcoming Seoul Summit's theme is ‘Shared Growth Beyond Crisis'. The Leaders are expected to review the global economic situation, the status of the world recovery as well as the progress of implementation regarding the past G-20 Summit decisions. In the light of the above, the Leaders will decide on the future mandate and direction of G-20. Without trying to speculate about the deliberations at the Summit, broadly speaking some of the areas the Leaders can be expected to address are:

• Global Economy and Framework for Strong, Sustainable and Balanced Growth
• International Financial Institution (IFI) Reforms
• Financial Regulatory Reforms
• Trade and Protectionism
• Climate Change
• Development, which is a new issue on the G-20 agenda mandated at the last Toronto Summit.

As per past practice, a Declaration or Communiqué of the Seoul Summit is envisaged. I would, however, refrain from trying to prejudge the outcome of the Summit or the contents of the Communiqué. But as I have mentioned, the Seoul Summit has a rich and diverse agenda for discussion by Leaders.

Host RoK is also organising a major Business Summit as a side-event in conjunction with the G-20 Summit. The Seoul G-20 Business Summit (SGBS) will be held on November 10-11, 2010 at which around a 100 CEOs from G-20 member countries and beyond are expected to attend. The SGBS theme is ‘Role of Business in Sustainable and Balanced Growth'. The Business Summit will have Round Tables on (i) Revitalising trade and foreign direct investment, (ii) Enhancing financial stability and supporting economic activity, (iii) Harmonising green growth, and (iv) Delivering on the corporate social responsibility promise. The outcome of the Business Summit will also be presented to the G-20 Leaders.

Question: Madam, yesterday the Prime Minister actually spoke about a new kind of agenda being set with regard to the global economy with developed nations perhaps being asked to fund infrastructure development in the developing world. Is the Prime Minister's statement just sort of an offhand comment or is it indicative of something that India is likely to pursue at the Summit?

Foreign Secretary: The agenda for strong, sustainable and balanced growth, which is a theme which has been picked up by the G20 is definitely very high on the agenda. When India talks of this issue, need for strong, sustained and balanced growth, it is essentially representing the emerging economies, it is speaking as the voice of one of the leading emerging economies in the G20. Of course there will be consultations with the other G20 emerging economies. In fact one of the pull-asides, bilaterals that is envisaged is a meeting between PM and the Brazilian Head of delegation. What we were talking about when we speak of balanced growth is that there are multiple rates of growth today in the world economy. On the one hand there is need for fiscal consolidation in some countries, on the other hand we need to maintain that rate of growth that will enable the lifting of millions of our population out of poverty, enabling the flow of capital, of innovation and of technology into the country, the need to resist protectionism, to have a free multilateral global trading regime. So, all these are issues on which India would like to speak as a representative voice for the developing countries.

Question: A quick follow-up, Madam. Is there a possibility of India opting to host a G20 Summit in the future?

Foreign Secretary: I would not be able to answer that at the moment. I would not rule it out at some stage, but if you are asking me if there is a definite point on the agenda which would see India hosting a meeting in the near future, I would not be able to answer that in the affirmative for the moment.

Question: There has been a report in one of the papers saying that Prime Minister Manmohan Singh has a formula to save the global economy from its present crisis. Are you in a position to say anything about that? Does he plan to submit some proposals as to how to save the global economy?

Foreign Secretary: I think you should await the outcome of the deliberations at Seoul and the points that will be reflected in the Communiqué which will represent the consensus that is arrived at the meeting. I think the G20 as a grouping would continue to function as a very important forum to address global financial and economic issues for the future also. When the Pittsburgh Summit designated the G20 as the premier forum for international economic cooperation, that is just the emphasis that we are seeking to give to the meetings and the development dimension in the G20 agenda. So, the development dimension is going to increase and also acquire much more salience than in the past.

Question: Madam, can you tell us which bilaterals the PM will have on the sidelines of the Summit?

Foreign Secretary: I think it is with UK, with Canada, with Mexico and Ethiopia. These are some of the confirmed meetings. There will be a pull-aside as I said, with Brazil. There could be more meetings but we will be able to tell you that as the situation develops.

Question: Foreign Secretary, Tim Geithner, the US Treasury Secretary, was speaking yesterday here about the early warning system that the G20 would be discussing to essentially police deficits and surpluses. He said there was an agreement around having hard and fast numbers for targets of deficits and surpluses. But …(Inaudible)… India's position on this …(Inaudible)… these early warning system administered by the IMF?

Foreign Secretary: I think this is a theme that is still being developed in the discussions within the G20. Secretary Geithner did mention it. Obviously the focus as we see it is to consolidate growth and recovery within the world economy, the reform of the international financial institutions is very much a part of this agenda, and, as I said earlier, mandating work on development within the G20 and the commitment to fight protectionism. These are all issues in India's point of view which should require equal attention.

Question: Madam, what is India's position on this currency wars as they are calling it now? Where does India stand on this? Would India like Chinese to appreciate their currency or not?

Foreign Secretary: At the recent meeting of the G20 Finance Ministers also in the RoK a little over maybe two weeks ago, broad agreement was reached to move towards a more market determined exchange rate system or systems, and to refrain from competitive devaluation of currencies. That is the direction of the trend in which the discussion went. In line with the above, I think what the Seoul Summit can be expected to do is to help further suggest prescriptions to stabilize global financial and currency markets and to reduce volatility in the world financial markets.

Question: Is there an item on the agenda about a permanent Secretariat for the G20? If so, do you have any suggestions who might head it? …(Inaudible)…

Foreign Secretary: As far as I am aware that item is not on the agenda. I know it is being discussed among various countries informally but there has not emerged as yet any consensus view on this. Whichever country hosts the Summit has a Secretariat functioning at that point of time but not a permanent Secretariat. It does not seem to be on the agenda as yet.

Question: Outside of a broad statement supporting the development …(Inaudible)… so the focus is on emerging economy like India, what would be a specific outcome India would be looking at?

Foreign Secretary: That is exactly what I said. You have to await the outcome of the discussions. India is one of the participating countries. I mentioned the issues – the development related issues, the protectionism related issues.

Question: In the past there have been discussions on capitalizing the World Bank, India being the largest borrower …(Inaudible)…

Foreign Secretary: The reform of the IFIs as I mentioned is an ongoing part of the activity that the G20 has been looking at. And we had some progress in that regard both with the World Bank and now with the IMF. But it is a work in progress.

Question: Will India like the G20 to look at issues that go beyond terrorism, security and …(Inaudible)…

Foreign Secretary: I think the G20 is functioning as it should function as a premier forum for international economic cooperation. That is the focus that every member country wants to give to it at the moment.

Question: Madam, what is the difference in the nuances between our thinking on this currency war and American thinking on the currency war? Yesterday also that was asked in the press conference. Can you tell us where there is a major difference?

Foreign Secretary: It is not a question so much of difference. I think the China-US trade as you see it, and the volume, the magnitude of it, is far greater than what we have with either the US or with China. The trade imbalance that the United States has with China has been an issue for discussion between the two countries and the subject of a lot of public focus especially in America. So, it is in that context that the issue of devaluation of the Chinese Yuan or the need to devalue it and the issue of how China is going to handle the issue of currency valuation has come up. So, the US has a specific point of view about it and the issue of the trade surplus that China has with the US as they see it emanates in large part as from what is seen as this rate of the Chinese Yuan. So, that is the way the US is looking at it. In our case, as I said, we have talked about market forces and how currency rate valuation should come out of that. Of course we have a very large trade deficit with China. But we import a great deal of equipment at rather competitive prices from the Chinese market for our power sector, for our steel sector, for our infrastructure development. So, the picture is little different where the US and where India is concerned. But certainly in the context of the G20 I am sure that the whole issue of how to deal with currency valuation would be brought up certainly by some of the developed economies.

Question: Madam, sounds like both America and India believe that China is keeping its currency artificially low.

Foreign Secretary: I am not going to get into that. As I said, the situations are a little different for each of the countries concerned, whether it is the US or whether it is India.

Question: Yesterday there have been indications from China that their counter to the whole cap on current account imbalances is going to be quantitative eases in the US, which is something India is impacted by. What would our position be on that? Would we tend to take sides with China on that?

Foreign Secretary: On these issues which involve currency flows or currency rates it is not a question so much of taking sides with one country or the other as I mentioned to the earlier questioner. I think we have to study this further. I am not a specialist, I am not an economist. I think this is a question that is best answered by the economic Ministries concerned. So, I do not really want to get into a fruitless debate about this. And there will be ample opportunities during the Summit, of course. Our Finance Secretary is there; our Deputy-Chairman, Planning Commission is there. So, many of these questions can be answered then.

Official Spokesperson: Thank you.