World - Manmohan blames financial crisis on 'Casino' capitalism,regulatory failure

Siddharth Varadarajan

Beijing: On a day when stock markets plummeted by more than 10 per cent worldwide, Prime Minister Manmohan Singh put on his professorial hat to tell Asian and European leaders that a “collective international effort” to the international financial crisis must involve infrastructure investments in developing countries as a “counter-cyclical device” as well as the creation of a “global monitoring authority to promote global supervision” of cross-border investment, trade and banking.

In candid and even hard-hitting remarks to the first closed session of the Asia-Europe Meeting summit which got under way here on Friday, Dr. Singh said globalisation without the structure of global financial governance had led to severe problems. “Clearly there has been a massive failure of regulatory and supervisory powers. Speculators have had a free run for far too long a period,” he said. “International institutions like the IMF have also not covered themselves with glory. There has been an unacceptable failure of effective multilateral supervision of major developed economies and in particular of what has been going on in their financial markets.”

Dr. Singh was chosen by ASEM’s Chinese hosts to be the last speaker in the key session devoted to an informal exchange of views on the financial crisis. Underlining the sense in which objective developments have made Beijing and Delhi the focus of the heightened international attention on the relative resilience of the Asian economy, Chinese television showed Wen Jiabao enthusiastically welcoming Dr. Singh to the inaugural session of the ASEM summit.

The closed session, which was relayed live on closed circuit television to ministers and officials assembled in another room, was limited to the leaders themselves, many of whom sat in the room without even a single aide.

Speaking to the assembled leaders immediately after Dr. Singh’s intervention, Premier Wen said everyone in the room was aware of the Prime Minister’s long experience in successfully managing the Indian economy.

ASEM, now into its seven meeting, has 45 members from the two continents. India, which recently joined the grouping along with Pakistan, is attending the biannual summit for the first time.