Developing nations need to be part of financial solution: PM

 Warning that a looming possibility of recession in the global economy threatens to disrupt the rhythm of growth in developing nations, prime minister Manmohan Singh today said they should be made part of an overall financial solution as gains made in the last few years cannot be put at risk.     

Noting that the international financial crisis has revealed the extraordinary vulnerability of the global financial system even in the industrialised world, Singh said the world is facing "multiple challenges" which threaten to squander the gains of developing nations, including India.     

"The world is now facing multiple challenges. The spectre of recession in the global economy, coming as it does in the wake of steep rise in energy and food prices, threatens to disrupt the rhythm of economic development in many developing countries," Singh said.     

"Developing countries like India are also affected by the crisis and have to be part of the solution. We cannot afford to risk the gains we have made in the last few years.

Nor do we wish to remain vulnerable to infirmities in international surveillance, supervision and regulatory mechanisms in the future," he said.     

Winding up his visit to Japan, from where he flies to Beijing to attend the Asia-Europe (ASEM) Summit starting tomorrow, Singh said the turmoil in international markets has to be prevented from turning into a "crisis of confidence".     

"The crisis has choked credit flows and predictably spilled over to the stock market.

We have to prevent the liquidity crisis from becoming a crisis of confidence in the international monetary and financial system," he said.