This will be the first step in the creation of the new financial order that Iam convinced will emerge out of the current mess. Nations will negotiate at this summit from their respective positions of strengths or weaknesses as the case may be.
India and China will be negotiating from a position of relative strength at the summit. Speaking for India, we have the following things going for us.
-A relatively strong Banking System that is regulated . What was thought as the weakness of the banking system has suddenly become its strength.
- A domestic economy that has the potential to grow at 7% next year in spite of the current worldwide financial turmoil. The key to achieving this would be ensuring availability and flow of Capital. Much of the capital worldwide has got destroyed and the nations of the world are going to compete for a share of the drastically reduced pie.
- Infrastructure creation spending potential in the country is really Huge , a prospect that can open up opportunities for the entire world.
- A domestic consumption potential which, if harnessed , can sustain a 8% growth comfortably for quite a number of years.
What is constraining us is our fiscal deficit and the consequent dependence on the dollar. Therefore we have to push for de-linking trade and BoP from the dollar and the basket of other currencies and use SDR's (Presently existing) or a new currency that can be used by all countries for International transactions. De-linking from the US dollar is an issue that most of the economies would push for considering the weak fundamentals of the US economy. This will also be our single biggest step towards achieving 'Economic Independence' and gain our rightful place in the Emerging Multi polar world.
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