April 9, 2010 - Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission and G20 sherpa during an interview with The Globe and Mail regarding the upcoming G20 meeting in Toronto, Canada. Photo: Charla Jones for The Globe and MailCharla Jones/The Globe and Mail
With an economist's knack for simplifying global issues and an Oxford-trained flair for argument, Montek Singh Ahluwalia serves as an important voice for India on the world stage.
He previously worked for the World Bank and the International Monetary Fund, and is now deputy chairman of India's planning commission, a powerful state body that establishes the country's five-year plans.
In an interview at his offices in New Delhi, Mr. Ahluwalia set out India's vision for the world's most powerful club.
ON G20 REPLACING THE G8:
"Is it replacing the G8? Well we're not members of the G8 so I don't know what the G8 intends to do, but I think members of the G8 have said the G20 is the premier international forum where economic issues will be addressed. Is this a good development? I think so. I would see it as an important step in democratizing what was otherwise a fairly small group of countries, i.e. the G7 or G8. This expands it, and to that extent we now have inside the room countries that account for 80 per cent of global GDP."
ON DEVELOPING COUNTRIES GETTING MORE POWER IN IMF, WORLD BANK:
"Global economic weights have changed. The weight of the countries in these institutions has not changed. At the moment you have very small European countries that have a larger vote than either China or India.
That just doesn't make any sense. I recognize that all institutions are to some extent grounded in history, and it's not easy to change things overnight. But there can be no doubt that the direction of change has to be to give these emerging-market countries a greater weight and voice."
ON MATERNAL AND CHILD HEALTH:
"From a global point of view, I think the G20 has an agenda already, and that agenda is not yet complete. That agenda relates to, as I said, reform of the international financial institutions. We've got the outline of the reform but we must get it done. ... The other issue is how to use this forum to bring about a better understanding of what policies adopted by the G20 countries would be internally consistent with bringing about a revival of global growth in an environment in which industrialized countries, we know, are going to grow more slowly. That's not an easy thing to do either, so, frankly, let's concentrate on the things we've got."
ON FOSSIL FUEL SUBSIDIES:
"Our view is that there is a role for subsidies provided these are very highly targeted. But otherwise we ought to move to an energy price regime where energy prices reflect world prices. Now we're not there yet, that's what we're trying to push for, and there's no harm in the world taking a look at that. We're not the only one with energy subsidies, there are a lot of countries with energy subsidies, and I think a global consensus on the role of energy subsidies would be a good thing. But we're quite clear that all energy subsidies cannot be removed, but they can be rationalized."
ON THE ECONOMY:
"There's general agreement that in the short run, fiscal stimulus was a good idea. Not every country agreed with this view, and one of the important outcomes - one of the successes - of the G20 was that the consultations led to a general agreement. But we do face an issue of how do we exit from this stimulus. It's clear that an exit has to happen but it's an issue of timing. Should you exit now? Should you exit very rapidly or slowly? It seems to me the general consensus at the moment is that you should begin to plan the exit but an immediate and sudden withdrawal of the stimulus is not being recommended by anyone."
ON PAUL MARTIN:
"You might say that the G7 was a nice cozy group of countries that were at roughly the same level of development, knew each other, met each other. I suspect that what happened was that they just weren't the groupings needed to develop a consensus, in order to move ahead. They were already pretty much on the same page. ... Actually it was Canada that invented the G20, Paul Martin who after the Asian crisis said we need to have a grouping at the finance ministers' level, the G20. The decision to convert it into a leaders' forum was taken in the aftermath of this crisis, and I don't think the achievements so far have been modest. I don't actually believe the massive infusion of funds into the IMF, for example, would have taken place if it had been left only to the finance ministers. It's because you had a leaders' forum that you got high-level political attention on this issue, which enabled them to break a lot of logjams."
ON THE SUMMIT IN TORONTO:
"The Canada meeting is a very important one, because this is the first time they can honestly say, right, we've managed the crisis, economies are not falling off the cliff, but it's still an open question whether we have a viable path back to reasonable growth. And that's exactly the issue they will be addressing."