Eliminate Safe Havens For Economic Offenders, Modi Tells G20

Prime Minister Narendra Modi on Monday made it clear that effective financial governance requires "full commitment" to act against the corrupt and elimination of "safe havens" for economic offenders as he called on G20 members to break down the web of excessive banking secrecy.

In his intervention on the second day of the G20 Summit in the east Chinese city of Hangzhou, Modi said fighting corruption, black money and tax-evasion were central to effective financial governance.

To achieve that, he said, "We need to act to eliminate safe havens for economic offenders, track down and unconditionally extradite money launderers and break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds".

The prime minister said that a stable global economic and financial system is imperative for growth as it promotes inclusive and sustainable growth.

He called for further strengthening of the global financial safety net.

"We need a regular dialogue between the IMF, Regional Financial Arrangements and Bilateral Swap Arrangements. Important mechanisms like financial stability board should stick to their core mandate," External Affairs Ministry spokesperson Vikas Swarup quoted the Prime Minister as saying in a series of tweets.

"IMF should remain a quota-based institution and not depend on borrowed resources," Modi said emphasizing that the "long-delayed 15th General Review of Quotas must be completed by 2017 Annual Meetings."

The Prime Minister also said that India needs energy to support its development. A "balanced mix of nuclear, renewal energy and fossil fuels are at the core of our policy."

The G20 member states represent 85 per cent of the world's GDP.

Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the European Union make up the G20.

Rising Protectionism

The global economy is being threatened by rising protectionism and risks from highly leveraged financial markets, Chinese President Xi Jinping said at the opening of the two-day summit.

His warning on Sunday followed bilateral talks with Barack Obama that the U.S. president described as "extremely productive", but which failed to bring both sides closer on thornier topics such as tensions in the South China Sea.

With the summit taking place after Britain's vote in June to exit the European Union and before the U.S. presidential election in November, observers expect G20 leaders to mount a defence of free trade and globalisation and warn against isolationism.

The global economy has arrived "at a crucial juncture", Xi said, in the face of sluggish demand, volatile financial markets and feeble trade and investment.

"Growth drivers from the previous round of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum," he said.

G20 countries are set to agree in a communique at the end of the summit that all policy measures - including monetary, fiscal and structural reforms - should be used to achieve solid and sustainable economic growth, Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda said.

"Commitment will be made to utilising all three policy tools of monetary and fiscal policies and structural reforms to achieve solid, sustainable, balanced and inclusive growth," Hagiuda told reporters on the sidelines of the summit.

Xi also called on G20 countries to match their words with actions.

"We should turn the G20 group into an action team, instead of a talk shop," he said.

But some of the G20 leaders have begun drawing battle lines in disputes over issues ranging from trade and investment to tax policy and industrial overcapacity.

Battle Lines

On Sunday, Xi held talks with Australian Prime Minister Malcolm Turnbull and told him he hoped Australia would continue to provide a fair, transparent and predictable policy environment for foreign investors.

China was angered when Australia blocked the A$10 billion ($7.7 billion) sale of the country's biggest energy grid to Chinese bidders last month.

China has accused Australia of bowing to protectionist sentiment in blocking the bid for Ausgrid, as well as an earlier one by a China-led consortium to buy cattle company Kidman & Co.

Beijing has also criticised Australia, a staunch U.S. ally, for running surveillance flights over disputed islands in the South China Sea.

Meanwhile, European Commission President Jean-Claude Juncker said China must set up a mechanism to address its problem of industrial overcapacity, saying it was "unacceptable" the European steel industry had lost so many jobs in recent years.

"Overcapacity is a global problem but there is a particular Chinese element," he told a news conference.

Britain's future after its departure from the European Union was also subject to discussion.

Obama reassured Prime Minister May that Britain's closest political, commercial and military ally would stand by her.

But he did not shrink away from his stance that Brexit was a mistake and that London would not be able to jump the queue to arrange a bilateral trade deal.

Juncker said that if Britain wanted access to the European Union's common market, it needed to respect the rules of the common market.

Turnbull, meanwhile, said Australia wanted an early free trade agreement with Britain so markets could remain open between them when Britain formally left the European trading bloc.

Security was extremely tight in Hangzhou, with parts of the city of 9 million people turned into a virtual ghost town as China seeks to ensure that the G20 summit stays incident-free.

(Agencies)