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Developed nations had fragile financial structures: India

The economies of developed nations have collapsed because of their "fragile" structures but India and China withstood the impact of global meltdown.

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The economies of developed nations have collapsed because of their "fragile" structures but India and China withstood the impact of global meltdown, external affairs minister SM Krishna said here today.

A day after India, Russia and China sought a greater role in global financial bodies, Krishna said the G-20 grouping of industrialised and major developing nations need not necessarily meet in a developed country but its meetings could be hosted by major emerging economies as well.

"We did discuss financial slowdown and the adverse impact it has had on our economies," he told a 'Meet-the-Press' programme while referring to his trilateral meeting with Chinese counterpart Yang Jiechi and Russian foreign minister Sergei Lavrov here.

"It has to be said even though most of the European countries and most of the countries around the world have registered negative growth, it is heartening to find that India and China have registered a positive growth," he said.
    
He noted that China continues to grow at around 8 per cent and we continue to grow at 6.3 per cent. "That shows how fragile has been the financial structure in the developed countries," the external affairs minister added.

"Developed countries have collapsed, their economies have collapsed but developing countries like India and China continue to have positive growth trajectory," he said.

At their meeting yesterday, Krishna, Yang and Lavrov pressed for reform of international financial bodies like IMF and World Bank entailing equitable voting powers to emerging markets and developing nations.
   
They said future G-20 Summits should be held by rotation in developed countries and emerging market and developing countries based on the principle of transparency and equity.

Replying to a question on this, Krishna said G-20, which is the nodal grouping discussing ways to emerge from global recession, need not necessarily meet in places like Chicago and Paris.
     
"Next year or next to that, you could find they (G-20 leaders) land in Delhi, Mumbai or Bangalore (for a summit). That possibility is there," he said.

In a joint communique issued after the Russia-India-China trilateral meet yesterday, the three nations felt the international architecture was not in tune with current realities and favoured a reform with representation to developing world.

They stressed that future global economic governance should feature in "balanced representation, equality and result-orientedness and ensure the voice and representation of emerging market and developing countries."

The ministers emphasised that "one of the ultimate goals of governance structure reform for international financial institutions is equitable distribution of voting power between developed countries and developing ones."

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