LOS CABOS, Mexico (NNN-Bernama) -- India on Tuesday announced a US$10 billion contribution to the IMF's additional US$430 billion financial firewall to help the debt-wracked 17-nation eurozone so that the faltering world economy is protected against the spread of any financial contagion.
The announcement of the contribution was made by India's Prime Minister Manmohan Singh in his address at the Plenary Session of the seventh summit of the Group of developed and developing countries (G-20) in this Mexican resort town against the backdrop of growing calls to nations to increase contributions to the International Monetary Fund (IMF) for the bailout fund.
Press Trust of India reported that India's contribution along with pledges by other member countries of the five-nation BRICS bloc has helped increase IMF's resources and give a boost to the US$430 billion fund being used as a firewall to support struggling eurozone economies.
India has previously pledged to make contributions to the bailout fund but did not disclose the exact amount of its contribution to the fund.
According to Chinese Vice Finance Minister Zhu Guangyo, the BRICS is committed to pledge US$60 billion to boost the firewall. Besides India and China, the other countries in the bloc are Brazil, Russia and South Africa.
The IMF fund will serve to help governments that are struggling to cope with debt repayments but eurozone leaders still faced pressure from their G-20 peers to make reforms to head off future financial crisis.
Calls were being made to the eurozone to put in place a bigger financial firewall to combat the crisis before other countries will pour more cash into the IMF.
Noting that developed countries have expanded the resources of the IMF enormously, largely to support programmes in rich countries, Singh said that steps are now needed to be taken to substantially expand the resource base of Multilateral Development banks so that they have the firepower to help developing countries pursue their development goals.
On countries pledging more resources to IMF, Singh said there is concern that the firewall available may not be adequate to deal with the financial contagion.
Stating that the global economic situation is deeply worrying, Singh said the economic recovery is faltering and even the fast growing emerging markets are slowing down.
Calling for policy action on several fronts, Singh said that the issue of greatest concern at present is the uncertainty affecting the Eurozone.
Singh said that the Las Cobas Summit needed to send a strong signal to the markets that the Eurozone countries will make every effort to protect the banking systems and the global community will back a credible eurozone effort and response. -- NNN-BERNAMA
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