India’s black money proposals presented at G-20 not feasible: Joe Hockey

CAIRNS, AUSTRALIA: India’s initiative on the retrospective sharing of information by banks to elicit information about black money at the G-20 meeting later this week is not likely to make much progress with Australia’s federal treasurer Joe Hockey saying it may be difficult and costly. Hockey is hosting G-20 finance ministers at Cairns, described as the gateway to Queensland's tropical north.

In an interaction with some reporters ahead of the meeting over the weekend, Hockey said, “Emerging market economies are actually more resilient now. A number of them are in better shape that they were after the financial crisis as many of them have taken measures.” He said they would be able to withstand any volatility caused by monetary tightening in the US.

Mexico has taken measures, as has Asia, and that gives them capacity to cope with greater volatility in currencies, he said, adding that another measure of comfort is that the US Federal Reserve is aware of the consequences of its actions for emerging economies. “We talked about this at the meeting in Sydney. (Fed chairman) Janet Yellen has assured emerging market economies that the US Federal Reserve would be mindful of the impact of decisions on emerging markets as they continue with tapering and go to the point of increasing interest rates,” he said.

Yellen will attend the G-20 meeting and will directly brief the world’s economic powers of its thinking. “I think it is very significant that the chairman is coming to Australia after her meeting and will be able to address the G-20 about any change of policy or decision of monetary adjustment made by the Fed Reserve,” Hockey said.

India is keen to get G-20 backing for its demand for retrospective sharing of information on bank accounts to bring pressure on Switzerland that has stalled New Delhi’s attempts to unearth black money stashed in secretive Swiss banks. “Retrospective reporting is a big systemic change as banks are in different jurisdictions,” Hockey said. “So (it’s) very hard to have information prepared in format on a retrospective basis. I think it is unreasonable to have retrospective requirement,” Hockey said.

He also strongly denounced protectionist measures, calling them the collective enemy of humanity. “Trade ministers have discussed this twice this year. Let me emphatically say that free trade is the best friend poverty alleviation has. Protectionism is the friend of poverty,” Hockey said, citing opening up in China. He added that free movement of professionals was a part of trade liberalisation and Australia would like to have greater access to markets including India for a range of different services.

“Most of the work I suspect will have to come from bilateral agreements rather than multilateral but I live in hope that multilateral agreements can deliver that outcome,” he said.