Beijing, Oct 24 : Prime Minister Dr. Manmohan Singh said that globalization without global financial governance structure can lead to severe problems as has been seen in the recent turmoil.
Dr. Singh said so on the sidelines of the seventh Asia Europe Summit (ASEM) in Beijing.
"Massive failure of regulatory and supervisory mechanism has really been the reason for the present turmoil and if there had been a good regulatory mechanism, this would not have happened," said Dr. Singh.
He further said the reform of reconstruction of financial system has to be a collective international effort since borders no longer confine financial institutions or can keep out financial turmoil.
While talking of measures to stabilize the financial turmoil, the Prime Minister said that as a counter cyclical device, increased infrastructure investments in developing countries, if backed by increased resource flows from multinational financial institutions such as the IBRD and the Regional Development Banks, could act as a powerful stabilizer.
Dr. Singh also stated that India's economy is sound and is likely to grow at 7 to 7.5 percent.
Meanwhile, the ASEM Summit has begun in Beijing and global financial crisis will dominate the agenda of the meeting.
Dr. Singh will address the Summit on Saturday.
Besides the global financial crisis, issues like energy, climate change and food security will also figure in the deliberations. By Naveen Kapoor