Washington - The world must not fail to protect developing countries from a recession that was not of their making, Indian Prime Minister Manmohan Singh warned Saturday.

"Our willingness to take specific steps to support developing countries in this period of exceptional difficulty will be a test of our collective leadership," said Singh, an economist, former central bank governor and finance minister, and the architect of India's economic reforms programme in the 1990s.

Singh is representing one of about a dozen emerging economies which, along with the G7 industrial nations, belong to the G20.

The group has met only at the level of financial ministers and central bank heads since its founding in 1999, and is coming together at the leadership level for the first time this weekend in Washington - a recognition of the increasing importance of their dynamic economies in the world economy and the current world financial crisis.

"Emerging market countries were not the cause of this crisis, but they are amongst its worst affected victims," Singh said, adding that the combined effect of lower exports and capital flow, choked credit and reduced levels of foreign direct investment will impede economic growth in these nations.

As growth staggers, millions will be pushed back into poverty, and there will be adverse effects on nutrition, health and education. "These are not transient impacts but will impact a full generation," the premier said.

Emerging economies that have made "strenuous efforts" to implement reforms by taking risks, which were unpopular or viewed suspiciously domestically, must be supported, Singh said, or people will again lose faith in the benefits of globalization.

Singh understands only too well the challenges of opening up an economy. When he took over as finance minister on June 21, 1991, the country's economy was sinking.

Prices were soaring at almost 20 per cent, foreign exchange reserves had depleted and India was battling insurmountable foreign debt. Its protectionist economy, controlled by politicians and bureaucrats, was bogged down in red-tape, corruption and excessive import duties.

Singh had the unenviable task of breaking the socialist chains that bound the economy and ushering in an era of economic liberalization - which he maintains was reform with a human face.

While acknowledging that the current crisis, which a year ago seemed to be localized to one part of the US financial system, has rapidly spread through inter-connected markets, Singh was confident that India would still manage a steady growth rate.

For the last four years, India has maintained a 9-per-cent growth rate, which is expected to slow down to between 7-7.5 per cent in the current financial year. While the pace of growth next year will partly depend on how long the global recession lasts, Singh said he expected India to maintain a strong pace as much of its growth is internally driven.

Calling the summit "timely," the Indian leader said a coordinated fiscal stimulus - viewed as risky by some - would help to mitigate the severity and duration of the recession, while boosting the confidence of investors around the world.

He welcomed an initiative by the International Monetary Fund (IMF) to establish a new quick-disbursing liquidity facility, but questioned its financial ability to manage the worldwide crisis, especially if the global recession is pronounced.

Looking ahead to see what changes should be implemented to prevent future crises, Singh said the world must create a credible system of multilateral surveillance as well as understand that blocs such as the G7 are "no longer sufficient to meet the demands of the day."

The summit "raised expectations in many circles that we will work to produce a new Bretton Woods II. The world has certainly changed sufficiently to need a new architecture, but this can only be done on the basis of much greater preparation and consultation," Singh said.

There have been doubts raised that the summit will garner little more than an agreement to meet again. The Indian prime minister said: "We need to ensure that the processes we set in motion today safeguard and promote the welfare of our future generations." (dpa)