BANKING
| RBI Governor bats for collective efforts to tackle economic issues Wed, 30 Mar 2011 |
| COLOMBO: More countries have begun to think on the problems of common economic concerns with a wider perspective despite there being no natural constituency for the global economy as such, Reserve Bank of India Governor D. Subbarao said here on Tuesday. Talking to this correspondent at the Central Bank of Sri Lanka, he said that he based his optimism on the proceedings of the Paris conference on global economic recovery held early this year. Though each country normally talks for itself in global fora, there was a sense of purpose to come together at this meeting. “I think this trend will continue,” he said. Delivering the 60 {+t} {+h} anniversary oration on ‘Frontier Issues on Global Agenda — emerging economy perspective,' Dr. Subbarao said that it was more than clear that every single financial crisis came from the same fundamental issues. If these issues were not addressed, then it would again repeat itself. “The global problems we are facing today are complex and not amenable to easy solutions. Many of them require significant and often painful adjustments at the national level, and in a world divided by nation-states, there is no natural constituency for global economy. At the same time, the global crisis has shown that the global economy as an entity is more important than ever,” he said. The adjustments that are required as part of the collective efforts to get out of the present crisis “will be painful for every country” but there was no easy way out. Steps had to be taken otherwise the global economy would be headed for another crisis sooner or later. “We should cooperate not only to firmly exit from the crisis, but also to ensure that in resolving the crisis, we do not sow the seeds of the next crisis,” he said. Dr. Subbarao warned that after the crisis, there would be a tendency for most developed nations to resort to protectionist policies. “Recent international developments mark an ‘ironic reversal' in the fears about globalisation,” he said and added that earlier the developing economies feared integration into global markets, but now the developed world was resisting because the electorate in those countries have been led to believe that, at one level, globalisation meant loss of jobs. In actual terms, for the low-end jobs shipped abroad, better paying jobs were being created in those countries. But if creation of this better paying job lags, as it sometimes does, then, people would find it difficult to accept shipping out of jobs to other countries, he added. |
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