Friday, July 04, 2003
Raghuram Rajan as chief economist
The BBC writes that Raghuram Rajan, professor at the U-Chicago and author of the very interesting "Saving Capitalism from the Capitalists" has been appointed as chief economist of the IMF. It is interesting that the IMF chooses to appoint an Indian to a crucial post (joining Montek Singh Ahluwalia in the upper echelons) at a time like this. However, he has quite a task at hand, succeeding as he is, someone of Ken Rogoff's stature.
Rahguram has some very interesting comments to make in an interview published at Rediff about India becoming a lender to the IMF:
India just became a lender in the IMF.
(Laughs for a long time).
Why do you laugh?
Well, you will understand when I say that it seems a great source of national pride and to some extent it should be that we actually are in a position that we can lend and part of it has to do with we are redeploying our enormous reserves. But that said, a country like ours needs tremendous resources and really in the larger scheme of things, a developing country should be a big debtor rather than a creditor. In a small way, this is fine that we are putting our resources back into the IMF. But in the larger scheme of things if we were really doing the right thing, we should be borrowing a lot and investing a lot. Think about it, any growing economy should be investing tremendous amounts. I would say being a small creditor is fine but let us not get too carried away.
Do you find it ironic that India is now a lender?
A little bit. I mean the richest country in the world is the biggest debtor while poor countries are lending tremendously to rich countries (laughs). I don't say it is wrong in some ethical way. I am saying it is just funny that this should be the situation in the world economy. The question is how much is enough? It's a sign of some success. If we carry it too far, it will reflect some failure also.
Rahguram has some very interesting comments to make in an interview published at Rediff about India becoming a lender to the IMF:
India just became a lender in the IMF.
(Laughs for a long time).
Why do you laugh?
Well, you will understand when I say that it seems a great source of national pride and to some extent it should be that we actually are in a position that we can lend and part of it has to do with we are redeploying our enormous reserves. But that said, a country like ours needs tremendous resources and really in the larger scheme of things, a developing country should be a big debtor rather than a creditor. In a small way, this is fine that we are putting our resources back into the IMF. But in the larger scheme of things if we were really doing the right thing, we should be borrowing a lot and investing a lot. Think about it, any growing economy should be investing tremendous amounts. I would say being a small creditor is fine but let us not get too carried away.
Do you find it ironic that India is now a lender?
A little bit. I mean the richest country in the world is the biggest debtor while poor countries are lending tremendously to rich countries (laughs). I don't say it is wrong in some ethical way. I am saying it is just funny that this should be the situation in the world economy. The question is how much is enough? It's a sign of some success. If we carry it too far, it will reflect some failure also.
