How can emerging market economies best contribute towards global economic Prosperity?

This was the starting point of the address that was given by Subbarao at IMF, Washington. The first point he iterated was that already the emerging market economies are growing at such a huge speed e.g. China and India are both growing at the rate 9% and 8% that it will be good for whole world economy if they manage to maintain this growth rate. In the face of crunching demand it was the developing countries that gave the developed countries as hope to produce more. Emerging economies were the first one that was able to come out of recession giving other nation necessary impetus to come out of recession. Market economies have learnt this thing in the hard way that it is good to diversify their stake , Japan suffered huge credit crunch since it has invested huge amount in the Lehman Brothers thus receiving the shock wave first. So market economies should allow the market economies to increase their investment of funds more in the their economy. The cap should be raised on the amount of Foreign Direct Investment and floating exchange rate should be followed giving a greater flexibility to manage funds compared to the administered exchange rate that is followed by China. It will help in a better way to absorb the future risks.

 

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[Dhruv Bindhani]

This was the starting point of the address that was given by Subbarao at IMF, Washington. The first point he iterated was that already the emerging market economies are growing at such a huge speed e.g. China and India are both growing at the rate 9% and 8% that it will be good for whole world economy if they manage to maintain this growth rate. In the face of crunching demand it was the developing countries that gave the developed countries as hope to produce more. Emerging economies were the first one that was able to come out of recession giving other nation necessary impetus to come out of recession. Market economies have learnt this thing in the hard way that it is good to diversify their stake , Japan suffered huge credit crunch since it has invested huge amount in the Lehman Brothers thus receiving the shock wave first. So market economies should allow the market economies to increase their investment of funds more in the their economy. The cap should be raised on the amount of Foreign Direct Investment and floating exchange rate should be followed giving a greater flexibility to manage funds compared to the administered exchange rate that is followed by China. It will help in a better way to absorb the future risks.

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