Dubai debt crisis not to hit India: Zoellick

Dubai debt crisis not to hit India: Zoellick

Cautions investors on emerging markets

Robert Zoellick

“The Dubai debt crisis is manageable. Impact of it can be contained. I do not think it will have an effect on the Indian markets,” he told newspersons here.
However, he said though the Dubai phenomenon would not impact India much, investors would be more cautious about making investment in emerging markets in view of nervousness in financial markets in the event of financial turmoil in Dubai.  Earlier in the day he had a meeting with the Planning Commission Deputy Chairman Montek Singh Ahluwalia before concluding his current visit to this country.

Asked about his interactions with India’s key policy makers during his four-day stay, Zoellick said he discussed at length how India could manage to withstand the effect of global financial crisis. “We got the impression from them that series of fiscal measures undertaken by the Indian government to prop up demand in the economy have played an important role,” he said.
 At the same time policy makers in India feel that as soon as the Indian economy return to normal growth path focus would be given on fiscal consolidation, he said.

Long term FDI
In reply to a query Zoellick said India was more interested in attracting  Foreign Direct Investment on long-term basis rather than portfolio investment.  The long term foreign investment would help Indian economy as it would engaged the emerging economy to stay connected with the global economy, he said.
The World Bank Chief suggested that enhanced focus on building up key infrastructure sector would help Indian economy to move on path of higher growth rate trajectory on a sustainable basis.