‘Long way to go before recession ends’-Y.V.Reddy

Asia likely to re-emerge as dominant
region in a decade or two: Y.V. Reddy

Magnitude of trade between
India and China will be defining factor

Crisis is triggered due to excessive imbalance without
remedial policy actions

HYDERABAD:
Former Governor of Reserve Bank of India Y.V. Reddy
has said that the recent correction in the global
recession was minor and much remains to be
achieved before normalcy is restored in
world economy.

Delivering the Justice
Konda Madhava Reddy memorial lecture on
the topic ‘global financial crisis and Asia’ here on Friday,
Mr. Reddy said the slowdown was generally traced to excesses
in many areas of economic and financial managements in
several countries. Since the crisis was at global level,
all policy interventions at crisis management should be
at national-level.

He added that the crisis
was not simply a failure of markets,
but the State apparatus in money and finance.

Therefore, a balance between governments and markets
had to be considered.
Critical scenario

The crisis had reaffirmed the prospect of Asia re-emerging as
a dominant region within a decade or two.

It was critical for Asia to assess its problems, prospects and role
in the process of rebalancing and designing normalcy in global
economic management.
The most defining factor for re-emergence
of Asia as a force in global economy might be
magnitudes and quality of trade between China and India,
he said.

Mr. Reddy felt
the crisis was triggered by one set of countries
consuming too much and saving less while another set saved too
much and consumed too little. These excessive imbalances were
known but remedial policy actions were not taken at national and
global levels.