20 April 2004 04:29
India gives reverse aid to US: World Bank experts
T V Parasuram Washington, April 20 (PTI) With accumulated foreign exchange reserves at their disposal, developing
countries, mainly India, China, Russia, Brazil and Mexico, are giving invaluable reverse aid to the US, though it is not
counted as aid and not meant as such, World Bank officials have said. In the last two years, these five countries have
built up large foreign exchange reserves of which they either keep in the US treasury or buy Treasury bonds, they said
at the release of annual Global Development Finance report Monday. Francois Bourguignon, World Bank's Chief
Economist, Hans Timer, who tracks global trends, and Mansoor Dailami, principal author of the report, acknowleged that
these countries have large unmet infrastructure needs but said the accumulated reserves cannot be used to correct that
because it requires expertise and other factors which Central Banks are not competent to provide. However, the building
up of the reserves indirectly attracts foreign capital to the countries. Foreign Direct Investment, the report notes,
can flow from business decisions to outsource services. A good example is Foreign Direct Investment in IT and business
process services in India. During 1996-2002, India "with its low-cost, English-speaking and IT-savvy labour
force" attracted almost one billion dollars in FDI, some of which went into setting up call centres. (THROUGH ASIA
PULSE)
[Press Trust of India] |
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