Asian Development Bank President Haruhiko Kuroda on Saturday said that 1997-type of financial crisis was extremely unlikely to erupt in Asia but agreed that safety net was required to deal with any eventuality in future.
Speaking to media persons at the conclusion of the 39th annual meeting of the Board of Governors of ADB, he said many Asian countries have taken corrective measures after the 1997-98 crisis.
"The 1997-type of financial crisis is extremely unlikely to erupt in Asia because many Asian countries have improved economic management, their short term external liability has declined, foreign exchange reserves have improved and banking system has been strengthened," he pointed out.
He, however, agreed with Indian Prime Minister Manmohan Singh that it was "prudent and appropriate to have safety net and framework so that the countries are better prepared in case any external shocks or internal events create problem."
He indirectly ruled out restoring loan charges to pre-2000 level as demanded by Indian Finance Minister P Chidambaram. He argued that the ADB had already reduced costs in many ways.
"Nine to 10 per cent interest rate is already low. We extend loans for 20 years or more and for such long-term loans, the charges are already low," he maintained.
Replying to a question, the ADB president said, "Indian economy is accelerating and poverty is reducing. I am hopeful that it can at some stage reach the level of a developed economy. He was commenting on Chidambaram's statement that India would be a developed economy in less than 14 years.
Noting that the Indian economy grew by 8 per cent during last three years, Kuroda said further acceleration would be possible if infrastructure was improved and economic reforms continued. "If Indian economy grows at 7 percent, the GDP will double in 10years but if it grows by 10 percent, the GDP will double in 7 years," he observed.
