Use forex reserves for infra: Summers

Former US treasury secretary Lawrence H Summers today came out strongly in support of the Indian government's move to invest a part of its foreign exchange reserves in financing infrastructure projects.

Citing the examples of China and South Korea, Summers said the Indian government should sit down with the Reserve Bank of India and resolve any issues in order to maximise benefits from its huge reserves.

"I am particularly amazed the way China and South Korea have utilised their huge foreign reserves to fund infrastructure projects", he said.

Summers and ICRIER chairperson Isher Judge Ahluwalia were briefing the media on the recommendations of the Eminent Persons Group, appointed by the Asian Development Bank, to suggest a roadmap for the multilateral lending institution. The report will be discussed at ADB's annual meeting in Kyoto next month.

Lawrence observed that there was no realistic prospect of any regional financial institution in Asia in near future even though 90 per cent of Asia's population would be in the middle-income group category by 2020.

"Having a common currency parallel to Euro or an Asian Monetary Fund does not depend on the level of income in this region. It depends on the degree of political harmonisation and convergence among the countries which is nowhere in sight," Summers said.