AIIB's Erik Berglof on ongoing economic turmoil and more
In an interview with Business Standard's Asit Ranjan Mishra, AIIB chief economist Erik Berglof talks about the economic turmoil and how the bank played a key role in bringing India and China closer.
Asit Ranjan Mishra New Delhi
 "AIIB chief economist Erik Berglöf")
AIIB chief economist Erik Berglöf
Q1: How different is the current economic turmoil that India and the world is experiencing from the past ones?
Ans:
>We are in a world which is very different after February 24
>The pandemic had created a divergence between the advanced economies and developing economies
>The divergence was playing out in access to vaccines, scarring in terms of unemployment and GDP growth; and scarring from education losses
>Apart from inflationary pressure, new rises of fuel and food prices started impacting from Feb 24
>Since the Cold War, we have benefited from the ‘peace dividend’
>Don’t see a convergence between advanced and emerging economies — that is a new feature of the world
Q2: Are we heading towards yet another global recession and do you see it as a mild or strong one?
Ans:
>Possibility of a recession is true for the advanced economies
>After rapid price rises, central banks have reacted now, which triggered a recession
>We are not going to see a major recession like the global financial crisis
>It will be a recession of the more traditional type
Q3: The tension between India and China has increased in the past two-three years. Has it affected AIIB’s functioning and project funding in India, since AIIB is considered as a China-led bank?
Ans:
>The association of ‘China-led bank’ is unfortunate
>China has a quarter of shares in AIIB. Europe has another quarter. More than half is for other countries
>AIIB has played a positive role in rebuilding the relationship between India and China
>AIIB’s most important client by some stretch is India
>We have a problem because there may be too much activity in India. Markets don’t like too much concentration
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First Published: Jul 12 2022 | 7:00 AM IST
