Mumbai: A top economic adviser to US President Barack Obama said on Friday protectionism is a rising threat to the global economy that destroys value.
Governments in emerging markets, fearful that rising exchange rates will hurt exports and stunt growth, have taken measures to limit currency appreciation, sparking fears of escalation into protectionism that could undermine global growth.
“The rise of protectionism is one of the rising threats to the global economy,” outgoing economic adviser Lawrence Summers said in India’s financial capital.
Summers, in India ahead of the US president’s visit next month, declined to comment on currency tensions.
“In the end, protectionism makes people poor, makes nations more hostile to one another, reduces opportunities for businesses and for workers. And it is as good as being in a zero-sum game, it is actually a negative-sum game because it destroys value,” he said in response to an audience question during a lunch.
“I am hopeful that the whole momentum in the international economic integration will continue and that the world will sort out the forces of protectionism.”
Summers, who coordinates economic policy for the president as director of the white house national economic council, has announced that he would step down at the end of the year to return to Harvard University, where he is a professor.