New Delhi: World Bank President Robert Zoellick on Saturday said the Dubai debt crisis is manageable and it would not affect India.
“I personally think that the Dubai financial problem would be contained and is manageable. I don’t think it to have an effect on Indian markets,” Zoellick said.
Zoellick was talking to reporters here after a meeting with policy makers, including Reserve Bank of India (RBI) governor D Subbarao and Planning Commission deputy chairman Montek Singh Ahluwalia.
Though India would not be hurt, he said events in Dubai, due to the nervousness in financial markets may prompt a second or a third look at investments in emerging markets.
About the meeting, to understand how India is coming out of the global financial crisis, he said the policy makers feel the stimulus has helped the economy.
“I got a general sense that they feel that the fiscal expansion has played an important role,” Zoellick said on the final day of his four-day visit to India.
“And, overtime as they (India) return to growth they are also going to try to get some fiscal consolidation,” he added.
Speaking on the priorities of Indian policy makers, he said they are more interested in longer term investments like foreign direct investment (FDI) rather than portfolio investment.
“I think what I get as the principal interest of Indian policy makers is for longer term investment, not portfolio investment, so much as foreign direct investment,” he said.
FDI can help India connect to the international economy, Zoellick said, adding he is impressed at the rise in it in the country.
“One of the interesting observations that was made at the meeting was that the FDI numbers have gone up and that’s a good sign,” he said.
Zoellick said the critical things discussed at the meeting included looking ahead and seeing what kind of urban strategy, infrastructure or water strategy could be pursued.
Finally, the World Bank chief said he is emboldened by the Indian recovery and the growing stature of the country helping global stability.
“I have been encouraged how India has come back quickly in this crisis ... I think that it can play an important role not only for the people of India but in the international economy,” he said.
The Department of Industrial Policy and Promotion (DIPP) secretary Ajay Shankar and India’s executive director to the World Bank Pulok Chatterjee also attended the meeting.