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Hyderabad, May 6 - Asian Development Bank (ADB) president Haruhiko Kuroda Saturday said a 1997 type of financial crisis was 'extremely' unlikely to erupt in Asia, but agreed that a safety net was required to deal with any eventuality.
Addressing a press conference at the end of the 39th annual meeting of the board of governors of the ADB, he said many Asian countries had taken corrective measures after the 1997-98 crisis.
'1997 type of financial crisis is extremely unlikely to erupt in Asia because many Asian countries have improved economic management, short-term external liability has declined, foreign exchange reserves have improved and banking system has been strengthened,' Kuroda said.
However, he agreed with Prime Minister Manmohan Singh that it was prudent to have a safety net for the countries to be better prepared in case of any external shock or internally created problem.
Kuroda indirectly ruled out restoring loan charges to pre-2000 level as demanded by Finance Minister P. Chidambaram. He argued that the ADB had already reduced costs in many ways. 'Nine to 10 percent 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 said.
On the Indian economy, the ADB president said it was accelerating and would reach the level of a developed economy. He was reacting to Chidambaram's statement that India would be a developed economy in less than 14 years.
Noting that India's economy grew by eight percent in the last three years, Kuroda said further acceleration would be possible if the infrastructure was improved and economic reforms were continued.
'If Indian economy grows by seven percent, the GDP will double in 10 years but if it grows by 10 percent the GDP will double in seven years,' he said.
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