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Lawrence H Summers, the former Harvard president, has maintained a low profile in the United States since he stepped down from the university post last year amid controversy and criticism.
Enlarge This Image Pankaj Nangia/Bloomberg News Lawrence H Summers, right, Harvard's former president, meeting with Montek Singh Ahluwalia, deputy chairman of the India Planning Commission, Tuesday in New Delhi. But in Asia, Mr Summers appears to be the man of the hour. His views on the importance of Asias growth, the challenges of globalization and the danger of the United States huge trade deficit are widely promoted by policy makers and economists. He is eagerly solicited for lectures and keynote speeches, where his characteristically unvarnished opinions creep into discussions of fiscal policy.
global warming needed to take place in the developing world. The industrial world was responsible for much of the problem, he said, but most of the solutions must come from the developing world, where emissions are growing the fastest and infrastructure is still unbuilt. The developing world should demand that it be compensated and supported for taking actions in the interest of all, he said. Larry is very stimulating intellectually and an out of the box thinker, said Isher Judge Ahluwalia, the chairwoman of the Indian Council for Research on International Economic Relations, the group that invited Mr Summers to speak. There is a wisdom in the way that he looks at problems which are global, Ms Ahluwalia said, adding that Mr Summers listens to other peoples ideas, particularly when the topic is developing countries. Ms Ahluwalia and Mr Summers recently served on a small panel given the duty of mapping the future of the Asian Development Bank, where Mr Summers was the only American participant. The six-member panel decided that by 2020 a new Asia will need a radically different development bank with a global focus.
While eminent Indian economists like Jagdish Bhagwati, a proponent of unfettered free trade, were arguing against regional trade alliances in the mid-1990s, India and other South Asia countries were pushing for them, in part because Mr Summers supported the alliances, said Saman Kelegama, the executive director of the Institute of Policy Studies of Sri Lanka and co-editor of The South Asia Economic Journal. Larry was one of the main proponents of regional trade alliances, Mr Kelegama said, and his view was considered seriously.
In a series of visits to China, India, Singapore and Hong Kong since early 2006, Mr Summers has reiterated several themes that have special resonance in Asia, but have yet to be widely accepted in the United States. Among them are the idea that growth and changes in Asia are the most important thing to happen during our lifetimes, that the United States and Europe have not yet appreciated the impact of these changes and that the global imbalances from the United States current-account deficit nearly $1 trillion in 2006 could have severe consequences. Mr Summers has been sharply critical of current American fiscal policy and the way that Asia sustains borrowing by the United States by continuing to purchase government debt. During a visit to Mumbai in March last year, Mr Summers warned the Reserve Bank of India of the United States unsustainable and dangerous current-account deficit.
Asia Society dinner that 300 years from now, what will be seen as the most important event of these times will not be the end of the cold war, the terrorist attacks of Sept. Mr Summers did not attend a New Delhi conference in March about new ways to finance Asian infrastructure, but he was cited so often by government ministers and development specialists there that he might as well have been. Ramgopal Agarwala, the senior adviser to RIS, or the Research and Information System for Developing Countries, quoted Mr Summers extensively in a proposal that all Asian countries contribute to a fund that diverts money away from United States Treasury bills and into Asian infrastructure. If exposure to the United States deficit is not managed well, we cannot rule out a possible global recession, even depression, said Mr Agarwala, a former World Bank economist based in China, adding that Asia has a crucial role to play in correcting these imbalances. The governments of China and India have both announced that they will invest their foreign exchange reserves in new areas, which will divert them from United States Treasury bills. Subir Gokarn, the chief economist at Crisil, a ratings agency in India, said that Mr Summerss remarks about the race to the bottom, and the adverse effects of globalization strike a chord in Asia.
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