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WASHINGTON: Indian Prime Minister Manmohan Singh has voiced confidence that the US economy will make a strong recovery and poured cold water on talk of dropping the dollar as the key global currency.
In an interview ahead of his arrival on Sunday on a state visit to the United States, the 77-year-old trained economist said he had grown accustomed to predictions of US economic decline over the decades.
The US economy "has shown a remarkable capacity to bounce back," Singh told CNN, hailing "the entrepreneurial spirit which is the hallmark of the American enterprise system."
"I have no doubt that these things are not permanent, irreversible shifts, but that the American economy has the capacity to bounce back to its normal growth mark," he said of recent US economic woes.
Singh holds a doctorate in economics from Oxford University and spearheaded India's market reform drive in the 1990s that ended decades of state economic planning.
The Indian prime minister dismissed talk in some emerging economies about replacing the dollar as the key international reserve currency.
"As far as I can see, right now there is no substitute for the dollar," Singh said.
China's central bank has proposed a shift away from the dollar to a basket of currencies that also includes the euro and yen, calling excessive reliance on the greenback a destabilising factor for the global economy.
But Singh said: "I think even the Chinese are hesitant."
"The fact that they hold 2.5 trillion dollars in reserve assets (and) they have not disposed of even a fraction of that - that's a measure of the confidence that the world has in the dollar."
Singh also renewed his commitment to bringing India back to eight to nine percent annual growth after a blow from the global economic crisis, saying the country needed such rates to reduce poverty.
The Organisation for Economic Cooperation and Development projects that India will grow 6.1 percent in 2009. - AFP/de
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