The Hindu : India integrating well with global economy: Morgan Stanley

Online edition of India's National Newspaper
Tuesday, Mar 30, 2004

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India integrating well with global economy: Morgan Stanley

By Our Special Correspondent

NEW DELHI, MARCH 29. The international investment banker, Morgan Stanley, today appreciated India's economic performance while observing that the domestic economy was more integrating with the global ones and corporate houses were focusing on cutting cost to be competitive.

"India is certainly performing well... The economy is increasingly getting integrated with the global economy,'' the Chief Economist and Managing Director of Morgan Stanley, Stephen Roach, said today while addressing a Confederation of Indian Industry seminar on `Global re-balancing: Day of reckoning.' Noting that India's corporate houses were more focused on cutting costs than ever before and outsourcing was one of the options before the country to leverage growth, he said outsourcing of manufacturing to India was quite possible if the bottlenecks were removed.

He also said there was ignorance among the global investors as far as the economic reforms were concerned.

About the growing debate on the issue of outsourcing, Mr. Roach said the Presidential elections in the U.S. had raised it to political level.

"Outsourcing has become more of a political issue in the U.S.,'' he said, adding that the future was dependent on who would win the election.

Commenting on the Chinese economy, he said it was destined to slowdown as there had been overheating on infrastructure and credit.

He said re-balancing in the global economy was inevitable as the dollar was likely to weaken in the international market because of its high current account deficit.

"The U.S. centric global growth is no longer sustainable and America's massive current-account deficit speaks of a world that needs to find a new recipe for growth,'' he said and referred to the "global decoupling'' thesis.

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