US has huge stake in closer ties with India: Geithner

By Arun Kumar, IANS,

Washington: The US has huge mutual stake in closer economic ties with India and a key focus of Treasury Secretary Timothy Geithner’s visit to New Delhi next week will be cooperation in the Group of 20 leading economies on three core areas: global growth, global recovery and financial reform.

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“It’s about putting in place higher standards globally for constraining risk taking across the major institutions as markets become more integrated,” Geithner said in an interaction in his office with select Indian media ahead of the trip starting Tuesday.

While they were working very closely on things like climate change, energy policy, multi-trade agenda and terrorist financing, Geithner said: “We want to make sure that we are working together to reinforce that process of recovery, of expansion.”

“China and India are ahead of the major economies, the US is ahead of the other major economies and the balance of policy is going to shift over time, but we’re going to make sure we’re doing that carefully together so we don’t risk undermining the process of recovery and reform.”

Another reason for the trip to India, Geithner said was “to get a better sense of what is happening there: Both in the economy and the broader reform process in the financial sector and elsewhere.”

“And of course as always I am going to make sure that the leaders in India get to understand directly from me how we

are managing our challenges here and how things feel here.”

Geithner said he had “huge admiration” for India’s politicies in the economic, financial sector and for Prime Minister Manmohan Singh “and have great admiration for what they have accomplished in dealing with this difficult time.”

The US, he said, wanted “to build a much stronger corporative partnership with India on broader global financial issues, which I think are important to, both our countries interest economically.”

On India’s pitch for greater weightage at the International Monetary Fund (IMF) as part of reforming the architecture of the financial system, Geithner said the US had initiated and committed to support a substantial rebalancing of the basic voting rights across institutions.

On the issue of deepening capital markets in India, Geithner said: “I think they recognize that they’re not at the end of the process of reform in the financial sector, there’s a range of things that’ll be in India’s interest to manage through going forward and I want to get a better sense o how they’re going to do that.”

“I don’t actually sense a lot of tension or disagreement with India on the core parts of global financial reform, but that doesn’t mean it’s not worth talking about it because it’s good for both of us to be close on these things,” he said.

Asked about some countries questioning the salience of the dollar, Geithner said: “The dollar’s role in the system overtime in the future is going to depend primarily on how well the US manages our economic challenges.”

“My general view on this is if we do that right, it is better for the world and we will have a more stable global financial system.”

The differences in the US economic strategic partnership with China and the one it was going to launch with India “are mostly defined by the differences in our economies.”

“We believe we have a huge mutual stake in closer economic ties, integration and we have a very strong interest in working together closely in the G-20 international institutions in pursuit of common interest for reform.”

(Arun Kumar can be contacted at [email protected])