Q1: How different is the current economic turmoil that India and the world is experiencing from the past ones?
Ans:
>We are in a world which is very different after February 24
>The pandemic had created a divergence between the advanced economies and developing economies
>The divergence was playing out in access to vaccines, scarring in terms of unemployment and GDP growth; and scarring from education losses
>Apart from inflationary pressure, new rises of fuel and food prices started impacting from Feb 24
>Since the Cold War, we have benefited from the ‘peace dividend’
>Don’t see a convergence between advanced and emerging economies — that is a new feature of the world
Q2: Are we heading towards yet another global recession and do you see it as a mild or strong one?
Ans:
>Possibility of a recession is true for the advanced economies
>After rapid price rises, central banks have reacted now, which triggered a recession
>We are not going to see a major recession like the global financial crisis
>It will be a recession of the more traditional type
Q3: The tension between India and China has increased in the past two-three years. Has it affected AIIB’s functioning and project funding in India, since AIIB is considered as a China-led bank?
Ans:
>The association of ‘China-led bank’ is unfortunate
>China has a quarter of shares in AIIB. Europe has another quarter. More than half is for other countries
>AIIB has played a positive role in rebuilding the relationship between India and China
>AIIB’s most important client by some stretch is India
>We have a problem because there may be too much activity in India. Markets don’t like too much concentration
 "AIIB's Erik Berglof on ongoing economic turmoil and more")
