The Asian Development Bank has called for India and China to be ready to help rescue the eurozone from its sovereign debt crisis to avoid a long-term downturn that will stunt the growth of Asian economies.
Anand Sharma, India's minister of trade, said that "India will do whatever it can" to help the eurozone as its own economy was now suffering falling exports and a drying up of foreign capital inflows. "Nobody wants the eurozone to remain unstable and turbulent", he said. "We have monumental challenges and we have to sustain a high level of growth. It is not an option, it is an imperative, because where do we find employment for tens of millions of our young men and women."
Others argue that developing economies like India have no business helping wealthy Europeans when they face their own profound economic challenges. It would be politically very difficult to sell assistance to Europe to India's 1.2 billion people, of whom as many as 800 million live on about $2 a day or less. Ashutosh Varshney, a professor at Brown University, said: "Sometime they will find out that Greeks retire at the age of 50 and go on holiday to beaches and it won't go down well".
Mr Nag from the ADB said that the eurozone crisis threatened "significant knock-on effects" across Asia. The ADB's forecast of 7.5 per cent economic growth in Asia for 2011/12 now faced "risks on the downside" because of the threat from Europe. He said vulnerable emerging markets needed to make "contingency plans" to protect themselves from a downturn and significant capital outflows from their economies.
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