Blog: Don't blame the west for the mess, PM

The Prime Minister Dr Manmohan Singh made these comments recently: "Rich nations must orderly exit unconventional monetary measures" and, "Emerging economies (are) facing adverse impact of capital outflows".. I think this is the first time that the PM is criticising the West (and the biggest guilty party is the U.S.) for its unconventional monetary policies like Quantitative Easing (QE). In a way it's just an excuse. The logic is - a lot of 'hot money' came into India due to all the printing in the U.S., this inflated asset prices, caused inflation, lead to outflows and now a currency crisis. While, it is true that investors' decision to sell emerging currencies and buy the US dollar reverses the events that occurred three years ago. So the broad inference is true.. But it raises 2 pertinent questions:. Isn't it futile and silly to expect the West to frame monetary policies, keeping in mind the impact it will have on emerging markets. India and other emerging markets had the choice to curb 'hot' inflows when QE was implemented. They chose to do nothing. . A bit of background, when QE was implemented, other nations did criticise the quantitative easing programs as backdoor attempts at currency devaluation. Brazil fiercely objected to QE, arguing that capital inflows from the U.S. would threaten the healthy development of its economy. As a result, the U.S. was forced to sanction the use of capital controls and currency intervention by countries seeking to ease the impact of QE on their economies.. The opinions expressed here are the personal opinions of the author. NDTV is not responsible for the accuracy, completeness, suitability or validity of any information given here. All information is provided on an as-is basis. The information, facts or opinions appearing on the blog do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.

Blog: Don't blame the west for the mess, PM

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