A topical change for Citi's Pandit: world growth
Vikram S Pandit, the chief executive of Citigroup, must have welcomed the chance on Monday to talk about something other than the challenges facing his bank and the overall financial industry.business Updated: Apr 27, 2010 23:11 IST
Vikram S Pandit, the chief executive of Citigroup, must have welcomed the chance on Monday to talk about something other than the challenges facing his bank and the overall financial industry.
In a speech, Pandit said he believed the world should embrace the "US model" of development in order to foster long-term and sustainable economic growth. At the same time, the world should no longer depend solely on US consumers to soak up their goods as cheap credit is a thing of the past.
"There may be some of us who cannot help but wonder whether the economy is gaining enough momentum to escape a double-dip. I believe we are likely to avoid slipping backward," Pandit told the 2010 Global Financial Forum in New York.
"Therefore, the most important challenge is to achieve sustained economic growth on a global scale soon, and that is much more difficult."
Pandit argued that the world could create a healthy and sustainable economic growth throughopen trade markets, flexible exchange rates and free labour markets.
"If this were the case, these imbalances would be corrected rather quickly, and the result would be a more broadly distributed sustainable growth rate around the world," Pandit said.
"Let's be realistic: This is very unlikely to happen. We must find a robust self-help programme for the interim."
The elements to unleash this "magic formula," in today's environment consist of six main themes, he said.
First is fostering talent through the creation of large, well-funded universities. Second is a globally competitive tax and industrial policy. Third is an energy policy that reduces inefficiencies and energy costs with limited environmental impact. Fourth is the formation of a public-private partnership to strengthen the nation's infrastructure. Fifth is the will to address fiscal imbalances with discipline.
And last is confidence in the financial markets.
"Strong regulatory reform can create confidence in the markets and trust in the financial system leading to the availability of funding."
The New York Times