Speaking at the first business session of the 47th Annual Meeting of ADB Board of Governors in Astana (Kazakhstan), Chidambaram also stressed upon the need to increase resources of the Asian Development Bank for lending, an official statement said.
"Policies to revive growth in most emerging markets, including India, will have to be rooted in increasing investments, particularly in infrastructure. As most emerging markets are resource constrained, it would be necessary to have recourse to foreign savings for investment," he said.
There is, however a need to ensure that the flows to emerging markets are broadly stable, he said, adding that the best option would be investment flows with a preference for FDI, followed by a hierarchy of other sources weighed against the cost of such dependence.
"The world economy is a little better placed now than a year ago. Global recovery appears to have strengthened in the recent months. However, we are yet to reach a stage where we can make a medium term forecast of a moderate growth," Chidambaram said.
According to him, in the emerging markets that have large net exports, the slowing of growth is due to weakness in advanced economies and there is a need in these markets to rebalance to domestic sources of growth.
In economies not so dependent on exports, there are various other factors, some local, other global, which require more deft handling and international cooperation, he added.