Interview: China's economic stimulus package "right step at the right time"

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By Wu Zhiqiang, Yang Lei

WASHINGTON, Nov. 14 (Chinese media) -- China's recently announced economic

stimulus package is "a right step at the right time," Mansoor Dailami, a senior

economist at the World Bank, said on the eve of a Group of 20 (G20) summit on

financial markets and the world economy.

"China showing the desire to coordinate in terms of stimulating the world

economy at this very critical moment is something that should be noted,"

Dailami, manager of international finance of the World Bank's Development

Prospects Group, told Chinese media in a recent interview.

The package "will be considered a right step at the right time, and

hopefully, with the right outcome," said Dailami, a 22-year veteran at the World

Bank.

Dailami, who is responsible for the monitoring and analysis of the whole

spectrum of private and official flows to developing countries, is a well known

expert on infrastructure development and finance, emerging bond markets and

emerging corporate finance.

　　"RIGHT STEP AT RIGHT TIME"

"It was announced at the right time," Dailami said of China's

4-trillion-yuan (about 586 billion U.S. dollars) stimulus package, which was

announced last Sunday, about one week before the G20 summit scheduled for

Saturday in Washington.

"In terms of the magnitude obviously it is quite large," he said. "It comes

up to close to 15 percent of the GDP this year, but it's going to spread over a

number of years, until 2010."

Dailami said the size of the stimulus package as a whole is large enough to

help restore confidence.

He said the latest round of financial crisis has dealt a major blow to

official and private flows of capital to developing countries.

Private flows into emerging market economies, estimated at 1.1 trillion

dollars in 2007, could drop to 800 billion dollars in 2008 and probably 600

billion dollars in 2009, the economist said.

　　"SINGING IN HARMONY, SINGING THE RIGHT SONG"

Dailami, who earned his master's degree from the London School of Economics

and his doctorate in economics from Harvard University, sees "promising and

encouraging silver linings" emerging from the current financial crisis.

He said he was heartened by the degree that "the international community is

singing in harmony, is singing the right song, and that they are taking every

action possible."

"Every crisis has created other opportunities to them," Dailami said. "We

need to make sure that every action is taken in a harmonious and coordinated

manner, to make sure that the cycles turn upward."

He said the cycles will turn upward, "maybe not in the next year, but

definitely by 2010."

BEGINNING OF PROCESS

Dailami said the G20 summit on financial markets and the world economy is

obviously the beginning of a process.

He expected that at the summit there will be some discussion in several

areas in which different groups of countries are pushing to develop a program of

action. "We should at the same time be very realistic," he added.

Dailami noted that the whole institutional framework of global financial

markets and global economy under the Bretton Woods systems took a long time

before being finalized in the 1940, with discussions starting in 1942 and

arrangements sealed in July 1944.