The sage advice at Davos came from the Deputy Chairman of India's Planning Commission, Montek Ahluwalia who suggested to the captains of finance in the west to invest in the emerging market economies that are readily offering returns averaging 6 to 8%. He further cautioned against investing in highly complex financial instruments, such as derivatives, who he termed as opaque.
Montek Ahluwalia, a senior Indian policymaker who is deputy chairman of his country's planning commission, suggested that instead of repeating their ill-fated quest for ever more opaque derivatives, banks should direct their money towards rapidly growing nations – citing growth rates of 6% to 8% forecast for India and China this year.
"If they really want high returns, that's where their capital should go," said Ahluwalia. "We will not be helped if too much financial innovation is producing instruments that aren't competitive and which we know are actually hugely risky."
Davos summit leaves David Cameron and George Osborne feeling bruised | Business | guardian.co.uk
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