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Lord Desai jokes about his Marxist past
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'The real economy is still in great trouble. Not so much in India, but in America and Europe

As for the broader global financial crisis, Desai explained that the worst is over, but that many economies -- particularly in the West -- still must be restructured.

"No crisis is indefinite. There are always cycles in capitalism. Booms come to an end and slumps come to an end. This particular crisis was somewhat severe because there were two aspects to it. One was the financial system dysfunctioning, the instability in the financial system. And then the real economic crisis -- a real, ordinary, well-known recession, as it were," he said.

"The recession has been dealt with by Keynesian sorts of policies and so on. But the financial system going in meltdown required a recapitalization in financial system. [That aspect] was much more urgent and complex because of the toxic assets and all that. Now what it looks like is that that crisis, which has more or less been going on for about a year-and-a-half, and became severe with the Lehman Brothers collapse last September, is now finally being sorted out."

"We're on the up. Banks have been recapitalised. But the real economy is still in great trouble. Not so much in India, but in America and Europe. Very soon governments will have to pay much greater attention to the real economic crisis. Along the way, America for example, postponed the task of industrial restructuring."

"British economy went through that in the 1980s. America failed to do that. So the entire replacement of Detroit, it will be interesting to see how boldly Americans reconstruct Detroit, which is very necessary to do. Maybe that will make way for new green technologies. And America will also have to stop being afraid of outsourcing and things like that, and become a mature, confident country again."

Image: Lord Desai jokes about his Marxist past
Photograph: Hitesh Harisinghani
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