Prime Minister Manmohan Singh has spoken: the state of the United States is strong. The economy,which has just come out of recession,nevertheless,remained dynamic and more flexible than most others throughout the period which is why it has returned to growth quicker than many others similarly affected. Nor has at any point the possibility that the USs unparalleled status as the centre of the worlds innovation,and therefore the ultimate driver of increases in global growth and in the living standards of all,including the worlds poorest,ever been questioned by the sensible. But genuine concerns do exist: about the dollar in particular,driven by its unique status as the worlds dominant reserve currency,and the degree to which that serves as a prop to the US economy. In that context,recent statements from many parts of the world about how to end that status were,in effect,broadsides at the US government,and on the sustainability of its economic policy. Prime Minister Singh has wisely refrained from this sort of political point-scoring,sticking to the basic facts: the ideas that push the US economy have been questioned before; those questions proved to be irrelevant or unnecessary. The concern is temporary. The relevance of the American model,as Dr Singh put it with admirable nuance,remains great. And,since we have not entered an era in which economic strength is shifting,the question of moving away from the dollar whether or not that would be a good thing for the world,or for America does not even rationally arise. Not even the Chinese,as Dr Singh pointed out,are likely to wish it to happen. And India definitely should not; as long as the dollar is strong,Indian exports are competitive in the US. And the export sector,hit by global demand collapses,needs all the help it can get. It is time to move beyond such concerns. Yes,one day there might be a credible replacement for the dollar. But such things move slowly. It will require the US economy to be far less dominant,and inspire far less confidence in the average investor and central banker than it does today,for that to be the case. That day is not today. Dr Singh has effectively closed a debate that need never have been opened.
