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India, China and Russia have "squandered" capital by financing inefficient technologies, the United States Federal Reserve Chairman Allan Greenspan has charged.
"The very high savings rate of the Soviet Union, of China and that of India in earlier decades, often did not foster significant productivity growth in those countries," Greenspan said on Thursday, while addressing a conference oragnised by the Federal Reserve Bank of Chicago.
"Savings squandered in financing inefficient technologies does not advance living standards," he said, adding, "Though saving was a necessary condition for financing the capital investment required to engender productivity, it is not a sufficient condition."
However, he pointed out that despite importing capital because of low savings rates, the US had used it efficiently.
Highlighting that production of traded goods had expanded rapidly on economies with large low-wage forces, Greenspan said most prominent were China and India, which over the past decade have "partly opened up to market capitalism."