Monday, April 30, 2012

Globalisation and its discontents by Joseph Stiglitz

I first heard Joseph Stiglitz speak at the World Social Forum at Mumbai, India. What he said made a lot of sense. He had captured the pulse of the developing countries arguments against free trade, which highlighted the hypocrisy being advocated by the West.

Remove free trade barriers, introduce capital account convertibility, free market exchange rates, allow foreign direct investment, tighten monetary policy, introduce fiscal austerity measures - these are all part of the agenda being pursued by the IMF and World Bank.

However, the real issues, like unemployment, lack of institutions and institutional capabilities, property rights and judicial structures - all these need to be tackled along with these reforms being advocated. You cannot call for removal of food subsidied when your population is living on subsidised food and cannot afford anything else. It would be naive to blame developing countries for poverty in agriculture, when it is the very same agricultural sector in the developed countries that is being subsidised heavily, keeping international prices of the commodities low and hence, the farmes in the developing countries impoverished.

After all, one neeeds to take a decision - what kind of world are we aiming for?

Stiglitz's book is seminal in the field of understanding globalization.

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