Prof Stiglitz calls for caution in coping with globalisation

Ficci NEW DELHI. The Prime Minister, Dr. Manmohan Singh, has exhorted the leadership of developed nations is to liberalise immigration and the movement of labour, remove trade-distorting agricultural subsidies and intensify efforts to make trade more development-oriented to ensure that globalization works for all. Inaugurating the National Seminar on ‘Making Globalisaton Work: An India Perspective’ with Nobel Laureates Professor Joesph Stiglitz, Professor Amartya Sen, and Lord Meghnad Desai, the Prime Minister said: When we talk of ‘globalisation" and of a "borderless world", the focus has largely been on the movement of goods, capital and, largely, financial and logistical services. There is as yet no framework for the movement of people. On the other hand, developed economies are becoming more restrictive with respect to immigration and movement of labour. Even economic theory has largely focused on merchandise trade and capital flows, paying little attention to the economics and politics of migration in the modern word." The National Seminar, the fourth in the series of such annual engagement with leading economic thinkers, was organized by FICCI and SRC (Shri Ram Centre for Industrial relations and Human Resources) and supported by the Planning Commission, German Technical Cooperation (GTZ), ILO, The World Bank and UNDP. 'Making Globalisation Work’ is Prof. Stiglitz latest book in which he pinpoints why globalisation has not worked in the way it set out to do, and offers prescriptive solutions to make globalisation work better. The Prime Minster made clear that subsidies distort trade and in the case of agricultural subsidies offered by the developed industrial economies, these not only distort trade but destroy lives and declared: " We cannot continue to live in a world of ‘butter mountains’ and ‘rovers of milk’, liberally funded by government subsidies, when the poor starve in the villages of the Third World." Prof Stiglitz Endorsing Prof Stiglitz’s view that neither the developed economies nor the developing world can afford to ignore or reject globalisation, Dr. Manmohan Singh said: "We have to learn to deal with (globalisation), cope with and manage it. Apart from managing both the economics and politics of globalisation, "I would go one step ahead and say that we must also manage its cultural and intellectual consequences. These have to be managed in a democratic way…and we must also accept the obligation of democratizing national and local governance," he emphasized. The Prime Minister said while the economic consequences of globalisation and the management of economic globalisation has come to the fore, not much attention has been paid to the politics of globalisation and its political management. He said the UN has so far not succeeded as a political instrument of managing globalisation and "it will not be able to succeed unless it reforms itself as an institution and its own management is more democratic and more representative." Responding to the observations by the Commerce and Industry Minister, Mr. Kamal Nath; FICCI President, Mr. Saroj Kumar Poddar and Chairman, SRC, Mr. Vinay Bharat Ram, Prof Stiglitz pointed out that coping with globalisation required a "vision of what development is all about." It was about releasing that globalisation was being used to weaken social protection, that the IP regime in TRIPS was tempered by the US in deference to the dictates of special interest groups in the US, that it was important to open financial markets and regulation to channelise the flow of capital to small and medium enterprises." He advised developing countries like India to create an IP regime that recognizes that knowledge is a public good and that it is inefficient to restrict the use of knowledge. Prof Stiglitz said in the Doha Round of trade negotiations, the developed countries reneged on their promises. "The US doubled its subsidies, then offered to cut them back to their original level." Such double standard was also manifest in the report to predatory pricing "where you allowed companies to sell below cost to drive away competition and emerge as monopolies," he pointed out. prof sen Prof Amartya Sen underscored the critical need for collaboration between nations to address the issue of inequality, a point that Prof Stiglitz was brought out effectively in his new work. At the national level, he said it was important to encourage NGOs so that people have access to global thinking and processes.

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