[x-pubpol] Avoid mistakes of the West: Stiglitz

[Joly MacFie]

[via Avri Doria]

http://www.nationmultimedia.com/business/Avoid-mistakes-of-the-West-Stiglitz-30202103.html


Kingdom needs its own growth model, must opt out of TPP, Nobel laureate advises

Emerging markets including Thailand, other Asean countries and China
should "decouple themselves from Western markets", Nobel laureate
economist Joseph Stiglitz said during a speech in Bangkok yesterday.

To be able to grow, emerging markets must be less dependent on
exports, boost domestic consumption and find their own model of
sustainable economic growth, the US economist said.

Stiglitz said the most serious questions facing the global and
regional economies were whether the euro zone would survive; whether
the European Union would drop the austerity policies that have caused
recession and switch to a policy of growth; and whether the US will be
able to move beyond its current gridlock. Stiglitz expected not more
than 3 per cent growth in the US in the near future, adding that the
country needs to reduce its significant unemployment level. But full
employment was not in sight this decade, he said.

"It's going to be a long time before we can get back to what I may
call normal," he said.

He also expected emerging markets, China in particular, to be able to
decouple their economies from Western economies and develop in a
sustainable way.

Stiglitz was speaking during an on-stage interview with Nation
Multimedia Group chairman Suthichai Yoon. He earlier gave a lecture on
the global economic outlook as part of an international academic
seminar at Dhurakij Pundit University.

The Nobel laureate opposes austerity measures, saying they had proven
to lead to recession and depression. To avoid repeating developed
countries' mistakes, newly emerging economies should invest in
education, technology, the environment and public health and find a
sustainable model of economic growth, he said.

"Focus on quality of growth, environment, living standards and how the
benefits are shared," he said.

US innovations had contributed in part to the country's current
economic instability. The innovations were created to save labour
costs, but now unemployment rates are problematic, he said.

The US and European countries, as well as Japan, also need structural
and educational reforms, but implementing them was difficult now that
they were facing economic problems, Stiglitz said.

"From the point of view of the region and from the point of view of
the planet, it's going to be very important for China to develop a new
model of economic growth, because if it imitates the economic growth
of the United States based on [unchecked] consumption and material
goods, our planet won't survive," he said.

Discussing the problems in the euro zone, he voiced opposition to the
idea of a common currency - a direction in which Asean might be
heading.

"If you go down the common currency [route], that is a bad idea. You
need to talk about Asian cooperation," he said. "Sharing a currency
takes away the ability to adapt, to adjust," he said.

"A common market is a good idea; while the issues of the market are
relatively small, they can still benefit from economy of scale."

Stiglitz said corporations' lobbying of politicians was standing in
the way of resolving economic problems.

He also warned that the Trans-Pacific Strategic Economic Partnership
(TPP) that the US is trying to reach with other countries is
dangerous.

"While negotiations are behind closed doors, cooperation is on the
table," he said.

Drug companies, for example, are among the corporations lobbying
politicians in secret negotiations, he said.

"The objective [of drug companies] is to make profit. The way they do
this is to make you pay high prices even though the basic research is
paid for by the American government," he said.

"They are very bad for the development of generic drug industries.
Thailand is one of the good countries in this area. It would be a
mistake for you to give up on that. And if you join the TPP, you will
have to," he said.

During his visit to Thailand last year, US President Barack Obama
tried to convince Thailand to join in the TPP.

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