Kolkata, Jan 12 (IANS) Nobel laureate economist Joseph Stiglitz Thursday said India does not have a “clear roadmap” for where it is going, and argued against fuller capital market liberalisation saying the evidence was that it leads to more instability.
Addressing the 46th convocation of the Indian Statistical Institute (ISI) here, Stiglitz said: “There is no clear roadmap for where India is going today. Fifty years from now, does it see itself much as it is today – a divided country, with the rich much richer, the poor perhaps a little better than they are today? Does it see itself evolving like the US, where even the middle class has not been sharing in the gains of growth?” He cautioned that full capital market liberalisation in the country could result in economic instability.
“there are those in India who have been arguing for fuller capital market liberalisation. The evidence is that such liberalisation does not lead to faster growth, but does lead to more instability, and that the poor and small business bear the brunt of the cost of that instability,” he added.
He also said the Occupy Wall Street movement has brought forward a “ringing set of complaints” about economies and democracies in the world.
“The Occupy World Street movement (and protests in Spain and elsewhere around the world) have brought forward a ringing set of complaints about our economies and democracies. Markets are not working the way they are supposed to,” Stiglitz said.
“Demand is supposed to equal supply, including in the labour market, but we have millions without jobs, and a vast underutilisation of resources – in a world with vast unmet needs, to fight poverty, to promote development, to retrofit the global economy for global warming,” he said.
“In the US, millions have been thrown out of their homes in a foreclosure process that has undermined America’s claim to be a country of the ‘rule of law’. We have empty homes and homeless people,” he stated.
Stiglitz, a professor of the Columbia University, said everyone was supposed to benefit from the prosperity that markets and globalisation brought out, but unfortunately that has not been the case.
“Rather than trickledown economies, we have trickle-up economies. Those at the bottom-and increasingly in the middle – are worse and worse off,” he stated.