Genesis Morocco

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Genesis Morocco

Project Genesis is a strategic sustainable development framework for Morocco to translate from being a net importer of energy and a country facing water shortage issues, into the number one producer both of clean renewable energy and water in the region.

Thursday, December 27, 2007    <<Home

Q & A with Joseph Stiglitz Oct 11 2006

Joseph Eugene "Joe" Stiglitz (born February 9, 1943) is an American economist and a member of the Columbia University faculty. He is a recipient of the John Bates Clark Medal (1979) and the Nobel Memorial Prize in Economics (2001). Former Senior Vice President and Chief Economist of the World Bank, he is famous for his critical view of globalization, free-market economists (whom he calls "free market fundamentalists") and some international institutions like the International Monetary Fund and the World Bank. In 2000 Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001 he has been a member of the Columbia faculty, and has held the rank of University Professor since 2003. He also chairs the University of Manchester's Brooks World Poverty Institute and is a member of the Pontifical Academy of Social Sciences.*

Q. What is the future of globalization where there is an increasingly greater disproportion between the movements of capital and goods and that of people ?

Nabil El Aid El Othmani

A. This disparity in the liberalization of capital and labor is a major problem. Enormous energy has been focused on facilitating the flows of investment and capital, while movements of labor remain highly restricted. This is so, even though the gains to global economic efficiency from liberalizing labor flows are an order of magnitude greater than the gains from liberalizing capital flows. Indeed, liberalizing movements of short term speculative capital has been associated with increased instability, but does not bring enhanced economic growth. (Premature capital market liberalization was the basic cause of the East Asian crisis of 1997.)
This disparity has large distributional consequences. Because capital can move easily, it threatens to leave a country if it is taxed, or if wages are not tamed, or worker benefits are not cut. The disparity in liberalization is one of the reasons for the growing inequality in incomes that have marked most countries around the world. It is one of the reasons that even when globalization has brought increases in GDP, it has led to the lowering of incomes of many workers.
There is a risk that unless globalization can be made more fair, so that there are more winners and fewer losers, there may well be a back lash. We should remember that globalization is not inevitable. The degree of global integration, as measured, for instance, by the ratio of trade or capital flows to GDP, was higher before World War I than during the interwar period.

*Bio source