The ongoing global financial and economic crisis is perhaps a blessing especially to the developing and under-developed countries. It helps to bring to the fore the many anomalies existing in the world economies under the pretext of globalization. The call for globalization which was primarily aimed at bringing equal opportunities for all to compete has not sincerely been true to the letter when it comes to the actual implementation. In reality it merely another form of power wielding instruments by the powerful economies on the poor struggling economies. What we have seen over the years is that the concept of the "global economy" is very often an exaggerated one, generating confusion and negative political consequences to the less developed economies..
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Reforms that are both necessary and feasible at the national level, such as appropriate exchange rate, fiscal and monetary policies (especially in normal times) or capital controls, are rejected as incompatible with the "global economy". Developing and impoverished nations are often tasked to look to supra-national institutions that are mainly deregulatory, unaccountable and regressive – the International Monetary Fund, World Bank and World Trade Organization are prime examples – to resolve the problems that these institutions have themselves helped to create. They are expected to tow the lines of the developed nations through various arm twisting strategies by such institutions and yet their country’s economies remain in a mess and they eventually lose total ownership of not only their economy but also their country’s policy and direction. It is at times being used to affect regime change or governments that are considered as not “western friendly”. It is another form of colonization in its “ugliest” form.
But the day the world economy was at risk of facing global recession, the powerful economies asked others to get their act together. Policies which are taboo under the eyes of the supra-national institutions before such as government bailout of private companies, is okay for implementation by the rich nations in facing the bankrupt and screwed up financial institutions. The current world recession is much worse and more widespread than the crisis of the late 1990s. The high-income countries that comprise the majority of the world economy, including the US, EU and Japan are mostly in recession. And there are major weaknesses in much of the world's financial system that must be urgently addressed in a transparent manner. It is good that the G20 leaders are at least talking about increased international co-operation in order to deal with the world recession, and there are some areas – such as regulation of the financial sector or preventing illegal international capital flows and international tax avoidance – where increased international co-operation can be especially helpful. But it must be fair and transparent. Developed nations should not only condemned protectionism and but must remain committed themselves not to engage in it. Unfortunately, a World Bank study notes that 17 of the 20 countries have actually undertaken new protectionist measures. So how could they expect others to not engage in protectionism when that is what they are doing to save their economy?
The international community must use this opportunity to regulate and iron out irrationalities and instabilities inherent in the so-called "global economy". There must be concerted efforts to redraw the rules for global commerce in a more equitable and rational manner – such as those of the UN commission headed by Joseph Stiglitz – are a vital part of creating a better future for the generations to come. But the world cannot wait for the time when the governments of the rich countries are willing to cede decision-making power to institutions – such as the United Nations – that they cannot completely dominate.
Let us all jointly work toward a fair, equitable and transparent global economic and financial agenda.
But the day the world economy was at risk of facing global recession, the powerful economies asked others to get their act together. Policies which are taboo under the eyes of the supra-national institutions before such as government bailout of private companies, is okay for implementation by the rich nations in facing the bankrupt and screwed up financial institutions. The current world recession is much worse and more widespread than the crisis of the late 1990s. The high-income countries that comprise the majority of the world economy, including the US, EU and Japan are mostly in recession. And there are major weaknesses in much of the world's financial system that must be urgently addressed in a transparent manner. It is good that the G20 leaders are at least talking about increased international co-operation in order to deal with the world recession, and there are some areas – such as regulation of the financial sector or preventing illegal international capital flows and international tax avoidance – where increased international co-operation can be especially helpful. But it must be fair and transparent. Developed nations should not only condemned protectionism and but must remain committed themselves not to engage in it. Unfortunately, a World Bank study notes that 17 of the 20 countries have actually undertaken new protectionist measures. So how could they expect others to not engage in protectionism when that is what they are doing to save their economy?
The international community must use this opportunity to regulate and iron out irrationalities and instabilities inherent in the so-called "global economy". There must be concerted efforts to redraw the rules for global commerce in a more equitable and rational manner – such as those of the UN commission headed by Joseph Stiglitz – are a vital part of creating a better future for the generations to come. But the world cannot wait for the time when the governments of the rich countries are willing to cede decision-making power to institutions – such as the United Nations – that they cannot completely dominate.
Let us all jointly work toward a fair, equitable and transparent global economic and financial agenda.
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