Asia has to be prepared to play a critical role in the new global economic scenario, which is set to emerge once world economy starts recovering, Lord Meghnad Desai, Professor Emeritus and Member, House of Lords, London School of Economics said.
Questioning the accuracy and efficacy of the International Monetary Fund and the World Bank, he added these institutions also need to be restructured.
“Every crisis throws up an opportunity. Here’s an opportunity to restructure global economics and Asia has to be prepared to be part of it,” he said at a function organised by Cornell University and Institute for Human Development. He underlined that the world would be globalised under new terms.
Joseph Stiglitz, Nobel laureate and preofessor, Columbia University, pointed out that a systematic systemic remedy is key at this time.
Speaking on the occasion, Edmund Phelps, Professor, Columbia University and Nobel Laureate said it is difficult to come up with a global prescription for the downturn.
“It is hard to solve the problem.. there is one ailment after the other,” he said, adding that the crisis has been marked by a complete collapse in the housing market and there has been collateral damages to the entire banking system.
Stiglitz also said the measurement of GDP is flawed as it failed to reflect the state of affairs in the US. He added that 3.6 million American have already lost jobs while many more are likely to lose theirs in the coming months.
“There is asymmetry in macro economic policies between developing and developed countries,” he pointed out. He underlined that bad lending decisions by financial institutions have led to the crisis.
Asia driven by India and China, added that 400 million workers into the global map, Desai pointed out. He said that this was a long lasting boom period which lasted for 15 years and for the first time, Asia was part of the process.