Nobel Laureate Professor Joseph E Stiglitz is perhaps the best known critic today of globalisation in its current form. He stongly believes that the policies of the United States government are largely responsible for distortions in international trade flows. His corpus of work - including the path breaking Globalisation and its Discontents, which has sold more than 1 million copies - critiques these policies closely and offers fresh perspectives on the questions that shape the globalisation debate. The Hindustan Times caught up with him in Delhi on Monday. Excerpts from the interview:
Q. India has been witnessing eight per cent plus growth for the past three quarters. Do you think it is sustainable?
A: I do think it is possible to maintain the growth momentum. China has posted 9.7 per cent growth for the past few years. One of the advantages of the Indian economy is that there is still scope for improving productivity. There is a vast pool of educated people, ready to adapt to technology. In principle, I believe the country can go ahead rapidly.
Q. How can productivity be improved?
A: Improvements can be made by comprehensive application of education and technology. Innovation in the system can provide opportunities to large segments of the population. Better infrastructure, specially reliable supply of electricity, can be of great help.
Q. What initiatives are needed to bridge rural-urban divide?
A: Urban growth will always help the rural sector. It will release the pressure of the minimal supply of land, providing for higher rural incomes.
Q. You have blamed the corporate greed of the 1990s for the US's current economic woes. What lessons does this hold for India as it enters the boom phase?
A: It makes sense to have a strong banking and accounting system. The US's corporate greed grew emboldened because of excessive de-regulation. The stock market was booming due to excessive stock options and accounting manipulations. We were in a bubble and should have increased the margin money. This would have probably helped. Raising interest rates would have hurt the real sectors of the economy.
Q. There has been a deadlock in the Doha round of negoitations of the WTO. Do you think the situation maychange after the next US presidential election?
A: No, it is going to be very difficult, as the underlying sentiment for finding a solution to the agriculture issue is not strong in both the parties. I am very pessimistic about the Doha round and believe it will probably die.
Q. Are bilateral trade agreements the way ahead?
A: Bilateral pacts are worse because they are based on discrimination. The concept of trade multilateralism is non-discriminatory. Bush started bilateralism to destroy multilateralism. It would be a mistake for India to go down the same path.