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Stiglitz sounds India 'image' alert

American economist Joseph Stiglitz today voiced concern that the NDA regime's action against non-government organisations and Jawarharlal Nehru University students had hurt India's image among investors.

By OUR SPECIAL CORRESPONDENT in Bangalore
  • Published 7.07.16
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Joseph Stiglitz at the media interaction in Bangalore.
Bangalore News Photos

Bangalore, July 6: American economist Joseph Stiglitz today voiced concern that the NDA regime's action against non-government organisations and Jawarharlal Nehru University students had hurt India's image among investors.

Although the Nobel laureate clarified that he had not studied the two issues in depth, he said they had led to an "image problem" as India was being seen as part of a club - comprising Egypt, Russia and Turkey - notorious for action against civil society and university students.

"That's not the same group of countries you want to be in," he said at an event organised by Azim Premji University.

Stiglitz, who teaches at Columbia University, and Branko Milanovic, a Serbian-American economist from the City University of New York, were in the city for a talk on "Global Inequality: Causes and Consequences".

"Organisations like Ford Foundation have played important roles in the development of India for decades. So it should be of concern when NGOs are subjected to conditions that make it difficult for them to function," Stiglitz said.

He said the international community was already making judgments about India because of the controls imposed on NGOs and the arrest of JNU students on charges of indulging in anti-national activity, which had led to protests on other campuses.

"The important thing to realise is that if India wants to grow as an open economy, as part of an international community, these events have created an image problem," said Stiglitz whose books, The Great Divide and The Price of Inequality, are bestsellers.

The 2001 Nobel winner, however, had some good words to say about MGNREGA, the rural employment guarantee scheme. "It is the single most innovative programme (by India) for the rest of the world," he said.

But he cautioned Indian planners against focusing too much on inflation. "Make sure your economy grows at a rapid rate. Excessive focus on inflation almost inevitably leads to higher unemployment levels and lower growth and, therefore, more inequality," said the economist known for his studies on inequality in global economies.

Stiglitz was particularly scathing about Republican presidential nominee Donald Trump and his strong views against free trade, the very foundation of American economic policy for years.

"I certainly think he's a very big risk for the global economy," said the professor, adding that Trump had already caused a lot of damage with his stand against free trade and proposed protection of US jobs.

"He represents a force of instability in global financial and trade systems," Stiglitz said.

He cautioned Prime Minister Narendra Modi against backing any trade agreement involving generic drugs with the Barack Obama administration.

"Obama is a lame-duck President, he has only a few months in office," Stiglitz said, urging India to wait as Democratic nominee Hillary Clinton had already expressed her opposition to the 12-nation Trans-Pacific Partnership, and the Trans-Atlantic Trade and Investment Partnership, whose main purpose is to keep China at bay.

Stiglitz said Asia should write its own rules. "One of the arguments put forward in the US is about maintaining American hegemony in Asia. Obama said 'who is going to write the rules of trade in Asia?'.

"The response of Asia should be... Asia should be writing its own rules and not the US," he said.