Economist attacks deregulation, debt consumption

UNITED NATIONS: More than just a talking shop. (Getty Images)

The United Nations is the only institution with the legitimacy to oversee democratic reforms of the global economic system to pull the world out of the current recession, according to Nobel prize-winning economist Joseph Stiglitz.

The UN has a crucial role to play in addressing the roots of the downturn and in reshaping the global economy into a more fair and sustainable system, he said at the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand, WAM reported on Saturday.

"As this is a global crisis, a small group of industrialised countries are ill-equipped to deal with it," he said.

"There are 192 countries in the world, [and] 20 is a small percentage," he added, referring to the so-called Group of 20 (G20) industrialised countries.

"Obviously what is necessary to respond to the crisis is not a G20 but a G192."

The economic system prior to the current crisis - characterised by excessive financial deregulation coupled with massive consumption financed by debt - is unsound and must be reinvented, Stiglitz said.

"As we think about this crisis - and we think about the world that will come after it - we should think about how we can create a global economic architecture which works better, for more people, in a more sustainable way."

Earlier this year, ESCAP called for the drastic overhaul of international financial structures and urged the setting up of an elected Global Economic Coordination Council, as part of the UN, to meet annually to assess developments.

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