Last year's Nobel Laureate for economics is calling on the International Monetary Fund (IMF) to change its policies to bring more prosperity to developing nations. Joseph Stiglitz has tied the organization's approach to growing hostility toward globalization.
The International Monetary Fund [IMF] was established in 1946 to promote international financial stability and to foster economic growth. In a new book, Globalization and its Discontents world-renowned economist Joseph Stiglitz charges that the IMF is doing just the opposite.
Speaking to the private Council of Foreign Relations in New York, Professor Stiglitz called for changes to IMF policy.
Although 183 countries are members, Professor Stiglitz claimed the IMF puts the interest of the United States, its largest financial contributor, above the poorer nations it was designed to serve.
"The decisions of the IMF affect the lives and livelihood of millions of people. And yet there is only one voice being heard," he said. "There is one country and one country alone in the IMF that has the veto power. And so it's not surprising that decisions that get made reflect the particular perspectives and ideologies and interests of those groups, which dominate within its governing structure."
He argues that the traditional IMF policy of using government spending to stimulate an economy during a recession is not applied to third world member nations, sometimes leading to economic crises. He said, "It did it in East Asia and that led to the deepening of the recession and turning recessions into depressions, turning depressions into social turmoil."
Mr. Stiglitz says much of the growing hostility toward globalization stems from the perception that the developed world has not opened its markets to developing countries.
And although much of Latin America has experienced economic gains since the 1980s, he says wealth has not been evenly distributed. "Much of the benefit, most of the benefit, has gone to the upper 30 percent, and of that most of the upper 10 percent," noted Mr. Stiglitz. "The people at the bottom, the very poor, have actually seen their incomes fall."
The International Monetary Fund rejects Mr. Stiglitz's accusations. An IMF spokesman told VOA that Mr. Stiglitz's arguments are flawed. He called the book Professor Stiglitz's "latest diatribe," describing it as "popular economics."
Mr. Stiglitz won the Nobel prize for economics last year and served as chief economist at the World Bank and as an economic advisor in the administration of former U.S. president Bill Clinton.