(AFP) – Mar 11, 2009
GENEVA (AFP) — US economist Joseph Stiglitz on Wednesday warned that stimulus plans launched by governments were "too small" and "too slow" and said the West should help developing nations through the crisis.
The 2001 Nobel economics laureate underlined that the 787-billion-dollar plan passed by the US Congress last week was insufficient compared to the millions of people who are expected to become unemployed.
"We need a larger and better designed stimulus," Stiglitz said at a press conference in Geneva.
"The responses of governments are too small, too slow," he said.
Stiglitz, a frequent critic of globalisation and unbridled free markets, is heading a UN special commission on the global crisis, which is primarily aimed at finding solutions for developing countries.
He outlined some of the recommendations the commission is likely to present in the coming weeks, before the meeting of the G20 group of nations to discuss the financial crisis in London on April 2.
They include western aid to help developing nations out of the crisis, better market regulation, a reform of central bank practices and of international financial institutions, as well as the creation of a new structure such as a United Nations economic council.
"We very strongly support the view that there is a need for a strong stimulus by all the countries in the West but we highlight that the developing countries don't have the resources to engage in the necessary contercyclical policies."
As a result, developing countries needed "substantial assistance" from rich nations.
Stiglitz described it as "a matter of social justice, it's also a matter of the interest of industrial countries."
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