Joseph Stiglitz: 'Talk of poverty isn't taboo'

Joseph Stiglitz: 'Talk of poverty isn't taboo'

Nobel Prize winning economist Joseph Stiglitz wrapped up his second visit to Burma yesterday, having met with President Thein Sein and delivered a lecture on sustainable growth to more than a thousand people in the capital. The man renowned for pushing for a ‘Third Way’ in global economics – a compromise between socialism and free market policies – says he can understand why he has admirers among Burma’s new elite. In an interview with DVB, he speaks of his surprise that issues considered taboo during his December 2009 visit are now wide open for debate.

What are your impressions of the country now? Have any of the prescriptions for sustainable growth you gave in 2009 been implemented?

It was very different – the tone, the openness, the enthusiasm. We met with the president and a number of other ministers, and clearly a couple of them are very on tune, including the president – just very impressive. When I went there two years ago, one had to be tread gingerly around mentioning the word ‘poverty’, the renewal of human capital. But now the discussion was totally open, including about how to make the economy totally open. And they had actually done a number of things, like increasing the number of licenses so they’ve made a number of markets competitive that were not competitive before, which has had an effect, I gather, on prices – people who have looked at the prices say they’ve come down.

Then of course what they’ve been doing on the peace side has also been very impressive – you get the impressions that they’re committed to negotiating peace agreements [with ethnic armies]. There is on the part of a couple of groups a lack of trust, and it’s not going to be easy, but the government’s showing a flexibility that’s very impressive.

Do you feel now that they’re willing to act on your advice, even when it cuts into the government’s or elite’s economic interests?

One of the things that’s quite striking is that they had taken so seriously what I had said in my lecture in 2009 – they had remembered it, and they talked about how they were implementing many of these ideas. I gave a talk on Saturday and when I met with the president on Tuesday he had already gotten a summary of what I had talked about. So it was just very interesting – they’re very committed to making sure it’s a home grown programme but they very solicitous to getting outside advice and were very much concerned about the need for that.

The World Bank’s board will meet on Thursday to discuss plans for Burma. You’re well placed to understand the workings of the institution – what do you think they’ll propose?

I think they will approve what they call assessments – they aren’t probably yet in a position, because of US sanctions, to approve loans, and may offer certain kinds of technical assistance. But I think the Bank staff will want to reengage, but it’s only a worry about managing US congress. It would be a very important decision that I assume and hope they will take. Once they start engaging and assessing then I think it would be the beginning of a meaningful engagement.

There’s talk of a ‘race for Burma’ by donors and investors. The country’s in a vulnerable position – is there a threat of some sort of neoliberal hijacking?

Well I think the government is very aware [of this]. The problem in the past is that much of the investment has been in natural resources and electricity and very little has been in manufacturing, and other kinds of activities that create a lot of jobs. The good news is that Singapore had a delegation on Monday of about 170 firms that were interested in [Burma], and I think most of those are across a broad range of [sectors]. I think that the government and civil society – it’s now a very active civil society, and I gave a talk where 1000 people turned up, and they were just enormously interactive and attentive – [shows] that it’s a very different feeling now. And I talked about the natural resource curse and the problems with that, and it was clear that at least large numbers in the audience were very attentive to the issue.

Given the lack of enforceable business and environmental laws, should investment hold off for the time being, particularly in the historically destructive extractive sector which is focused largely in the fragile border regions?

Well another very impressive thing is that they’re trying to get peace settlements [with ethnic armies], and there seems to be significant progress with most of them. Things are moving very quickly and I don’t think I can really answer that question, but what people obviously want are what we could call ‘peace dividends’ in the form of employment and growth, and I think clearly what they need is something that goes beyond the extractive sector.

It strikes me that the government lacks the capacity to steer the country, and is relying on outside advice and reactions to almost feel its way along. Do you share this view?

I think there are certainly strong and positive forces in the government. One of the things that impressed me is there are a number of young people who are coming back, who are well educated. They’re very sensitive about the issue of capacity constraints and that is a great concern, but at the same time some of these young people that I’ve seen in both the government and private sector are very impressive. What happened in the last 15 years is a number of people got educated abroad, some of whom won’t be coming back but some of whom are, and that’s what was very impressive about this meeting on Saturday – [people like economist Hla Myint who spoke at the seminar] are people who’d been away for 40-something years and were coming back and there was a sense of excitement, and it was very moving.

Why is it you they’ve asked to visit twice now? Is there something particular about the ‘Third Way’ that appeals to them?

Yes I think they’re very sensitive about the ‘Third Way’ – it’s something they’re very interested in. They’ve got a lot of influence and a lot of interaction with ASEAN and it’s a kind of philosophy that’s much stronger in ASEAN, so I’m not surprised.

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