Countries must make reducing inequality a priority if they are to boost economic growth, says Stiglitz- The Nobel laureate praised Mexico’s structural reforms, calling them “very impressive”
- Stiglitz spoke out against the Trans-Pacific Partnership, saying he “strongly opposed” the treaty
- For more information on the meeting: http://wef.ch/latam15
Riviera Maya, Mexico, 8 May 2015 – Nobel laureate and World Economic Forum on Latin America Co-Chair Joseph E. Stiglitz, Professor, School of International and Public Affairs (SIPA), Columbia University, USA, has urged government and business leaders to make the fight against inequality a priority. Stiglitz was speaking at the 10th World Economic Forum on Latin America, taking place in Mexico.
“We used to think there was a trade-off between equality and growth. Now we see the two as complementary. You will have stronger growth if you reduce the extremes of inequality,” he said.
Latin America’s success in reducing inequality over the past decade, precisely when the region became more integrated into the global economy and more exposed to international market forces, proves that the increased inequality seen in much of the rest of the world comes from policy choices, Stiglitz said.
Latin America must not give up the fight to reduce poverty and equality – even now when many economies are slowing and government budgets are under pressure – since this fight is crucial for long-term growth.
Stiglitz called Mexico’s recent round of structural reforms “very impressive” and said, “I’m very optimistic that these really will spur economic growth.”
By breaking monopolies, the reforms will lower consumer prices in sectors such as electricity and the telecoms industry, leading to greater spending power for lower income Mexicans. Lower utility costs will make Mexico more attractive for business investment, which will increase jobs and wages. The reforms will therefore help the country reduce inequality.
Stiglitz criticized the proposed Trans-Pacific Partnership. He cited the negotiations’ secrecy, the proposals that would make governments vulnerable to lawsuits over regulations that protect their citizens, and the proposed expansion of intellectual property rights, especially in the pharmaceutical sector. These expanded IP rights would upset the balance that the United States has already achieved in this area and lead to higher drug prices worldwide, bankrupting some public health systems and putting treatment out of reach for many, he noted.
“I am strongly opposed,” he said.
As part of the fight against inequality, Stiglitz called for measures to fight racial, ethnic and gender discrimination, and for measures to redistribute resources between richer and poorer parts of a country, such as Mexico’s north and south.
More than 750 participants are taking part in the 10th World Economic Forum on Latin America in Riviera Maya, Mexico from 6 to 8 May 2015. The theme of the meeting is “Advancing through a Renovation Agenda”.
The Co-Chairs of the World Economic Forum on Latin America are: Carlos Brito, Chief Executive Officer, Anheuser-Bush InBev, USA; Carlos Slim Domit, Chairman, América Movil, Mexico; Angelica Fuentes, President of Angelica Fuentes Foundation, Mexico; Eduardo Leite, Chairman of the Executive Committee, Baker & McKenzie, USA; Ignacio Sánchez-Galán, Chairman and Chief Executive Officer, Iberdrola, Spain; and Joseph E. Stiglitz, Professor, School of International and Public Affairs, Columbia University, USA.