Money? Spend it for future

Posted: ফেব্রুয়ারি 12, 2009 in Economics

Says Taiwanese Nobel laureate in an exclusive interview with The Daily Star

Free markets are on the skids. The once-unwavering belief in deregulation is at a low ebb. Champions of globalisation are shaken. The minted masters of the universe are now more inward-looking than ever before.

It is a time to reflect on the globalised economy and its failings, which seem inevitable in the financial crisis, says Taiwanese Nobel laureate Yuan Tseh Lee, a scientist and an unlikely critic of the world economy. The Daily Star caught up with Lee last month when he was in Dhaka to deliver lectures.

“It may be because of the financial crisis or environmental problems, it’s a good time to think about how the human society should move,” he says in a late-night interview.

Lee is not the one to set himself against globalisation, but not a defender of it either. From the current stage, globalisation should move one step forward — some little advice he has for the world, now hurtling from one crisis to another.

When he says the world is “only partially globalised”, the words come wrapped in an intriguing notion. It means there is always an economic competition between countries — one pitted against the other.

Competitiveness is espoused by governments around the world. “It’s interesting that they say science is international and we collaborate and they collaborate. When they go back to their countries, governments always ask one question: Is that going to help national competitiveness?”

A passionate promoter of a “global government”, Lee says: “Complete globalisation shows that we need an organisation to take care of our problems.”

To emphasise his point, the Nobel laureate rephrases what he has already said: “I strongly feel the world needs a global government that will take care of environmental and financial problems.”

The European Union is one possible way. The EU shares 1 percent of its combined GDP with member countries in assistance and other financial packages. Lee cites this example to indicate the world might develop a global government.

A global currency could be a cornerstone in the global government. “Many economists are now saying we need a global currency. In that sense, we need a global village,” Lee says.

It is not just the US dollar-based system or the Japanese yen or the euro that is good enough for the world. This is what he learnt from the Nobel laureates in economics when they got together in meetings on the world stage.

But Lee is well aware of its limited strength: the adoption of the global currency alone cannot narrow the gap between the rich and the poor.

Lee points his audience to the age-old problems that deepen poverty around the world. “If you look at poverty and starvation, it’s not because we don’t produce enough food for the entire world, but because of the problems with distribution and fairness,” Lee says.

Lee is sceptic of a free-market economy. Economists say if the market is opened up, everything will do well. “But as we see the financial crisis now, we know this isn’t going to happen,” Lee says.

“In the market-driven economy we tend to believe the market will take care of itself. But the fact is, the market will only take care of itself, if we have a large purse for us to keep on spending.

“We don’t have that. If we keep on spending, we get into the environmental problems.”

Lee is not a strong backer of the stimulus packages announced by different governments around the world. He dismisses the common, simplistic belief that consumers should spend money to keep vitality in the economy during the financial crisis.

“I’ll support it (a stimulus package), if you ask people to do something which will help sustainable development.” He advises governments around the world to do new development using solar energy and electric cars.

Taiwan — a poor country when Lee was born, but now a remarkable seat of capitalism in Asia — provides an example of buying automobiles with easy government loans. “It’s an entirely wrong thing do. We don’t have enough petroleum and we have already produced so much carbon dioxide.”

“Spending money is a good thing, if we spend it for the future.”

Lee pointed to the inevitable joblessness in the financial rout that rampaged through a large swathe of the world.

“Jobs were created because of consumption. We assumed that the US is a big market — no matter what you make, you can sell (it) to the Americans,” Lee says.

Mindless consumption has a downside. People in Southeast Asia have already polluted rivers and air to make things only to sell them to the Americans and Europeans, according to the Nobel laureate.

As the shadows of the financial crisis lengthen to parts of Asia, the region looks inward to create domestic demand. People in the US are shifting away from heavy consumption of imported goods, which means slowing exports from China and other Asian countries.

“The Americans have now realised they cannot go on like this,” Lee says, pointing to a deep recession unfolding in the US economy.

For him, Southeast Asia is a region that pulls in a lot of attention. Big companies come and set up factories and provide jobs for local people.

“Governments say ‘you don’t have to pay taxes for ten years’. We (Taiwan) provide electricity subsidised, and the companies make a lot of money,” he says.

Years later, another country offers the big companies land and tax concessions, Lee goes on. “Big companies from America come to Taiwan, pollute its land and move on to China and then to Vietnam.”

According to Lee, part of the reason for the world financial catastrophe is loose regulation. “The government regulation in the United States is too loose.”

Extreme trade liberalisation is no solution for Lee. “We need regulations and government intervention becomes very important. Governments should control so-called global enterprises.”

As a backer of sustainable development, Lee urges people to keep away from the burning of too much coal or petroleum.

“We have to change our lifestyle. As a scientist, I would say we would be able to depend on solar energy within 50 years to a large extent. But between now and 50 years, we need something rather than solar energy, and we can probably depend on nuclear energy.”

The daily star 13.02.2009




  1. aonik বলেছেন:

    Your writing is really creates inspiration. Thanks for this creation.

  2. kanakbarman বলেছেন:

    you are welcome
    Aonik, it is not myself writing
    It is only posted by me.

  3. […] Money? Spend it for future « Kanakbarman’s Blog […]

মন্তব্য করুন

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  পরিবর্তন )

Google photo

You are commenting using your Google account. Log Out /  পরিবর্তন )

Twitter picture

You are commenting using your Twitter account. Log Out /  পরিবর্তন )

Facebook photo

You are commenting using your Facebook account. Log Out /  পরিবর্তন )

Connecting to %s