MercoPress. South Atlantic News Agency

Stiglitz blasts G-8 and IMF “democratic deficit”

US economist and Nobel Prize winner Joseph Stiglitz demanded an urgent review of multilateral organizations such as the International Monetary Fund, IMF, World Bank and particularly the G-8 given their lack of legitimacy which impedes the development of a “true global democracy”.

Mr. Stiglitz who participated in Washington in the forum titled, "From the Washington consensus to a new world governance" insisted G-8 must become G-24, made up of both developed and developing countries.

"The democratic deficit" is the outstanding peculiarity of G-8 underlined Mr. Stiglitz who recalled some recent remarks by former US president Bill Clinton who admitted that when G-8 leaders debate economic reforms, "they don't have the world's main economies sitting at the table".

IMF, World Bank, World Trade Organization, United Nations are "imperfect organizations" and have their limits since they are characterized by a non democratic government system, which is easily reflected in the exclusive veto power of the five permanent members of the UN Security Council.

"This democratic deficit erodes the legitimacy of public global institutions", which can easily be seen in the thinking and achievements of these organizations.

"Economic globalization has left behind political globalization", highlighted Nobel Prize Stiglitz underlining that globalization has meant greater interdependency and a need for greater global action.

The absence of greater global action and legitimacy leads to "flagrant hypocrisy and incoherence" such as when United States accuses Thailand of unregulated fishing practices and actually the US is the uppermost responsible for climatic global warming.

However Mr. Stiglitz is optimistic because he trusts changes in world governance will occur, since "acknowledging a democratic deficit gives us strength to push ahead for democratic transformations".

Mr. Stiglitz who shared the panel with other distinguished speakers such as Jeffrey Sachs and Paul Krugman concluded that "globalization is not an inevitable process, but unless changes are implemented, disenchantment will extend further".