Inflation and growth

Patrick Bond pbond at wn.apc.org
Fri Jan 28 16:09:56 PST 2000



> >Stiglitz has vacillated on this question. On some occasions, he has
> >put the figure at 40%.

If I may draw upon a citation from a Jnl of World Systems Research article I did last year...

Precisely the institutional role Stiglitz had to continue playing--defending a key Washington Consensus institution, the World Bank--led soon enough to his South African delegitimisation. In January 1999, his World Bank Pretoria-based colleagues set up a formal meeting with 50 members of the SA NGO Coalition (Sangoco), where Stiglitz went on to reverse tack on the larger economic issues (including his Helsinki-speech consent to allowing inflation rates to rise to 40 per cent--he reduced the figure to 8), once some embarrassing questions about "moral hazard" were put to him. As recounted by Sangoco vice president Mercia Andrews and Campaign Against Neoliberalism in South Africa coordinator George Dor,

We asked him for his views on the

contradiction between his speech in Helsinki

and the World Bank contribution to the

[homegrown structural adjustment] Gear

strategy. He told us he didn't know much

about South Africa ... We put it to him that

perhaps the Bank should take action against

its staff members on the Gear team who got

the employment predictions so horribly wrong

by suggesting that Gear would generate

hundreds of thousands of jobs each year when,

in reality, hundreds of thousands are being

lost. Everything in his tortuous reply

suggested that he was not particularly

concerned whether Bank staff members produce

work of poor quality and that staff members

can get away with shoddy work that has a

profound impact on people's chances of

finding employment.

Our engagement with him highlights a

significant retreat from his Helsinki

position. There are a number of possible

reasons. His Helsinki speech may have been a

deliberate strategy to create the impression

of change. He may have been reigned in by the

World Bank after Helsinki. Perhaps he felt

restrained in Johannesburg by the need to

talk the language of his entourage. He

portrays the confidence that he has the ear

of the institution but insider talk suggests

that he is a maverick who is not to be taken

too seriously. Whatever the reason for his

retreat, his hero's halo has now vanished.

[International Viewpoint, 310, April 1999;

for an official Sangoco report on the meeting

in the same spirit, see also NGO Matters,

January 1999.]



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