Nobel Laureate, in Cuba, Speaks Against US Aid Policies

HAVANA — U.S. financial prescriptions for developing countries with ailing economies often are hypocritical and harmful, an American Nobel laureate told hundreds of economists gathered here Monday.

Instead of taking advice from the U.S. Treasury Department or the International Monetary Fund, many struggling countries would rebound from economic crisis more quickly if they focused efforts on the specific needs of society, said Joseph Stiglitz, who was one of former President Clinton's economic advisers and co-winner of the 2001 Nobel prize in economics.

"The growing dissatisfaction with globalization has begun to focus on the hypocrisy," said Stiglitz, one of three Nobel laureates attending Cuba's annual international forum on economic globalization, which opened Monday afternoon. Canadian Robert Mundell, the 1999 prize winner in economics, and 1980 Nobel Peace Prize winner Adolfo Perez Esquivel of Argentina also are on the program.

While the Bush administration calls for Americans to spend their way out of recession, and U.S. lawmakers propose extending unemployment benefits, Washington traditionally has given just the opposite advice to developing nations, he said.

In China, for example, Stiglitz said that job creation has done more to stimulate the national economy than IMF-recommended job cuts as "shock treatments" for developing countries.

He said China's national income has increased 250 percent in the past decade in large part by focusing on societal needs — increasing literacy, decreasing poverty, creating more jobs.

"Increase in material well-being, while important, is only part of the story," Stiglitz told the gathering presided over by President Fidel Castro, who has an intense interest in economic globalization. Even more important, the American economist said, is "societal well-being."

For the first time, the IMF is sending a representative to the forum — Claudio Loser, the lending institution's representative for the Western Hemisphere. The World Bank is sending Vice President Guillermo Perry for the second year in a row.

Communist Cuba defends its maintenance of a centralized economy, but had allowed modest reforms in the mid-1990s — limited changes which allowed citizens to hold U.S. dollars, modest foreign investment and some small private businesses.