Global Poverty Stymies World's Greatest Minds

Thursday, 19 June 2008 , 2:16 p.m.

Amman: They have unravelled the secrets of the universe and discovered the intricacies of the human genome, but when it came to solving global poverty, some of the greatest minds came up with a blank.

The Tibetan spiritual leader, His Holiness the Dalai Lama (left), takes part in the fourth Petra Conference of Nobel Laureates/Reuters

At an annual meeting of Nobel laureates in Jordan's rose-red stone city of Petra yesterday, economic and financial specialists agreed that globalisation had helped the economies of developed and developing nations alike. But they failed to put forward clear suggestions for combating inequities in the benefits of this process between the world's rich and poor.

"I am pro-globalisation. I do not deny for a moment that globalisation has been a force for the good. My only concern is that... there have been too many people left out and too many people actually hurt by these global forces," said Eric Maskin, of the Institute for Advanced Study at Princeton University in the US, who was last year's recipient of the Nobel Prize for Economics.

"To some extent, this problem will resolve of its own accord, but I don't think we can afford to be patient," he added.

Remedies suggested, with no unified sense that anything would work, ranged from more government assistance with education and job training to tougher regulation of banks, which have been blamed for the fallout from the US mortgage crisis.

But even here, not all the panelists seemed convinced of the need for a greater direct role for governments.

"Governments cannot do it all," said Robert B Fagenson, a former vice chairman of the New York Stock Exchange, who nonetheless blamed the subprime mortgage fiasco on an "inexcusable" lapse in government oversight.

He suggested regulatory partnerships between governments and financial institutions as a way to prevent such lapses from recurring.

"We cannot have a policeman next to every bank employee," concurred Umayya Toukan, the chairman of the Central Bank of Jordan. Still, Mr Toukan said he felt optimistic about globalisation following a Jordanian study on its local effects.

Taking a period from 1999 to 2007, in which the effects of globalisation on world trade and finance have been especially prominent, the government-sponsored study compared Jordan's actual economic performance to projections of what would have been achieved on the basis of historical trends.

It calculated, among other things, that the country's 5.7 per cent real growth in gross domestic product last year was nearly twice the 2.9 per cent it would have been without globalisation.

Similarly, Jordan's financial reserves stood at US$7 billion (Dh25.7bn) last year, instead of $4.9bn.

"I would suggest that globalisation is beneficial to developing countries in particular. It provides a powerful incentive for badly needed reforms," Mr Toukan said.

Taking a contrary view, Edgar de Picciotto, the chairman of Union Bancaire Privee, warned of an "inevitable" confrontation between developing and developed nations, as the former move into head-on competition with the latter. Financial upheavals would ensue, he predicted.

In a subsequent session discussing world hunger, the spiritual leader of Tibet, the Dalai Lama, who won the Nobel Peace Prize in 1989, called for the affluent to show compassion to the less fortunate, not least because hunger could threaten world security.

"We have to address this gap: rich and poor," His Holiness said.

--Tamsin Carlisle, The National, U.A.E.