C. Gouridasan Nair

THIRUVANANTHAPURAM: Noted economist and Kerala State Planning Board Vice-Chairman Prabhat Patnaik has been included in a four-member high-power task force of the United Nations (U.N.) to recommend reforms of the global financial system. The task force is to be headed by Nobel Prize-winning economist Joseph Stiglitz.

Professor Patnaik, a trenchant critic of neo-liberalism, is the only Asian economist to figure in the panel constituted by U.N. General Assembly president Miguel d’Escoto Brockmann.

The other members are Belgian sociologist Francois Houtart and Ecuador’s Minister for Economic Policy Pedro Paez. The task force will meet in the U.N. on October 30.

When contacted, Professor Patnaik confirmed that he had received the invitation to be a member of the task force and would be leaving here early next week for the United Nations.

‘Stimulate demand’

On the current financial turmoil, he said though there was this widely held view that the world was experiencing a global financial crisis, in reality it was a recession which could not be tackled by merely injecting liquidity into the system.

“What we need to do is to spur demand and simply lowering the interest rate is not sufficient to achieve this,” he said.

Professor Patnaik said the governments must be proactive and adopt expansionary fiscal policies with sufficient capital controls to take care of fears about flight of capital. He was of the firm view that there was tremendous scope in the Third World for governments to adopt aggressive fiscal policies to augment the infrastructural and other shortfalls, increase welfare expenditure and inject demand into the system.