Excellencies, ladies and
gentlemen,
It is a real privilege
to welcome among us the 2001 Nobel Prize
winner in economics Professor Joseph Stiglitz.
The Economic Commission for Europe and everyone
here today feels proud that you have accepted
our invitation to deliver the lecture in
honour of the first Executive Secretary
of the United Nations Economic Commission
for Europe, Swedish Nobel Prize winner,
Gunnar Myrdal.
Before introducing our
honoured guest today, I would like to recall
that this is the second of the renewed Myrdal
Lectures and that the first one was delivered
in 2003 by Nobel laureate, Professor Douglass
C. North, on the Role of Institutions in
Economic Development. This lecture is now
available in published form as Occasional
Paper No. 1 of UNECE.
As you may remember, under
the leadership of Gunnar Myrdal who served
as the first Executive Secretary of the
UNECE from 1947 to 1957 during the very
difficult years of the cold war, UNECE developed
a bridge between the Western and Eastern
half of Europe when no one else except UNECE
was willing or able to do so and when the
prospects of uniting them seemed so distant
as to be merely academic. Myrdal was a major
influence in keeping alive the idea of a
larger Europe that transcended the boundaries
of Western Europe and the original European
Community. Unfortunately, he died in 1987
just before his vision was realized.
If Gunnar Myrdal were here
today, I think he would be delighted by
Professor Stiglitz's willingness to deliver
today's lecture on The Process of European
Integration and the Future of Europe, and
to deliver it in a very historic moment,
on the eve of the unification of Western
and Eastern Europe. We are all honoured
to have Professor Stiglitz with us. Not
only is Professor Stiglitz a fellow Nobel
Prize winner, but he is also one of the
most prominent and original economic thinkers
in the world today. He is one of the originators
of a new field of economics, the economics
of information, and has made major contributions
to other areas in economics. In addition,
he is recognized around the world as a leading
economics educator. His academic career
has taken him to Oxford, MIT, Yale, Princeton,
Stanford and Columbia, where he is currently
teaching.
He served as Chairman of
President Clinton's Council of Economic
Advisors and later as Senior Vice-President
and the Chief Economist at the World Bank.
He was deeply involved in many of the policy
decisions of the decade and was uniquely
positioned to watch the nineties unfold.
Though a consummate political insider, Professor
Stiglitz grew increasingly disillusioned
with the failures of the international economic
policies and the international financial
institutions that enforce them and began
to voice his thinking in public speeches
and writings.
In his internationally
best-selling book Globalization and Its
Discontents, Professor Stiglitz examines
the strengths and weaknesses of the main
institutions governing globalization. In
chapter 7, which is much relevant for today's
lecture, he argues that there are "better
roads to the market" than text-book models
advocated by the IMF. He stresses the importance
of the institutional infrastructure for
a market economy, the need for competition,
promoting growth and prosperity necessary
for long-run stability, policy-mix conducive
to job creation, investments to social capital,
etc. While the IMF's orthodoxy is efficient
in achieving short-term macroeconomic stabilization
it does not ensure long-term stability,
economic growth and positive social development.
In The Roaring Nineties, he sees parallels
between what went wrong with globalization
abroad and what went wrong with America
in the nineties. Professor Stiglitz has
seen policy making both from the inside
as well as the outside. So, I think it will
be very revealing to hear him discuss the
process of European integration and the
future of Europe.
As I already noted, we
are on the eve of a historic enlargement
of the EU15 by 10 member states to a EU25.
This enlargement is significant on many
levels. It poses a unique challenge in that
it is the largest in terms of scope and
diversity. The 10 new members will contribute
an additional 24 percent in geographic area,
75 million people, and a wealth of culture
and history. That the majority of the candidates
are former Eastern bloc nations is momentous
in terms of a changing Europe. This addition
of members is also the culmination of more
than a decade of economic and political
change in both the European Union and the
acceding countries. Allow me to add that
my homeland, Slovakia, is among the acceding
countries and that I am proud of it.
Enlargement also brings
about new challenges. It will significantly
increase the economic disparities in the
Union, with associated tensions for social
cohesion. The enlarged EU will face the
challenge to withstand the intensified competition
in the global economy, which is a pre-condition
for achieving high and sustained rates of
economic growth and employment. This will
not be possible without structural reforms
in labour, capital and product markets.
It will also require increasing the flexibility
of the macroeconomic policy making in the
European Union.
Professor Stiglitz has
been working hard to change the policies
and attitudes of governments and international
organizations for a fairer distribution
of the benefits of globalization. The UNECE,
on the other hand, is intent on providing
a much-needed forum for alternative policy
prescriptions. In this spirit, I have great
pleasure in introducing Professor Joseph
Stiglitz as the speaker for the Second Gunnar
Myrdal lecture.
The floor is yours.
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