‘Build a better, greener economy after pandemic’

Economist Joseph Stiglitz has long argued that gross domestic product is far too broad a measure.

23 June 2020 | Economics

GDP does not take into account the inequalities, the lack of resilience or the lack of sustainability. – Joseph Stiglitz, Nobel laureate: Economics

Manon Billing - Business as usual is not an option once the world emerges from the coronavirus pandemic, according to Nobel laureate economist Joseph Stiglitz, who wants new climate-laced metrics to measure growth beyond the blunt instrument of GDP.

Interviewed by AFP, Stiglitz said the debilitating effects of Covid-19 worldwide offered governments a chance to forge a green recovery with a new emphasis on fairness.

"And it shouldn't be just going back to where we were," he said.

"GDP [gross domestic product] does not take into account the inequalities, the lack of resilience or the lack of sustainability. What we want to do now is to lead the economy in a direction that reflects all these concerns."

Stiglitz, winner of the Nobel prize for economics in 2001 who served as a top adviser at the World Bank and in Bill Clinton's White House, has long argued that gross domestic product is far too broad a measure.

A decade ago, he co-chaired a commission convened by the French government that recommended a new approach encompassing metrics for sustainability and a "green GDP".

"We argued for a dashboard," he told AFP, "We pointed out that if we had had better measures, we would have had a better sense of the damage that the 2008 crisis was doing."

Today, "the most important indicator is the impact of greenhouse gas emissions", Stiglitz said.

"What we've been learning more about is the multiple manifestations of climate change, in terms of for instance how it will affect extreme weather events. What we have learned is the complexity in climate change itself."

Message gaining track

Stiglitz is not alone in demanding a break with the past as the world strives to overcome a pandemic that has so far killed more than 450 000 people and infected at least eight million, according to an AFP tally.

Shutdowns sparked by the outbreak have led to dizzying declines in growth rates and mammoth government bailouts in a number of countries, especially in Europe and the United States.

Some of the rescue packages have come attached with strings demanding companies refocus their investment plans on strategies to fight climate change. An overarching plan was unveiled Thursday by the International Energy Agency and International Monetary Fund.

The project aims to boost GDP growth by 1.1 percentage points, "save or create" nine million jobs, and slash CO2 emissions by 1.5 billion tonnes in each of the next three years.

IEA executive director Fatih Birol said world leaders have a "once-in-a-lifetime opportunity" to reboot their economies and tackle global warming at the same time.

But those goals continue to pull against each other, Birol acknowledged, pointing to lessons learned from the global recession triggered by the 2008 collapse of the US housing market.

‘No spare tyres’

Stiglitz, who has extensively criticised the laissez-faire policies that led up to 2008, said the current crisis had again exposed short-sighted thinking.

"We created an economy without spare tyres, without extra hospital beds, we didn't do pandemic preparedness, we didn't do a lot of the things that would have enabled us to respond to the pandemic," he said.

"It's not that we could have prevented it, but we could have had a much more resilient economy, more able to respond to that."

Stiglitz said there were grounds for hope now, especially in the European Union, whose executive arm is pushing a five-year "Green Deal" as part of a strategy to achieve "carbon neutrality" by 2050.


But the plan remains hostage to other financial pressures, as EU leaders squabble over a coronavirus recovery plan worth 750 billion euro (US$843 billion).

The 2050 goal is "attainable" and "very positive", Stiglitz said.

"But it's not enough to have that aspiration. You have to actually start spending the money. And obviously the pandemic is being a big impetus to begin spending the money."

Stiglitz said he backed proposals by both the European Commission and by US presidential contender Joe Biden to impose a tax on carbon-intensive goods from abroad.

"I think this is something that needs to be implemented. Of course it would have to be used in a non-protectionist way," the economist said. – Nampa/AFP

Similar News


!Gawaxab on his first 100 days

23 hours ago | Economics

PHILLEPUS UUSIKU - Even before the coronavirus crisis, Namibia’s economy was contracting, unemployment was high and fiscal space severely constrained if not exhausted, creating an...

Government support business sector

1 day - 17 September 2020 | Economics

Government has paid out N$ 3.8 billion for outstanding invoices and value-added tax in support of the business sector including small and medium enterprises (SMEs)...

Whk informal settlements don’t have capacity

1 day - 17 September 2020 | Economics

Windhoek mayor Fransina Kahungu said unplanned informal settlements in Windhoek will be declared reception areas that will be decongested in order to reduce the spread...

Namibia's investment risk increases - report

1 day - 17 September 2020 | Economics

ELLANIE SMITWINDHOEKThe risk of investing in Namibia has been increasing, while rewards have been declining, according to a new investment report. The coronavirus pandemic...

Policy void fuels poverty

2 days ago - 16 September 2020 | Economics

JM Kretschmer - The Namibian government has of late come under increased pressure from all sectors of society, and in a key turn of events...

August inflation a bitter fruit

2 days ago - 16 September 2020 | Economics

Although annual overall inflation of 2.4% last month was below the 3.7% of a year ago, overall food inflation is starting to heat up. According...

Hobbling SA govt relief package

2 days ago - 16 September 2020 | Economics

Emma Rumney and Alexander Winning - South Africa's National Treasury plans no further easing of its coronavirus loan scheme criteria to stimulate uptake, it told...

Oil demand set for slow recovery from virus

2 days ago - 16 September 2020 | Economics

Paris - With novel coronavirus cases surging in many parts of the world and more people working from home, the recovery in global oil demand...

Hope pinned on Africa's shift to online care

2 days ago - 16 September 2020 | Economics

Alexis Akwagyiram - When Loveth Metiboba's baby had diarrhoea, she worried that taking him to a clinic near her home in Nigeria's capital, Abuja, might...

SA landowners fear for their property

2 days ago - 16 September 2020 | Economics

Kim Harrisberg - On an abandoned private farm south of Johannesburg, the sound of hammers bashing nails into corrugated iron, brooms sweeping away the dust...

Latest News

Consumer education

23 hours ago | People

Ndangi Katoma 8 things you need to know about Old Mutual’s new funeral insurance.If you are the breadwinner in your family, the day may come...

Creating powerful change

23 hours ago | People

Monique Adams Talita Horn is passionate about making a change in the corporate governance field in Namibia as well as contributing to the national...

Virus knocks Oryx into the...

23 hours ago | Business

Covid-19 measures devastating retail and hospitality in the last three months of Oryx Properties' 2020 financial year resulted in the locally-listed group suffering a loss...

!Gawaxab on his first 100...

23 hours ago | Economics

PHILLEPUS UUSIKU - Even before the coronavirus crisis, Namibia’s economy was contracting, unemployment was high and fiscal space severely constrained if not exhausted, creating an...

Itula reacts to 'autocracy' accusations

23 hours ago | Politics

JEMIMA BEUKESWINDHOEKIndependent Patriots for Change (IPC) leader Dr Panduleni Itula says he is unshaken by critics and aggrieved members who have labelled him a “hypocrite”...

I won't muzzle Fishrot probe...

23 hours ago | Banking

OGONE TLHAGEWINDHOEKBank of Namibia governor Johannes !Gawaxab has scoffed at claims that his appointment as the head of the central bank was politically motivated and...

We are not out of...

23 hours ago | Health

JEMIMA BEUKESWINDHOEKThe Covid-19 state of emergency expired last night and the onus is now on each individual to exercise maximum personal responsibility and vigilance, President...

Local lawyer makes waves

23 hours ago | People

Mariselle Stofberg The friendly and savvy Nicole Kloppers is a mother of two who took a leap of faith in opening her own law...

Head-on collision claims four lives

23 hours ago | Accidents

ELIZABETH JOSEPHKEETMANSHOOPA car accident 15 km from Koës killed four people at around noon on Wednesday.It is alleged that two vehicles, one belonging to NamPower...

Load More