Tue, 08 Jul 2008 Economy & Investments

Nobel Economist Stiglitz criticises EPA


Professor Joseph Stiglitz, a Nobel Laureate in Economics, on Tuesday urged the government to “take a cold hard look” at the Economic Partnership Agreement (EPA) and negotiate its inimical aspects away, saying that the deal was not free but an extremely managed trade agreement.

He noted that “partnership” as used in the EPA suggested that it was an agreement between equals, but the truth was that the less developed countries (LDCs) and the European Union (EU) could not be equal partners.

Prof. Stiglitz made the call when he paid a courtesy call on the Minister of Finance, Mr Kwadwo Baah-Wiredu, as part of his two-day visit to Ghana under the auspices of the Africa Centre for Economic Transformation (ACET).

He urged the government to listen to the critical issues raised by civil society organization about the EPA and ensure that the country entered into an agreement that would favour local businesses and the country's economic development as a whole.

“EPA does not give sufficient opportunities for businesses in LDCs to develop to levels where they can compete favourably with their counterparts in the EU and that is critical to the development of a country like Ghana,” he said.

Prof. Stiglitz noted that even though the EPA was inimical to Ghana's development, it was no where near as bad as the bilateral trade agreements between the United States of America and developing countries like Ghana.

He therefore urged African governments to also re-examine the bilateral trade agreements between them and the USA and re-negotiate the inimical aspects away.

Prof. Stiglitz noted that the oil discovery in Ghana could only be a blessing when properly managed, adding that experience in other jurisdictions showed that oil did not necessarily bring riches to the people.

“It is a paradox but we see all around us that oil discovery, especially in Africa, has led to what we now call a resource curse instead of a blessing, due to poor management.”

He said it was his hope that his input into the African economy through ACET, whose Governing Council he chaired, would help countries like Ghana to properly manage their oil resource and take advantage to the soaring world oil prices to develop.

Prof. Stilglitz commended Ghana for maintaining appreciable economic growth levels in the face of soaring world oil and food prices and called for greater investment into agriculture to ensure higher food productivity to complement to newly discovered oil.

He said the world was gradually moving towards the use of bio-fuel, but pointed out that developed countries needed to be stopped from taking undue advantage of the need for bio-fuel to continue emitting more carbon into the atmosphere.

“America must be stopped from giving subsidies to its companies to produce more bio-fuel at the expense of food production and the global environment.”

Mr Kwadwo Baah-Wiredu, noted that being an election year for Ghana, a lot of questions were being asked about the way forward for the country's development.

He expressed the hope that Prof. Stiglitz's interaction with the various publics would provide some insights as to how the country could be transformed.

He said Ghana's major challenge had been energy and now how to manage the newly found oil, adding that the country had taken steps to find solutions in both areas but Prof. Stiglitz's input was welcome.

Mr. Baah-Wiredu gave assurance that in spite of oil discovery the government would continue to develop other sectors of the economy to avoid the resource curse experienced in other jurisdictions.

Prof. Stiglitz will hold separate meetings with the Association of Ghana Industries and also give a public lecture on Tuesday.