Assistant Secretary General, United Nations, Professor Jomo Kwame Sundaram, has tipped the flawed Breton-Woods system as the root cause of the current global financial crisis. Delivering his lecture on the theme “Global Green: A New Deal of Economic Recovery” on the second day of the annual conference of Pakistan Society of Development Economists, he said the question of economic recovery reminds us to reflect on missed opportunities, which were presented by the East Asian crisis. Professor Sundaram tipped flawed Breton-Woods system as the root cause of the current crisis.
He argued that current crisis was triggered by collapse of the US housing market. He warned that current system has become fragile and has become pro-cyclical and there is a possibility of double-dip recession. Therefore, we need a sustained and concentrated recovery effort, which has to come from fiscal stimulus. However, the coordination at global level does not exist and even G20 has not made any progress for the reformation of the system in this regard. The distinguished speaker highlighted lack of policy and regulatory reforms to tackle the problem which has serious implications for poverty too.
