Alicia Bárcena Calls for Rethinking the Economic Model and Implementing a New Paradigm

The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, called today for rethinking the economic model and implementing a new paradigm that contributes to putting an end to economic, social and environmental inequalities and moving toward sustainable development.

The senior United Nations official participated in the high-level event entitled “Fractures in globalization and their implications for emerging economies,” held in Mexico City in the framework of the eighteenth World Congress of the International Economic Association (IEA), organized jointly with the Mexican Center for Research and Teaching of Economics (CIDE).

While speaking on the first panel on “Rethinking global finance – The perspectives of emerging economies,” Alicia Bárcena affirmed that “capitalism and hyper-globalization have led us to social, political and environmental problems that are not sustainable, which means we must reimagine ourselves as a society in terms of consumption and production.”

She specified that Latin America needs an industrial policy and a serious policy for productive diversification aimed at greater growth and development.

In her analysis, ECLAC’s top representative called for forging a new social compact that manages to halt the growing gap between rich and poor. She recalled that this gap is reaching new extremes, citing Credit Suisse figures that recently revealed that the richest 1% has accumulated more wealth than the rest of the world.

“Meanwhile, the wealth of the lower half of humanity has fallen in the last six years. This is just the latest evidence showing that today we live in a world with inequality levels that perhaps have not been seen in more than a century,” Alicia Bárcena warned listeners.

She added that, according to Forbes, 8 individuals alone concentrate an amount of wealth that is equivalent to that of humanity’s poorer half and, among these billionaires, 6 are linked to Information and Communication Technology (ICT) industries.

She said that macroeconomic management and industrial, innovation- and technology-related policies are crucial for resolving social problems, and warned that the heterogeneity of productive structures among countries is accentuated due to the current technological revolution of the digital economy.

Furthermore, she sustained that globalization is increasingly being questioned, mainly in developed countries, which has provoked an increase in nationalism, opposition to new trade agreements, resistance to immigration and the emergence of anti-globalization movements.

In light of this scenario, international cooperation is the key for making progress on the regulation of markets, administering tensions, reducing inequalities and consolidating an open international system that protects public goods and shared and inclusive prosperity.

Finally, Bárcena called for moving toward an open multilateralism, an essential mechanism for confronting the economic, social and environmental tensions provoked by the uncertain international situation.

The eighteenth World Congress of the International Economic Association on Globalization, Growth and Sustainability was inaugurated by Joseph Stiglitz, a Nobel Prize-winning economist, who addressed the dynamics of inequality.

The other participants on the first panel, along with Alicia Bárcena, were Mario Blejer, from the London School of Economics; Anne Krueger, from Johns Hopkins University, SAIS; Guillermo Ortiz, from BTG Pactual; and Andres Velasco, from Columbia University.