ECONOMISTS CALL FOR DRASTIC RESTRUCTURING OF GREED-BASED CAPITALIST SYSTEM

       The capitalist theory that worked in the rpevious decades needs to be re-evaluated in the face of the financial crisis that has hit the global economy, economists concluded yesterday at a conference in Bangkok.
       "The world has changed, financial institutions need to develop new control measures to be more effective," said Jomo KS, assistant secretary-general for economic development in the UN's Department of Economic and Social Affairs.
       He was speaking at the "Asia: Road to New Economy" international conference. The conference, held at the Plaza Athenee Hotel in Bangkok, was organised by The Nation and Asia News Network.
       Jomo said the response of international organisations to the sub-prime financial crisis that originated from the US had so far been "modest", particularly that of the UN. He noted that the "most powerful nations are not keen" on allowing the United Nations to have an extensive role in setting new monetary policies.
       This is in contrast to the role that it played after the Great Depression when it was instrumental in organising the Bretton Woods Conference in 1944, which resulted in the establishment of the International Monetary Fund and the International Bank for Reconstruction and Development.
       "We can see the failure of international cooperation. G-20 is bankrupt and the three decades of globalisation ... with inflows of shortterm capital showed that there was no real contribution made to investment growth rates," Jomo said.
       Don Bhasavanich of the Thailand Management Association said the "world order is changing" and Asia as a whole could no longer sell its exports to the US, European and Japanese markets, whose economies have been dampened from the sub-prime crisis.
       "We have to think of the 99 per cent of the population that's in the bottom line. We need to help them get up in the world and become producers and consumers," he said.
       He acknowledged that the main problem for the majority was the lack of access to capital. "The bottom-line 99 per cent has the drive but not the means."
       Don said Asian governments could take a look at the successful experience of India and African countries in lending to small enterprises and bringing debt rates down.
       He said this would entail a "change in attitude in governments and lending institutions ... to give the poor the means to become entrepreneurs and get them going."
       He cited the "sufficiency economy" theory of His Majesty the King, which encourages living in moderation and within one's means without exploiting natural resources.
       "Sufficiency economy has been through a lot of misunderstanding and neglect ... it is time that we put it into practice," Don said.
       The sufficiency theory was also a recurring theme in the conference, with keynote speaker Joseph Stiglitz saying that people have to change the way they live in order to prevent another financial crisis from toppling their economies.
       "Greed is what we based our whole system on," said Stiglitz, a Nobel laureate and economics professor at Columbia University in New York.
       He said the "capitalist ideologies" of the 19th century, where an individual owned a company and bore the consequencess of his decisions, had changed into the 21st-century "realities", where executives and shareholders own a company but pass on the consequences and costs of their decisions to other people.
       "There is a need for more collective action at a global level. Right now there is no global framwork that would allow this global system to work well," Stiglitz told the conference, which gathered businessman and economists alike.
       There was also a consensus that while Asia's recovery from the financial crisis has been remarkable, it needed to "decouple" itself from Western markets.
       Much of the region's expectation hinges on China, with hopes that the emerging economic power will be able to lead growth in the next decade.
       Zhang Yun-cheng, deputy director of the Centre for the Study of Globalisation of the China Institute of Contemporary International Relations in Beijing, however noted that China still needed to reconcile contradictions between the market economy philosophy and the need for government control.
       "How to coordinate this relationship between the market economy and government control is becoming more and serious," Zhang said. "There is still much disagreement on whether China has formed its own economic model ... over the past three decades since its reform."
       He said China's emerging econmic model is characterised by Beijing asa "socialist model with capitalist colour".
       On calls for Asian countries to be less dependent on exports to boosteconomic growth, Zhang said, "the Chinese economy has begun its transition process from an export-oriented model" to emphasise the domestic market.
       Deflecting the world's expectations of China, he added that the country was still relatively poor and had to address many economic issues, including narrowing the gap between the rich and poor.
       "Different countries have different economic paths ... More and mroe comments point out that China's economic rise will change the world before it changes China," Zhang said.