'Global warming could lead to economic collapse'

Growing inequalities due to neo-liberal policies

The adverse effects due to global warming might lead to a global economic collapse in the future, said Srinivas R Melkote, professor at Bowling Green University, Ohio, USA, here, on Tuesday.

Delivering a lecture on ‘Keynesian and Neo Liberal Model: Comparison from a Development Perspective’, he said, global warming is fuelled by gross mismanagement of resources and pollution across the world.

At such a juncture, it is necessary to adopt economic models which would both be sustainable and ensures social welfare, he said. Criticising the neo-liberal economic model, for its over-emphasis on economic growth alone, he said, the model did not concentrate on “equitable distribution of wealth’. Thus, economic development under neo-liberal economic policies benefitted only a few, who used wealth to maintain their status, he said.

During the past two to three decades, inequalities in the world are only increasing, due to such policies. The inequalities seen today are the highest in recorded history. While one per cent of the population in the world has close to half the total wealth of the world, the bottom 20 per cent do not even have access to basic facilities, he said.

He said, countries like India, which got Independence in the 19th century were encouraged to develop economies based on industrialisation, where importance was given only to macro economies. Even the Five Year Plans implemented in such nations, to ensure development, helped little in improving the standard of living, as participatory development was ignored, he said.

Quoting from a book authored by Reserve Bank of India Governor, Raghuram Rajan, he said, neo-liberal policies have created a distinct class of “winners and losers” in the country. Considering the population of the country, imitating the neo-liberal models of the West would be disastrous, he said.

He said, Keynesian economic models, which are based on both economic growth and social welfare, would serve as better alternatives in the current scenario.

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