Tackle absurd power distribution to resolve global economic imbalances: Shashi Tharoor

Indian diplomat and politician and former Under Secretary General at the United Nations, Shashi Tharoor, joined the Reuters Global Markets Forum on February 11, 2015. We quizzed Dr. Tharoor on his views on the global geopolitical and economic imbalances, Indian politics and the recent Assembly elections in Delhi.


Global economic imbalances? The obvious one to tackle is the absurd distribution of power in the Bretton Woods Agencies. We need effective follow through of the deal the UPA helped negotiate at the Pittsbugh G-20 in 2008. To shift to parity between the developed rich countries on the one hand and the developing, emerging and transition economies on the other. It was absurd that Belgium’s weighted vote in the World Bank was more than China’s!”

“The crude price collapse seems to be the result of a price war between the traditional producers led by the Saudis and the new ones especially Shale oil types from North America. In order to preserve market share the traditionalists are driving prices down beyond the point where Shale oil exploration is viable. In the short term this benefits consumers hugely. We can control inflation, build up buffer stocks and manage our import balances better.”

“(Being a) soft power is a major asset but it isn’t enough. Soft power without hard is an admission of weakness. Hard power without soft just provokes resentments. You need both: smart power.”

On Greece and the Troika: “There’s no doubting that the debt trap is both the single biggest factor underlying Greeks’ political discontent and the biggest threat to the viability of the euro zone.”

“The NDB (BRICS New Development Bank) is a reflection of frustration with the existing power arrangements I described earlier in the Bretton Woods institutions. There’s something of the ‘if you won’t give us a level playing field we’ll go and build our own’ about it.”

Source: Reuters blog