ADDIS ABABA – Interviewing Joseph Stiglitz, even briefly, is a strange experience. The 2001 Nobel Prize-winning economist is an unassuming man – bald and bearded, his dark suit incongruously completed by a pair of black rubber platform shoes – but there’s no denying his star power. As we talk, people pose behind him for photographs, and there’s a long queue of media desperate for quotes (whose attention only wavers when Ban-Ki Moon and his entourage sweeps through the lobby of the Sheraton Hotel. Stiglitz, naturally, gets a nod from the UN secretary-general).

Stiglitz is in Addis Ababa for the Third International Financing for Development Conference, and in these, circles, he’s a major celebrity – even when he’s here to talk about the distinctly un-sexy topic of tax avoidance and evasion. He’s got a reputation for straight-talking, and for his searing criticism of a global financial system that he views as inherently biased against the world’s least developed countries.

The tax issue is a symptom of this. Stiglitz says he gets “emotional” when he thinks about how tax rules, established and fiercely maintained by developed countries, prevent developing countries from collecting revenue that is theirs by right. It is this lost revenue – estimated at some $200 billion a year – that they so desperately need to lift themselves out of poverty.

“We know that the advanced countries have made commitments on [Overseas Development Aid] that they’re not fulfilling. We know they’ve made commitments on climate finance that they’re not fulfilling. But at least they shouldn’t be doing harm. At least if they’re not going to give money, let’s not undermine the ability of the developing and emerging markets to collect money that is rightly theirs…If you’re not going to help, don’t do harm,” Stiglitz told the Daily Maverick.

Currently, a global body to set tax rules and close transnational loopholes doesn’t exist. By default, responsibility for this rests with the Organisation for Economic Development, which naturally makes rules that reflect the interests of its members: 34 overwhelmingly developed, wealthy nations. Too often, these rules protect the interests of multinationals over developing countries.

Stiglitz and several other prominent economists are part of the Independent Commission for the Reform of International Corporate Taxation, a group established to lobby for global tax reform. The commission has thrown its collective weight behind the creation of a new global tax body that would reside within the United Nations, and would be more transparent and accountable to all member states.

Within the international community, support for this new institution is growing. The G77 group of less-developed countries is in favour, but global heavyweights – in particular the United States – are strongly opposed. Current circumstances make this position particularly ironic, says Stiglitz.

“European leaders and the West in general are criticising Greece for their failure to collect taxes. One of the points of our commission is that the West has created a framework for global tax avoidance, but the US is opposing the creation of a UN framework and [even] discussions among all the countries to do something about it. Here you have advanced countries trying to undermine a global effort to stop tax avoidance. Can you have a better image of hypocrisy?”

Even in Addis Ababa, the Greek crisis is dominating discussion, and Stiglitz is typically outspoken on this – and for him, there’s an obvious culprit. “Almost surely, bargaining has not been done in good faith by Germany. What’s been demonstrated is a lack of solidarity by Germany. You cannot run the Eurozone or Euro without a basic modicum of solidarity…It’s clear that Germany has seriously undermined Europe. Whether they recover is determined by what happens in the next week. If they negotiate an agreement, wounds heal. If they succeed in using this as a trick to get Greece out I think the damage is going to be very, very deep.”

The Greek Crisis, coupled with the Chinese stock market crash and the Iranian nuclear talks, is drawing attention away from some of the key debates at the Financing for Development Conference (on Sunday, for example, International Monetary Fund chairperson Christine Lagarde announced that she would no longer be attending, presumably because she’s got her hands full in Europe). Stiglitz argues that, while all too predictable, this is a mistake.

“The issues being discussed here are the long run issues. One of the things that upset me about the crisis in 2008 was that it distracted our attention from climate change. The world will disappear and we will solve the financial problem. There’s a sense of irony about the immediate overshadowing the important. There’s a bit of that here. Clearly a big issue is finance for development. We’re talking about the lives of not ten million people, but billions of people, so the orders of magnitude are just different.” DM

Photo: US economist and Nobel Prize laureate in Economic Sciences, Joseph Stiglitz speaks at the exhibition booth of the newspaper Vorwaerts (Forward) at the Frankfurt Book Fair, in Frankfurt am Main, Germany, 12 October 2012. EPA/ARNE DEDERT.

Read more:

• Joseph Stiglitz: It WAS the economists, stupid! in Daily Maverick.