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Stiglitz, winner of the Nobel Prize for Economics, met with media in Bangalore and launched a scathing attack on Walmart. He said Foreign Direct Investment in India may not help farmers and the country does not need Walmart’s “expertise in bribery” .



As reported in India’s media this week, Stiglitz said, “Don't focus on FDI in the belief that it will solve all problems. There is no shortage of entrepreneurs in India. So look at what is foreign investment bringing that Indian entrepreneurs cannot bring. Walmart certainly brings greater capacity in bribery, it was their source of success in Mexico. You don't want to bring that in, you already have enough of that. I have studied Walmart's supply chain in other countries. They have not worked. Foreign investment may use their monopsony power (a large buyer controlling a large proportion of the market and driving prices down) to bring Chinese goods that reduce the prices that Indian suppliers can get and thereby increase inequality, or increase dependence on foreign goods.



He said that there was evidence from other countries that bringing in foreign companies made supply chains less efficient and made it more difficult for farmers to make a living. He said there would be two consequences of foreign direct investment in retail: it would drive down prices received by Indian suppliers to compete with foreign companies, increasing inequality and secondly shift production away from the country.



Stiglitz said he saw no shortage of entrepreneurship in India. “Do you really think that Indian entrepreneurs are not capable of bringing in what foreign retail firms are?”







http://economictimes.indiatimes.com/news/news-by-industry/services/retail/walmart-brings-more-capacity-for-bribery/articleshow/17947814.cms





http://www.livemint.com/Politics/bGJefvzZ6xTKNtMFBKzofN/FDI-in-retail-may-not-help-farmers-Stiglitz.html