Global response and policy coordination are needed to combat the current economic crisis and the United Nations (U.N.) has to play a bigger role, economist and Nobel laureate Joseph Stiglitz said here on Wednesday.

Speaking at a roundtable discussion entitled "The role of the United Nations and its member states in the ongoing international discussions on reforming and strengthening the international financial and economic system and architecture," Stiglitz said the world is facing its most serious economic downturn since the Great Depression.

"The crisis itself highlights a very important concept that the actions of one part of the economy can affect other parts of the economy. And failures in the financial system have affected the real sectors and many countries in the world," he said.

As the economic turmoil has spread to every country in the world, the participation in designing the response ought to involve all the countries in the world, Stiglitz said.

"There needs to be an inclusive process of decision making, not G8, not G20, but the G192," he said, adding that the U.N. should play a "key role" in the process.

Stiglitz warned that without policy coordination on a global scale, there was the risk that each country would focus only on its own domestic benefits.

The roundtable discussion was part of the three-day U.N. conference on the world financial and economic crisis and its impact on development, which began on Wednesday. Stiglitz is the chairman of the Commission of Experts of the President of the General Assembly on Reforms of the International Monetary and Financial System.

To bring together all aspects of society, Stiglitz said the commission recommends the creation of a global economic coordination council "not only to help coordinate economic policies, but also to identify lacuna in the global economic arrangements, and to identify deficiencies in the global economic arrangements."

Stiglitz said part of the global response should be a comprehensive global stimulus, but developing countries do not have the resources and in some cases do not have the policy space with which to undertake that kind of response. He said the commission suggests reform of the global economic governance.

He said along with the global outspread of the crisis, the developing world has born the brunt of the crisis, suffering from capital outflows, rising borrowing costs, collapsing world trade, lower commodity prices and falling remittances from overseas workers.

Earlier this year, the commission emphasized that international finance structures must be drastically overhauled in the face of the current global economic crisis, calling on wealthier nations to direct 1 percent of their economic stimulus packages to help developing countries address poverty.

Source: Xinhua