“Economic Genocide” in Latin America: The Unspoken Legacy of Wall Street and the IMF. President Cristina Fernandez

United Nations General Assembly, September 24, 2014: Argentina's President Fernandez de Kirchner Denounces Economic Terrorism

By Carla Stea

Dazzling and supremely erudite, Argentina’s President Cristina Fernandez Kirchner denounced as terrorism the economic policies that have been strangling the developing world during the past century, and are continuing these criminal actions today, the legacy of Milton Friedman’s Chicago Boys’ gangster economic policies. These policies, implemented by the infliction of “shock therapy,” institutionalizing torture, murder and disappearances of individuals, groups, and often heads of state who defy these barbaric economic models, are policies which are more accurately described as global economic theft, sanctioned by the theory that “might makes right.”

The IMF’s “conditionalities” were described, in sanitized language, as “structural adjustment programs,” demanding the obliteration of free national education and health care programs, causing the destitution of majorities of citizens in the developing countries, and resulting in the gross indebtedness of collaborating governments to parasitic interests of multinational corporations, banks, hedge funds, vulture funds and their ilk. The Milton Friedman Chicago Boys policies were described by one of Friedman’s most brilliant students, the German born economist Andre Gunder Frank, as “economic genocide.”

President Kirchner described her late husband, President Nestor Kirchner’s success in rebuilding Argentina, despite the total bankruptcy into which decades of the Chicago Boys policies had plunged a devastated Argentina. She described the earlier chaotic situation, in which Argentina had five presidents in one week during 2001, a disaster rivaled, perhaps, only by Bolivia, which, similarly hostage of the Chicago Boys, had three revolutions in one afternoon, finally resulting Bolivia’s progressive presidency of Juan Jose Torres in 1970. President Torres was overthrown, ten months later, by fascist General Hugo Banzer, with the blessing of Washington, and was then murdered in Argentina in 1975.

The earlier history of Argentina described by President Kirchner, a history common to almost all Latin America Southern Cone governments hostage to the Chicago Boys’ policy of economic genocide, is succinctly summed up by Professor John Dinges in his work “The Condor Years,” (Pages 154-155).

[By 1975], “Inside the U.S. embassy Legal Attache Robert Scherrer quickly developed information that the Torres murder was part of the new security forces cooperation among the military governments…the bloody reality of mounting repression and the assassination of three prominent figures – the Uruguayan Senators Michelini, Gutierrez and Bolivian President Torres who had sought protection in Argentina… .Slowly, among those reading the most secret intelligence traffic about Latin America – in the embassies, in the CIA, in the Defense Intelligence Agency, the FBI and the State Department there was an awakening to a flow of hard evidence that was soon to become a flood: that by 1975 the government of Argentina was committing human rights violations on a massive scale never before seen in Latin America, and the six military governments of the Southern Cone were cooperating to assassinate one another’s opponents.”

This was the Argentina in which Presidents Cristina and Nestor Kirchner spent their earliest years. This was the environment in which the Chicago Boys’ murderous economic policies were forced down the throats of the majority of Argentina’s citizens, utilizing torture, murder and “disappearances” to facilitate the “privatization” of the country’s resources in the organized theft of the nation’s patrimony. This theft was engineered by one of history’s most deadly mobs of criminals, the Chicago Boys, trained by the sociopath Milton Friedman, who was awarded the Nobel Prize for economics in a decision grossly discrediting the legitimacy of the Nobel Committee.

President Kirchner described the economic and social recovery steered by her husband, President Nestor Kirchner, a program of social and economic inclusiveness which made education widely available to Argentina’s majority, which decreased unemployment while establishing social safety nets, a program in which Argentina’s economy began to thrive, as Nestor Kirchner weaned Argentina’s economy from the IMF ‘debt trap’ (the title of the superb book by economist Cheryl Payer), and made arrangements to pay off the astronomical debts amassed during the previous period of economic domination by the Chicago Boys, (debts for which Nestor Kirchner’s government was in no way responsible). President Cristina Fernandez Kirchner spoke with legitimate pride of Argentina’s success in reducing widespread poverty, despite the financial disaster engineered by the thugs of the international financial system who are currently still attempting to hold Argentina hostage.

President Kirchner voiced the concerns of the greater part of the developing world, which voted on September 9, 2014, for the United Nations General Assembly resolution: “Toward the Establishment of a Multilateral Legal Framework for Sovereign Debt Restructuring Process.” Argentina’s Foreign Minister, Hector Timerman (whose father, the great journalist and human rights advocate, Jacobo Timerman, had been imprisoned and tortured for two years in Argentina during that same “dirty war” of 1976 described earlier) introduced that resolution, “establishing an ethical political and legal pathway to end unbridled speculation.” The resolution was adopted, with 124 nations supporting it, eleven nations opposing it, and forty one abstentions…The scandalous profits made by parasitic “vulture funds” are funneled into campaign and lobbying to prevent change in the current viciously unjust economic architecture. The Cuban delegate stated the appalling fact that “Developing countries had paid many times the amounts originally received as loans and that devoured resources essential for development.” The distinguished American economist Joseph Stiglitz has repeatedly emphasized precisely this same fact.

President Kirchner denounced U.S. Federal Judge Thomas Griesa, whose currently strangling injunctions, prohibiting Argentina’s repayment of 92.4 percent of the debt until the “vulture funds” are paid in full, would force the return of Argentina’s economy to destitution, totally destroying the new economic and social programs which are empowering Argentina’s majority, and would quickly restore the earlier squalor of the economically colonized Argentina into which Milton Friedman’s thugs and the IMF had forced Argentina to subsist for decades of Kirchner’s earlier life.

In her masterpiece, “The Shock Doctrine,” exposing the criminal thuggery of Friedman’s Chicago Boys, Naomi Klein states:

“In the early nineties, the Argentine state sold off the riches of the country so rapidly and so completely that the project far surpassed what had taken place in Chile a decade earlier. By 1994, 90 percent of all state enterprises had been sold to private companies, including Citibank, Bank Boston, France’s Suez and Vivendi, Spain’s Repsol and Telefonica. Before making the sales, (former President) Menem and (former Finance Minister) Cavallo had generously performed a valuable service for the new owners: they had fired roughly 700,000 of their workers, according to Cavallo’s own estimates; some put the number much higher. The oil company alone lost 27,000 workers during the Menem years, An admirer of Jeffrey Sachs, Cavallo called this process “shock Therapy.” Menem had an even more brutal phrase for it: in a country still traumatized by mass torture, he called it “major surgery without anesthetic.”*

“* In January 2006, long after Cavallo and Menem were out of office, Argentines received some surprising news. It turned out that the Cavallo Plan wasn’t Cavallo’s at all, nor was it the IMF’s: Argentina’s entire early-nineties shock therapy program was written in secret by JP Morgan and Citibank, two of Argentina’s largest private creditors. In the course of a lawsuit against the Argentine government, the noted historian Alejandro Olmos Gaona uncovered a jaw-dropping 1,400 page document written by the two U.S. banks for Cavallo in which “the policies carried out by the government from ’92 on are drawn up…the privatization of utilities, the labour law reform, the privatization of the pension system. It is all laid out with great attention to detail

….Everyone believes that the economic plan pursued since 1992 was Domingo Cavallos’s creation, but that’s not the way it is.” In the long term, Cavallo’s program in its entirety would prove disastrous for Argentina.

…So many jobs were lost that well over half the country would eventually be pushed below the poverty line.”

As President Fernandez Kirchner charges, today it is obvious that U.S. Federal Judge Griesa’s ruling is an attempt to destabilize Argentina, using a new imperialist tactic devised by the current gangsters of international capitalism who thrive by devouring the lives and patrimony of the majority of citizens of the developing world, and, indeed, impose these tactics upon the “99%” percent of citizens within the countries of the developed world.

President Fernandez Kirchner explicitly denounced as economic terrorists the “vulture funds” which, supported by the United States’ judicial system, are attempting to destabilize and ultimately overthrow her government. She stated: “Not only those who place bombs are terrorists, but also those who destabilize the economy of countries, and cause hunger, misery and poverty from the sin of speculation.”

Judge Griesa is attempting, in fact, to fine Argentina $50,000 per day for not complying with his ruling, and declaring Argentina in contempt of court.” In response to his brutal arrogance, President Kirchner cited a quote from former UK Prime Minister Gordon Brown, who described such “creditors” as immoral, preventing countries from tackling problems of education, health and poverty.

Argentina’s president spoke fiercely of such engineered poverty and destitution as creating fertile breeding ground for terrorist leaders recruiting among those who have lost all hope of lives affording them options for fulfillment and dignity, and her voice echoed, 35 years later, the speech delivered on August 27, 1980 at the United Nations Eleventh Special Session on Economic Development: “Toward a New International Economic Order”: Joaquim Chissano, then Foreign Minister of Mozambique addressed the General Assembly, decades ago, and stated:

“The existing economic order is profoundly unjust. It runs counter to the basic interests of the developing countries…we see the perpetuation of underdevelopment in Africa, Asia and Latin America. The peoples of those continents are forced to face hunger, starvation, poverty, nakedness, disease and illiteracy increasingly. We denounce any kind of economic prosperity or independence for part of mankind built on the dependence, domination and exploitation of the rest of mankind…the developing countries have warned the world about the need to take measures to eliminate the main obstacles to emancipation and progress of the peoples struggling for a proper standard of living which would meet the basic needs of life.

…During the colonial period we were branded as rebels and insurgents when we demanded the restitution of our status as human beings. When we demanded independence we tried to talk peaceably with our masters, but no one would listen. The dialogue of force was imposed upon us. We took up arms. Much blood was spilt. But only in that way were we able to win.”

Twenty-nine years later, at the 64 Session of the United Nations General Assembly, on September 24, 2008, Stjepan Mesic, President of the Republic of Croatia, and the last President of Yugoslavia stated:

“Our world is finally still dominated by an economic model which is self-evidently exhausted and has now reached a stage where it is itself generating crises, causing hardship to thousands and hundreds of thousands of people. If one attempts to save this already obsolete model at any cost, if one stubbornly defends a system based on greed and devoid of any social note worthy of mention, the result can be only one: social unrest harboring the potential to erupt into social insurgence on a global scale.”

Cristina Fernandez Kirchner, President of Argentina today raises her powerful voice in, once again, the noble call for economic and social justice. Those who are guilty of perpetuating the injustices she and so many other world leaders abhor walked out of the hall as she spoke. And those are the ones who may ultimately pay the fatal price for ignoring her warning.

October 25, 2014

The Centre for Research on Globalization

The Bolivarian Alliance for the Peoples of Our America (ALBA) goes beyond cooperation, says Mexican economist

HAVANA, Cuba (ACN) -- The Bolivarian Alliance for the Peoples of Our America (ALBA) is an institution that goes beyond cooperation among its member countries as it includes monetary and financial integration, said Mexican economy expert.

Jaime Estay, with the Autonomous University of Puebla spoke about the topic on the third day of sessions of the 12th International Meeting on Globalization and Development Problems underway in Havana.

The academician said ALBA has found solutions to deal with the current world financial crisis generated by a global monetary disorder resulting from the weakness of the US dollar and by policies implemented by the International Monetary Fund (IMF).

Estay pointed out that Latin America is leading national and multilateral actions at regional level to mitigate the negative effects of the crisis on local economies.

The Mexican expert described as inadmissible that Group 20, constituted by industrialized and emerging nations, were entrusted with the responsibility of adopting the measures to overcome the world economic crisis.

G-20 undertook the roll without paying attention to the fact that the UN General Assembly, made up by 192 member countries, was summoned for a meeting to analyze the world situation deal and ended with plans of actions set up.

Estay said G-20 has not touched structural features of the global economy and mentioned as an example of such behavior the fact that the IMF has paradoxically grown stronger lately instead of having disappeared for being one of the leading originators of serious monetary and financial problems.

Likewise, attending Havana’s meeting, Manfred Brenefeld, with the University of Ottawa, Canada, warned that the crisis has driven the world to follow the path to social democracy or fascism in certain countries, politically speaking.

According to the Canadian expert, the most effective and plausible way would be social democracy, but as a prelude to new true socialism, which he said should be credible and possible for the peoples.

Our mission is to make that Socialism understandable, Brenefeld said.

With some 1,000 Cuban and foreign participants, the 12th Int’l Meeting on Globalization and Development Problems will run until next Friday, March 5 in Havana.

Thursday, March 4, 2010

caribbeannetnews

Bahamas Blog International

How realistic is it for the Caribbean to join the G20?

By Dr Isaac Newton and Debbie Douglas:

In the Caribbean, schisms have opened up over such pressing issues as immigration, foreign policy agendas, borrowing from the IMF, implementation of the Caribbean Court of Justice, viability of the Caribbean Single Market Economy, and leadership clarity over regional direction.

More worrisome are: inadequate critical discussions on national and regional issues over the development of the region, preferred worldview that excellence is imported and things foreign are superior, and threats over sub-regional and regional splits on South American alliances.

But excluded from serious public debates are priorities such as ecological security, fiscal scare, die-hard poverty and rising debt. The paradox is that year after year, the Caribbean spends wasteful resources on conferences that do not yield positive outcomes.

Yet, in this climate, some conscientious political analysts and social scholars attempt to differentiate local realities from global trends. They are on a mission to decipher where points of intersection could help clarify, the key variables needed for the Caribbean to forge its own success pathway.

Against this wider backdrop, former Antigua and Barbuda diplomat, Sir Ron Sanders has written two articles: “Can the Caribbean rely on the G20?" and "Who is listening when the Caribbean speaks?”

We have read Sir Ron Sanders’ admirable endeavors to support Caribbean leaders by articulating why they should be given a place at the table where decisions that affect them, directly and indirectly, are made. Such places include the G20, the IMF, and the World Bank.

We know that the Caribbean has played a significant historical role in providing resources that European countries and the USA used to catapult their societies into advanced economies. We are aware also that the Caribbean continues to advance ideals of democracy, with geographic strategic value for Europe and North America. From this angle, we resonate with Sanders’ righteous anger, for rallying against wrongheaded attitudes that arrogantly dismiss the Caribbean and arbitrarily victimizes poor regions.

We particularly embrace Sanders’ enormous optimism, and praise his outstanding passion for envisioning the Caribbean as qualified to enter into the G20 circle. But we are aware of the dizzying nature of how unlikely his goals are to be attained. Added to that, is the unsentimental cost of the possibility of being slighted by the major powers of the world.

There is a difference between a coconut tree and a lamp post-- both are firmly planted in the ground-- one has roots but the other does not. In the same way, Sanders’ desire may be exceedingly earnest but his declaration appears incredibly inaccurate. For the Caribbean to execute its lofty goal of achieving G20 status, it must be willing to put vital steps in place to get there.

At best, Sanders’ articles contribute to our understanding of how geo-politics and ethics are deeply connected to our conceptions of sustainable development and identify. At worst, his ideas illustrate how the Caribbean itself, fails to create added value to penetrate world shaping institutions like the World Bank, the IMF and the G20.

First, the G20 nations deliberately set up structures to protect self interests; they are not too much concerned with building bridges or even recognizing how their fate and the Caribbean’s destiny are interlinked. When shoring up their faltering economies, being charitable towards the Caribbean, is the last thing on their minds.

Second, the very nature of G20 is discriminatory. It is designed for well developed and highly integrated economies both to support each other and to superimpose their collective financial agendas on the rest of the world. The Caribbean’s economies are too meager and far too insignificant to be considered worthy of inclusion.

Third, although ‘a little leak can sink a big ship’, Caricom seems inept, to reverse president Jean Bertrand Aristide’s ousting, when outside powers, unseated a democratically elected leader, from amongst its rank. It took an African country to offer him a place of refuge.

Fourth, until the Caribbean gets its strategic intelligence, market integration, immigration freedom, and innovative educational practices act together, our future seems dismal. Caribbean leaders must concentrate on internally derived development solutions, and on the capacity to ignite the genius of its people, both at home and abroad, to facilitate its growth. Since these dynamics are not in place, why should the most powerful countries in the world, listen to the Caribbean or take our issues seriously?

The fact that so much is at stake, yet we continue to fight ever so often, over narrow terrain of resources and interests, knowing full well, that such infighting has dire consequences for our collective future, suggests that our moral compass is not set in the direction of self-empowerment.

We have our internal work cut out for us, and maybe feelings of being flatly ignored, is a clarion call to explore possibilities for sustainable unity, which is essential for regional advancement.

Perhaps the time to shift strategy and begin to rethink, how to fashion our destiny, from the inside out, while not dismissing the supreme value of finding relevant global partners, to harness mutually beneficial interests, has come.

Sanders’ highly ambitious enterprise, and remarkably, in these difficult economic and social times, places the cart before the horse. Therefore, we read his unique advocacy, more as an investment in encouragement, than as a signature of regional readiness and achievement.

The sentiments in his articles imply that our self-promoting agendas, (we can’t even get the China/Taiwan issue straight) that foster regional hierarchies and that work counter to the need to be critically conscious about the way forward, must be first clarified.

Invisibly and thence consciously, until we nurture a strong sense of ‘regionhood,’ which is indissolubly tied to the power of representation, we will be left out of important decision making processes.

Essentially, the Caribbean must find productive methods of listening to each other. We must speak with one voice by packaging indigenous issues in convincing frameworks to the G20, the World Bank and the IMF. This will increase our clout.

There is plenty of merit for the Caribbean wanting to have its own representation in international gatherings. We can no longer simply react to policies. We must provide intelligent input to shape and implement them. But to have our concerns addressed realistically, depends on our perceived and real weight.

For example, what are we bringing to the international table and how are we communicating added value? Do we have the leadership to build a sustainable regional economy to earn a place at the G20? Do we invite our most competent people to represent our views at the World Bank and the IMF?

No one will listen to us, if we continue to be disunited and needy. In short, we have a lot of growing to do, before we develop the capital to get the deference and high regard needed to wield influence on the global landscape. We wonder, what will quicken in our souls, given how far from the G20 mark we are, for us to realize that seven requests, of wanting to be included, do not an invitation make?

Ultimately, the Caribbean needs to cultivate a robust self-confidence to excel at prosperity-generating ideas. We must also learn to model a quest for excellence through virtues of mutual affirmation, cultural creativity, justice and fairness, critique and rejuvenation.

In essence, the Caribbean must find strategies to ensure that its place in the global-mix is not compromised. Preserving our best cultural features, should involve arresting the attention of global players, in our pursuit of ambitious exploits.

While some amongst us are worrying about the big questions—like, ‘How to develop the Caribbean as a major world force?’ Caribbean leaders have smaller concerns to tackle—‘How to harness and unify the Caribbean’s best energies (human and natural) for its own survival?

Perhaps we must earn inclusion, before we demand it. We need to unite, define our regional interests, build our economies to attain G20 status, and carve out a strategy that advances our needs/wants effectively, to rightly gain the possibility of a place at the table.

Dr Isaac Newton, an international leadership and management consultant, is a graduate of Harvard, Princeton and Columbia, and Debbie Douglas, a legal analyst and government relations consultant, is a graduate of McGill University, Stockholm University and University of London.



caribbeannetnews

Bahamas Blog Bahamas

Who's listening when the Caribbean speaks?

By Ronald Sanders:

In Turkey, where meetings of the IMF and the World Bank were held during the week of October 4th, Caribbean Finance Ministers raised with the First Deputy Managing Director of the International Monetary Fund, John Lipsky, their concerns about “the need for better representation and participation of small, developing countries in key meetings and fora such as the G20, where decisions that can significantly impact these small economies are frequently made”.

But, Caribbean representation in the already overcrowded G20 will not happen without a strong case being made and accepted by governments currently at the table.

Similarly, much needed reform of the IMF and World Bank to benefit the Caribbean appears remote.

At the Bank/Fund meetings, the President of Guyana, Bharat Jagdeo, as current Chairman of CARICOM, led a team of Prime Ministers from the Bahamas, Barbados and St Lucia to make a case to the President of the World Bank, Robert Zoellick, that special attention should be paid to relieving and restructuring the debt of the highly indebted, vulnerable, middle income countries of the region.

And, Barbados Prime Minister, David Thompson, speaking at the formal meeting was emphatic that “limited access to World Bank funding has forced many middle income Caribbean countries to borrow in the private capital markets at substantially higher rates and shorter repayment terms”. Mr Thompson recommended that “further consideration be given to this issue of access by middle income countries to financing from the multilateral financial institutions.”

All of this is right. The entire Caribbean region is facing a serious reversal of its economic and social progress arising from a number of factors. It is true that one of the significant factors is poor economic management and decision-making by some of their governments, and this is a concern that Caribbean countries must themselves address.

The external factors are also real. Not least among them is the point raised by both Jagdeo and Thompson that the classification of Caribbean states as middle-income countries disqualifies them from concessionary financing from the international financial institutions and forces them into the commercial market for borrowing.

But, is anyone really listening? The moment for effective reform of international institutions is fast receding. Those industrialised nations that pledged themselves to reform in the wake of last year’s financial crisis are quickly retreating from their pledges as their economies begin to pick-up. The creation of the G20 and the provision of some additional resources to the IMF appear now to be the most they will do.

The new resources for the IMF are insufficient and, in any case, are not targeted to middle income countries such as those in the Caribbean; they are focussed on low income countries and on bigger countries such as those in Europe and Mexico.

A so called Flexible Credit Line has been introduced by the IMF “for countries with very strong fundamentals, policies, and track records of policy implementation”. Caribbean countries will not qualify for among the criteria are: a track record of steady sovereign access to international capital markets at favourable terms, and sound public finances including a sustainable public debt position.

Why these criteria should be relevant instead of ones that recognise the need to stimulate stagnant economies and provide support for social welfare programmes speaks to the anachronistic role of the IMF which still operates as an agency of the victors of World War 11, despite all the rhetoric.

As for the World Bank, the Turkey meeting deferred any increase in its capital until next year. Therefore, the Bank is faced with a limited lending capacity, and in this scenario, countries such as those in the Caribbean that are designated middle-income are not a priority.

Caribbean Heads of Government and Finance Ministers raising their concerns with Heads of the International Financial Institutions and in the formal sessions of the Bank/Fund meetings was absolutely right. They do not get much chance to do so, Caribbean countries have no seat of their own on the Boards of these bodies where they are represented by Canada. And, while Canada may be a sympathetic ally, there is no substitute for authentic argument from high representatives of Caribbean countries themselves.

In this connection, the prospect of any reform of the international financial institutions that would benefit the Caribbean in terms both of representation at the highest levels and change in IMF conditionalites and World Bank criteria for concessionary financing, does not appear to be on the cards anytime soon.

This is why Caribbean countries should adopt a collective and cohesive approach to this issue devoting resources to a joint and continuous diplomatic effort to put their case forcefully to the international community at every opportunity.

It is well within the region’s capacity to establish a task force of public sector and private sector professionals, under the umbrella of a special unit of the CARICOM Secretariat, to undertake this task. The task force could be mandated to produce documentation with all the necessary rigour for presentation to the Boards of the International Financial Institutions and to influential governments. Much of this work has already been done by a group established last year under Caribbean Development Bank President, Compton Bourne.

In turn, high regional representatives led by one or other of available Heads of Government could be appointed to engage the international community in an intense campaign on the basis of a well-debated and agreed CARICOM strategy.

The Commonwealth Heads of Government Conference in Trinidad in November presents a unique opportunity to make the Caribbean case to five Heads of Government of G20 countries – Australia, Britain, Canada, India and South Africa. They may not get far with Australia and Britain, but India and South Africa with whom they have close links, and Canada with whom they share a common neighbourhood should listen.

The Commonwealth Secretariat has itself done a great deal of work on small states and reform of International Financial Institutions. The November Commonwealth Summit, therefore, is an excellent forum for the Caribbean to advance a cohesive campaign.

October 9, 2009

caribbeannetnews

Bahamas Blog Bahamas

The G7 passes the buck to the G20

• Impossible to certify the end of capitalism’s global crisis

Joaquín Rivery Tur

THEY may be the 20 countries with the most economic weight in the world, but they are not wizards, nor are their computers fortune-tellers. Nobody on the planet can sign the death certificate of capitalism’s global crisis. What just took place in Pittsburgh, in the United States, is best described as buck passing.

The Group of Eight (G8: United States, Canada, Japan, Germany, Britain, France and Italy plus Russia) was unable to deal with the global crisis, much less with controlling the tangled neoliberal financial web of the capitalist system, and had no choice but to pass it on to the Group of 20, possibly to dilute the responsibility of the world’s most developed countries for the economic turmoil into which the planet has sunk, and to look to another 12 nations to share the blame.

In reality, the Pittsburgh Summit represents the total failure of the richest nations in their desire to rule and exploit a world that is totally ungovernable for two reasons; one, the social movements are increasingly up in arms over the generalized injustice and, two; the large financial corporations have rooted their power within the highest layers of officials, so as to have free reign for their profit ambitions and, therefore, they cannot be controlled. Governments have always been accomplices.

According to the news agencies, the leaders of the G20 — within which the seven richest nations have greater ability to exert pressure, more influence and the power to coerce — agreed that the new group is to be transformed into "a principal forum for international economic cooperation."

That is an ambiguous sentence. It assumes that the fundamental purpose of the meeting was to collectively attain greater control over financial corporations in order to avert – as far as possible – the risks of a crisis as profound as the one humanity is currently experiencing. In fact, in order to do so, the seven richest countries demonstrated their will to increase by at least 5% the voting power of emerging countries — such as China, India, Brazil and others — within the International Monetary Fund (IMF), as if that could actually change the relationship of forces, and above all, as if the move signifies a major change in the international financial architecture, which the underdeveloped countries have been demanding.

The summit called for stricter regulations on banking activities and limiting bonuses paid to banking/financing executives, who had the power to raise their own bonuses by millions, even in cases where their companies were showing losses that resulted in bankruptcy.

The problem is that a 5% increase in voting power for emerging countries does not mean, for example, that the United States will lose its veto power in the IMF or the World Bank. Instead, it retains a strong lever of pressure, mostly on the Third World, which desperately needs help and investments to pull it out of underdevelopment, but without those nations becoming part of the crazy model of U.S. consumption, which is leading the world to environmental destruction due to climate change and the depredation of nature.

The measures approved in Pittsburgh are an attempt to avoid the phenomena that led to the formation of financial bubbles with a tremendous capacity for explosion and the creation of new crises, but the most serious problem will be how to really control the financial giants, and how to dictate mandatory regulations to govern their fraudulent operations. Is that possible in unbridled capitalism?

It is very difficult not to hold the IMF responsible in good part for what is happening internationally, because its experts should have realized that the financial bubble was about to burst.

On top of the repeated affirmations about how everybody is supposedly emerging from the crisis, in a contradictory fashion, the G20 agreed not to withdraw government aid packages to the major corporations because of a risk of another downturn. Even Chinese President Hu Jintao stated that the alleged recovery "is not as yet solid," and he wasn’t exactly referring to his own country, where not even the crisis has been able to deter its booming economic growth.

Apparently, nobody has learned anything. The G8 (which still exists) has incorporated another group of countries into its vicissitudes, but even that is not a solution, because it is a question of agreements within capitalist globalization, whose neoliberal character is incompatible with government controls. Nevertheless, protectionism is still growing.

The big banks want deregulation, absolute freedom to cheat and take risks in order to satisfy the adrenaline needs produced by financial speculators’ ambition for profits.

With respect to the famous bail-out, in early September, the Federal Deposit Insurance Corporation in Washington revealed that in the second quarter, banks with capitalization and bad loan problems (impossible to collect) totaled 416; in other words, 111 more than in the previous period. A very befogged atmosphere.

The IMF put the frosting on the cake of the crisis a few days ago, when it announced that the planet-wide financial hurricane will affect economic growth for at least seven years, and suggested — now! — the implementation of structural reforms. The result of the crisis forecast by everybody is less employment, less growth, less investment and less productivity. The problem is not one of phenomenon, but of essence. It is called capitalism, no matter how many times you spin the wheel.

granma.cu

Bahamas Blog Bahamas