The Guardian February 24, 1999


The crisis is inevitable

Although executives from the major banks and important international 
financial institutions did not attend the recent International Encounter of 
Economists on globalisation and the problems of development, held in 
Havana, almost 800 economists from 50 countries, representing many 
significant currents of economic thinking, did.

In his opening remarks, Cuban President Fidel Castro emphasised that we are 
entering an epoch in which we have to begin to reconcile concepts of 
sovereignty or the nation state with some kind of universal sovereignty. A 
united world, a world with direction, he told the conference, holds no fear 
for him, given that such a world is needed.

Following the thread of this issue, President Castro pointed to a certain 
embryonic direction in the UN, although this institution needs to be 
democratised.

"Any of the world's dreamers", he said, "could dream this: that humanity is 
the great nation of everyone and technologies and many other creations of 
humanity should be at its service.

"Moreover", he warned, "if this objective is not attained, the species will 
not survive; we are looking at a world that will not exist in 500 years, or 
in 100 years; we are looking at a world that has at most 40, 50 or 60 
years."

In the course of the conference, various experts, such as Professors 
Alfredo and Eric Calcagno of Argentina, criticised the presentation of 
globalisation as an absolutely new phenomenon lacking in historical 
antecedents.

The speakers showed that globalisation, far from being a mysterious late-
20th century phenomenon, is a process originating within capitalism itself.

They said it had acquired a greater dimension as a consequence of the 
neoliberal ("economic rationalist") current of the 1980s, a trend "that 
favoured the collapse of the socialist camp and the disintegration of the 
Soviet Union".

There were approximately one hundred speeches by specialists and personnel 
from institutes and other entities, covering such subjects as the decline 
of the global economy, the economic invasion of the moral and political 
order, the distribution of power, the fragility of banking systems in the 
developing countries, financial crises (and filibustering in that context), 
and attacks on the monetary system, among other issues.

Mexican academic Arturo Huerta from the Autonomous University of Mexico, 
observed that globalisation is de-capitalising the productive sphere to the 
benefit of finance capital.

Ariel Franais, from the United Nations Development Program (UNDP), noted 
that the exhaustion of the model of capital growth and accumulation that 
had prevailed in the world economy starting from the end of World War II is 
at the bottom of the crisis.

The shortage of natural resources, rising prices, alongside the population 
explosion, has coincided with unforeseen technological developments in the 
search for reduced costs and the squandering of raw materials.

At the same time, unemployment is increasing and, as a result of neoliberal 
recipes, many states are encouraging the privatisation of their principal 
industries and productive sources.

This policy is referred to as economic reform but, in real terms, states 
are being robbed of their sovereignty.

World Bank representative Andres Solimano commented that reforms take time, 
given that changing economic and institutional structures is a process of 
decades.

However, he had nothing to say on Third World debt, the transfer of capital 
to the United States and other powers, or on the measures which allow them 
to adjust to the new international economic order, or neoliberal 
globalisation.

That led to a consensus that the crisis which is provoking that situation 
will expand and affect stockmarket movements, as occurred in Mexico, then 
in South East Asia and, more recently, in Russia.

The Havana did not offer recipes, but was a favourable tribunal for 
reflection and even censure, as exemplified by Mexican analyst Alfredo 
Jalife, who presented a paper on financial filibustering, megaspeculation 
and case studies.

Naturally, economists participating in the meeting were aware of the 
activities of powerful speculator George Soros (who did not attend the 
event, although invited).

Nonetheless, his modus operandi was a revelation, as, according to Jalife, 
Soros utilised crooked electronic betting to initiate the attack on the 
baht, Thailand's national currency, which unleashed the Asian crisis, in a 
domino effect.

Soros was also accused by the President of Malaysia of having withdrawn 
hundreds of millions of dollars from Malaysian banks in a few hours, thus 
extending the crisis to that country.

The Mexican analyst recalled that, with his "letter to the editor" of 
The Financial Times, Soros provoked the collapse of the Russian 
ruble, basing his bets on "quantum theories and the precepts of chaos 
theory", applied in an atmosphere of psychological panic to maximise the 
profits of megaspeculators who operate methodically from their "off-shore" 
fiscal paradise redoubts in the Cayman Islands and other locations.

In his closing remarks to the conference, the Cuban President, Fidel 
Castro, posed the question: Is globalisation an irreversible process? "My 
answer", he said, "the one I give myself, is: `No!'."

President Castro went on: "What type of globalisation do we have today? A 
neoliberal globalisation; that is what many of us are calling it. 

"Is it sustainable? No. Can it survive for much time? Absolutely not. A 
matter of centuries? Categorically not. 

"Will it only last a few decades? Yes, only decades. But sooner or later it 
will have to come to an end.

"Maybe you think I'm a kind of prophet or fortune-teller? No. Do I know 
much about economics? No. Virtually absolutely nothing. 

"To affirm what I said it's enough to know how to add, subtract, multiply 
and divide. Children learn that in elementary school.

"How is the transition going to come about? We don't know. Through 
widespread violent revolutions or great wars? That would seem improbable, 
irrational and suicidal.

"Through profound and catastrophic crises? Unfortunately that seems the 
most likely, almost inevitable outcome, and it will come about in many 
diverse ways and through many forms of struggle.

"What kind of globalisation will it be? It couldn't be any other than 
jointly shared  socialist, communist, or whatever you want to call it.

"Does nature and, with it, the human species, have much time to survive the 
absence of such a change? Very little. Who will be the creators of that new 
world? The men and women who people our planet.

"Is this about a utopia, one more dream among so many others? No, because 
it is objectively inevitable and there is no alternative. It was already 
dreamed not so long ago, only perhaps prematurely.

"As Jose Marti, the most enlightened of the sons of this island, said: `The 
dreams of today will be the realities of tomorrow'."

The megabanks and their emulous speculators will be the theme of the second 
encounter of economists on globalisation and development, convened for the 
year 2000, in Havana.

* * *
Compiled from reports in Granma

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