Morales about the IMF: “the wolf can not keep the flock”
ennahar 03 April, 2009 07:35:00
The Bolivian President Evo Morales has denounced Friday the injection
of more than 1,000 billion dollars through the IMF against the global
crisis, saying that countries at the root of the crisis can not solve
it, or his words, that “the wolf can not keep the flock.”
“It's like giving money to the wolves, or to entrust the care of the
flock: the wolf is not going to keep the sheep, it will devour them,”
Morales told the foreign press in La Paz, commenting on the decisions
G20 in London to fight against the crisis.
“It is not possible that the countries of capitalism, which has caused
the financial crisis, are now the same from where comes the solution,”
said the Socialist leader, adding that few countries are at the origin
of this financial crisis, but “180 must cope.”
Bolivia is experiencing the beginning of economic deceleration, and is
5% growth at best in 2009, against 6.5% in 2008.
“As long as we do not touch the structural points of capitalism, it
will be difficult to resolve the financial crisis,” said Morales about
the G20. “If we want to solve economic problems, we must first end the
free market, then the speculative capitalism.”
Morales has challenged the role of the International Monetary Fund
(IMF), accusing him of the award of credit conditions, as “the
privatization of our natural resources, our basic services, to
implement the business models that are part of the capitalist system.”
Ennaharonline / AFP
Venezuela's Chavez slams results of G20 summit
03/ 04/ 2009
MEXICO CITY, April 3 (RIA Novosti) - Venezuelan President Hugo Chavez
has harshly criticized the plans to overcome the global financial
crisis announced by G20 leaders after their summit in London.
"I did not expect that such unreasonable and silly decisions would be
taken at the G20 summit," said in a telephone interview with
Venezolana de Television.
The leaders who met in London on Thursday agreed to allocate $5
trillion by the end of 2010 to resolve the global economic crisis,
with one-fifth of the funds going to the International Monetary Fund
and other financial institutions.
Speaking during a visit to Iran, Chavez said the decision to give the
money to the IMF was senseless and would only make things worse, going
on to criticize declarations of increased financial regulation.
"At the summit there was a lot of talk about strict regulation of
financial markets, but they are worth nothing. You have to understand,
it is impossible to regulate the financial monster spawned by the
capitalist system," Chavez said.
According to an aide, Russian President Dmitry Medvedev, who was among
the leaders of industrial and developing countries at the summit,
welcomed the decision to inject funds into the IMF, but said such a
move should be contingent on reform of it and other international
Chavez touches on G-20 summit failure
Venezuela's Chavez says capitalism needs to go down.
Fri, 03 Apr 2009 19:53:48 GMT
Venezuelan President Hugo Chavez says the G-20 summit failed to
address the real reason behind the global meltdown -- capitalism.
Speaking during a visit to Iran, the Venezuelan leader on Friday said
the G-20 nations' plan to spend more than a trillion dollars would
strengthen "one of the great guilty ones behind the crisis: the
International Monetary Fund."
The leaders of the group of 20 industrialized nations who met in
London on Thursday agreed to allocate USD 5 trillion by the end of
2010 to resolve the global economic crisis, with USD 1.1 trillion
going to the IMF.
The IMF and the World Bank are "tools of imperialism" and must be
eliminated, Chavez said, the Associated Press reported.
He also criticized the groups' plan to enlarge the IMF, saying it was
like "entrusting beef to vultures".
In earlier remarks, he also blamed the United States and Britain for
the global financial turmoil, because of the financial model they have
been forcing on the world for years.
"It's impossible that capitalism can regulate the monster that is the
world financial system... Capitalism needs to go down. It has to end,"
Billionaire investor George Soros, meanwhile, has warned that if G-20
efforts to restore stability in the international market fail, the
global economy will head for a huge meltdown.
"That could push the world into depression. It's really a
make-or-break occasion. That's why it's so important. The chances of a
depression are quite high - even if that is averted, the recession
will last a long time. Look, we are not going back to where we came
from. In that sense it's going to last forever," Soros was quoted by
After The Summit: What Was Accomplished & For How Long?
Apr 03, 2009 By Danny Schechter
Danny Schechter's ZSpace Page / ZSpace
Summits Come and Summits Go As The Economy Continues Its Slide
The eyes of the world have been on the Economic Summit in London but the ideas of the world were mostly conspicuous by their absence. Here we have a global crisis. The house is on fire. Unemployment is climbing. The real estate contagion is now claiming condos and even shopping malls. It's bad and by most accounts, getting worse. And, all the "leaders" of the world can do is devote ONE DAY to a forum that must have cost millions to stage.
Our media and politicians love spectacles and political celebrities. The spin was on what Michelle was wearing, not on what Barack was thinking when he was so unwilling to agree to an international regime of regulation which is so clearly needed in a globalized world economy.
The New York Times was properly critical of the Summit for falling "short," mostly focusing on the failure to commit to a larger stimulus package-what the US wanted but didn't get. They went lightly on their criticisms on the regulatory issue. The group also agreed to crack down on tax havens and, on a country-by-country basis, impose stricter financial regulations on hedge funds and rating agencies - necessary though insufficient steps to avoid a repeat of the current disaster." They never asked nor did they fully report on why Obama is "fiercely resistant to the idea of a global regulator." (Bob Jackson of Arizona offered one plausible explanation: "'The one smart thing the President did in London was to establish that the U.S. would not be regulated by global politicians. Our own politicians are corrupt and imcompetent enough, without overt collusion of the politicians from the rest of the world.")
Fortunately, other Times Readers were ahead of the paper and the politicians in comments that could have been but weren't probed in most media outlets.
Jacob Olsson writes: "The lack of deep understanding of economics on the part of American journalists seems to be one explanation for the cheerleading of fiscal stimulus. It is the only solution that has been offered to them by people they trust. The reason this solution has been offered is that it is the only one that is seen to be able to preserve the financial oligarchy, which both Republicans and Democrats hold so dear."
Dwight writes from Brazil: "The US and UK could likely have gotten more concessions on stimulus if they'd admitted that the epi-center of this man-made quake was New York and London, and that thus the US and UK would assume a disproportionate share of the burden.
The Times editorial is full of continued American hubris. Vaguely euro-bashing. No assumption of America's leadership in creating a disaster."
Patrice Ayme writes from Switzerland: "The fundamental cause of the crisis is that the financial sector sucked up all the available world financial credit, and more. Then it lost it all in a fury of ill considered entanglements.
The way out is to outlaw it all retroactively (bankruptcy judges do this all the time at their own scale, so there is no constitution problem to do this, whatever Mr. Summers grumbles about "abrogation"."
Kevin writes from Georgia: "The Europeans were not going to agree to larger stimulus packages for one very good reason. They do not need to have very large stimulus packages. Most G20 European countries have robust safety nets that already take care of their citizens when the economy falters. They also do not have the crumbling infrastructure that America has with regards to transportation, especially mass transit and technological infrastructure."
Butler Crittendon adds from San Francisco: "You seem in denial about America's role in creating the financial disaster we now face. Sure, other global capitalists participated, but in general it was a failure of neoliberal economic policies, spearheaded by U.S. and British bankers. You mention hedge funds, etc., but the only reason we had these monsters was because we permitted it. The exact details of the causes of the crisis are still unknown -- and probably unknowable after so many rats hid their money in secret foreign accounts and had in place a $1000 Trillion of derivatives, CEOs, and the alphabet soup of concocted poisonous 'instruments.'"
These are all important issues but most were buried in the fine print when covered at all. Of course, as is so often the case, high flying rhetoric-and Gordon Brown threw out that old canard about a "new world order"-will not be remembered. What countries do, or fail to do will.
As former CBS correspondent Tom Fenton wrote from London, "The agreements reached at the summit depend on the willingness of individual countries to carry them out. There will be a follow-up summit this fall to check on progress. President Obama said it will take a year or two to tell whether the summit has been successful in lifting the world out of recession. He was right to be cautious."
He was also right to recognize that he didn't accomplish his goal, as veteran British journalist Andrew Neil wrote on the Daily Beast: "For a start, the President did not get what, for him, was the original purpose of this G20 summit: a coordinated global fiscal stimulus. The British media may still fawn before the Obamas the way the US media used to, the First Lady can even touch the Queen in Buck House without being sent to the Tower of London; but the Obama charisma and character could not get an extra cent out of the world community."
So we are back to square one. The markets rose the day after the Summit not because of what was said there but because interest rates were cut in Europe and China released a positive report.
Many politicians have been complicit in the policies that led to the crisis. A banker who was there. Stephen Roach, chairman of Morgan Stanley Asia, said he was worried that "many of the world leaders had gotten into something that was over their heads." Probably true.
What was accomplished? Some windows were broken . A demonstrator died, The police, as usual, overreacted. The media has moved on.
In all, not too encouraging.
News Dissector Danny Schechter blogs for Mediachannel.org. He is making a film based on his new book PLUNDER: Investigating Our Economic Calamity (Cosimo Books at Amazon.com) Comments to firstname.lastname@example.org
After the G20 Summit
Capital's New World Symphony
By JOHN WIGHT
The G20 summit in London has seen the first redrawing of the global economic map since Bretton Woods in 1944, which officially announced the United States as the major global capitalist power, the axis around which every other nation was to revolve economically in the postwar world.
The fact that a G20 summit was convened for the first time, with twenty of the world’s largest economies meeting to decide a new economic template in response to the global recession instead of the usual eight (though Russia’s inclusion in the G8 was merely in deference to her strategic weight rather than her economic size or strength), is significant in itself, an acknowledgement by the postwar capitalist order that the emerging economies of China, India, and Brazil, etc. will be key players in the coming period, not only as sources of cheap labor and resources but as markets for exports.
In effect, emerging from the G20 summit has been the admission that the formerly major markets of Europe and the US can no longer supply the demand for commodities which underpins the global capitalist system, and at bottom the financial system responsible for the economic collapse that has swept the globe.
As the largest economy in the world, the US, under the Obama administration, has embarked on a new strategy as it adapts to the economic reality of the disappearance of the free market from the stage of capitalist history. Managed demand, the adoption of Keynesian doctrine on a global scale, is to be the way ahead, with global institutions such as the IMF and World Bank, formerly twin pillars and enforcers of the Washington free market consensus, now to play the role of ballast of the global economy through the disbursement of aid in order to maintain demand among nations of the G20.
Conditions, of course, are to be attached to such aid in order to ensure that none of the G20 economies adopt protectionist measures to block imports and thereby interfere with that holiest of holies – free trade.
Be that as it may; this new strategy of the US has been adopted with the same priority of global hegemony which has dominated the actions of US administrations since the end of the Second World War. With a 2008 GDP of just under 14 trillion dollars, the US economy continues to stand head and shoulders above its nearest economic rival, Japan, with a GDP of just under 4.5 trillion dollars. In order to maintain this gap, and with it the lifestyles of US consumers, the US realises that it has to ensure that markets for US exports don’t dry up, else demand at home will fall, leading to an increase in unemployment, poverty, and economic slump domestically.
The continuing role of the US dollar as the major international reserve currency, used for the purchase of primary goods such as oil, gas, minerals, and so on by global economies, will continue to allow the US to ramp up huge deficits in order to service a national debt of 11 trillion dollars and continue to fund its monstrous expenditure on defense and war, as well as continuing to meet its diminishing social spending requirements without taxing the rich proportionate to their income.
In other words, attacks on the poor and the working class which have defined US society under both Democrat and Republican administrations since the end of the Vietnam War will continue, though less aggressively than under previous administrations going back to the Reagan years, when the free market structural adjustment of the US economy was unleashed.
By far the most significant aspect of the G20 summit has been the formal inauguration of China as a First World economic power. China’s growth over the past few years has been staggering. The huge growth in Chinese exports over the past few years ($900 billion in 2006) has seen China overtake major export economies such as Germany and Japan, with some economists predicting that China will eclipse the US by 2010 as the world’s major exporter, despite the slowdown caused by the global recession.
However, it is China’s foreign exchange reserves that have increasingly been a major cause for concern to US economists, politicians, and military planners. By the end of 2008 they amounted to $1.9 trillion, a trillion of which is in US treasury bills and notes, making China a major financier of the US deficit. The danger this poses to the US is that if China were to stop purchasing US treasury bills, or worse start dumping them on international markets, the value of the dollar would plummet, the value of US stocks would hit the floor, and an economy already in major recession would fall flat on its back.
But with the current recession being global in scope, and with China’s main export market the US, it is neither in Chinese nor US interests to act in a way that would impact negatively on the other in the current period.
The Obama administration understands this, which is why it has sought to replace the aggressive macroeconomic strategy vis-à-vis China, pursued by the Bush administration, with a more conciliatory one.
The invasion and occupation of both Iraq and Afghanistan was part of this aggressive grand strategy, when using 9/11 as a pretext, the US set out to seize control of Iraq’s vast oil reserves in order to break OPEC’s monopoly and control of oil prices, whilst at the same time being able to control the ever-increasing energy requirements of emerging economies such as China and India. Afghanistan’s role in this process was as a vital transhipment route of energy reserves located in the Caspian Basin.
The economic drain of these military adventures in the short term has had a deleterious impact on the US economy, however, which is why that section of the US ruling class represented by the Obama administration is desperate to pull out as soon as is it is feasibly possible to do so.
As for the majority of the world’s population living throughout the so-called developing world, despite the usual rhetoric about alleviating global poverty, etc., immiseration and despair looks set to continue. Free trade between the G20 economies will not extend to the exports of the world’s poorest economies - economies which for so long have been plundered and ravaged mercilessly by the developed world, making them reliant on loans and aid with a welter of free market conditions attached.
This in effect has turned governments of the developing world into enforcers acting on behalf of global corporations against their own populations, forced to implement the wholesale privatization of social services along with the destruction of domestic agro-economies unable to compete with the subsidised agro-economies of the West.
The end result of this process has been a race to the bottom as workers throughout the developing world have been forced to compete for poverty wages, a direct consequence of those same global corporations scouring the globe looking to drive down production costs in order to maintain profits.
So whilst the global recession is far from over, the complete collapse of capitalism - ruefully predicted by free market ideologues and gleefully predicted by anti-capitalists and socialists - looks to have been averted.
John Wight is a writer and political campaigner based in Scotland.
G20 slammed for 'shortsighted' deal
02 April 2009
Thursday, 2 April 2009 G20 summit ends in London
Millions will suffer from summit failure, says charity
The anti-poverty charity War on Want today condemned Gordon Brown and other G20 leaders for throwing money at the global economic crisis rather than addressing its root causes.
According to War on Want, the G20 has used the London summit to resurrect the failed policies and institutions of the free market era, in a deal which prioritises short-term action at the expense of fundamental reform.
It called for a new world economic system based on principles of public benefit not private profit, achieved through democratic control and a fair redistribution of the fruits of globalisation.
War on Want executive director John Hilary said: "Millions of people will pay a high price for the G20's refusal to address the root causes of the current crisis.
"The world demanded a new economic system which puts the needs of people first. Instead the G20 have just thrown money at the failed institutions of the past."
War on Want said a stimulus package for the developing world is desperately needed. But the G20 decision to treble money available to the International Monetary Fund will resurrect an institution which lacks legitimacy and continues to impose crippling free market conditions on countries which turn to it for help.
The charity also attacked the G20 for its failure to take decisive action to close down tax havens. Tax dodging by corporations costs the UK economy £100 billion a year and deprives developing countries of an estimated £250 billion a year - money which could meet the UN anti-poverty goals several times over.
The charity warned that the G20 leaders' renewed insistence on a conclusion to the Doha world trade talks will deepen unemployment already soaring due to the global economic crisis. This puts 7.5 million workers at risk in Argentina, Brazil, Colombia, Costa Rica, Indonesia, Mexico, Philippines, Tunisia and Uruguay, and millions more in other countries.