This is Not the Time for Begging
by
Fidel Castro
Excerpts from the opening address by Fidel Castro Ruz, President of the Council of State and the Council of Ministers of the Republic of Cuba and host of the South Summit.*
... "Never before did humankind have such formidable scientific and technological potential, such an extraordinary capacity to produce wealth and well-being, but never before were disparity and inequity so deep-rooted.
Technological wonders that have been shrinking the planet in terms of communications and distances co-exist today with an increasingly wide gap separating wealth and poverty, development and underdevelopment.
Globalization is an objective reality underlining the fact that we are all passengers on the same ship, that is, this planet where we all live. But, passengers on this vessel are travelling in very different conditions.
Tiny minorities are travelling in luxurious cabins furnished with Internet, cell phones and access to global communication networks. They enjoy an abundant and nutritionally balanced diet and clean water. They have access to sophisticated medical care and to culture.
But the overwhelming and distressed majority travels in conditions that resemble the terrible slave trade from Africa to America in our colonial past. That is, 85 per cent of the ship's passengers are crowded together in its dirty hold and suffer hunger, disease and helplessness.
Obviously, this vessel is carrying too much injustice to remain afloat and it pursues such an irrational and senseless route that it cannot call on a safe port. This vessel seems destined to collide with an iceberg. If that happened, we would all sink with it.
The Heads of State and Government meeting here, who represent this overwhelming and distressed majority, have not only the right but the obligation to take the helm and correct this catastrophic course. It is our duty to take our rightful place at the helm and ensure that all passengers can travel in conditions of solidarity, equity and justice.
For two decades, a single simplistic message has been related to the Third World and one single policy has been imposed on it.
We have been told that deregulated markets, maximum privatization and the state's withdrawal from economic activity were infallible principles leading to economic and social development.
In line with this, the developed countries, particularly the United States of America, the big transnationals benefiting from such policies, and the International Monetary Fund have, in the last two decades, designed a world economic order most hostile to our countries' progress and the least sustainable in terms of the preservation of society and the environment.
Neoliberalism has put globalization in a straitjacket, globalizing poverty rather than development; violating rather than respecting the national sovereignty of our states, and, in the unequal competition of the marketplace, each looks only to their own interests rather than promoting solidarity amongst peoples.
Two decades of so-called neoliberal structural adjustment have left economic failure and social disaster in their trail, which responsible politicians must confront by taking the crucial decisions which are needed to rescue the Third World from this blind alley.
Economic failure is evident. Under neoliberal policies, growth of the world economy between 1975 and 1998 amounted to hardly half of that attained between 1945 to1975 in the period of Keynesian policies of market regulation and the active participation of the state in the economy.
In Latin America, where neoliberalism has been applied dogmatically, economic growth has not been higher than that attained under the previous state developmentalist policies. After World War II, Latin America had no debt but today we owe almost one trillion dollars.1 This is the highest per capita debt in the world. Also the income difference between the rich and the poor in the region is the greatest worldwide. Now, in Latin America, the numbers of poor, unemployed and hungry people are higher than during the worst times in the region's history.
Under neoliberalism the world economy has not been growing faster in real terms; rather instability, speculation, external debt and unequal exchange have increased, there is a tendency for financial crises to occur more frequently, while poverty and inequality have multiplied and the gap between the wealthy North and the dispossessed South continues to widen.
Crises, instability, turmoil and uncertainty have been the most common words used in the last two years to describe the world economic order.
The neoliberal deregulation and the liberalization of the capital account are having a profound negative impact on a world economy, where speculation in the currency and derivatives markets flourishes and daily transactions, most of which are wholly speculative, amount to no less than 3 trillion US dollars.
Our countries are urged to be more transparent with regard to information and more effective in their supervision of the banking system, but financial institutions like the hedge funds do not provide information on their activities, are wholly unregulated and conduct their operations that exceed the total reserves of all the banks together in countries of the South.
In an atmosphere of unrestrained speculation, the movements of short-term capital render the countries of the South vulnerable to any external contingency.
The Third World is forced to `freeze' its financial resources and become indebted in order to have hard currency reserves, harbouring the illusion that this will help to resist speculative attacks. In the last few years, over 20 per cent of capital inflows were immobilized in reserves but they were not enough to resist such attacks, as was demonstrated in the recent financial crisis in Southeast Asia.
At the moment, 727 billion US dollars from the reserves of the world's Central Banks are in the United States. This leads to the paradox that poor countries offer their reserves as cheap long-term financing to the wealthiest and most powerful country in the world -- reserves which could be better invested in economic and social development.
If Cuba has been successful in its education, healthcare, cultural, science, sports and other programmes, something which nobody in the world would question, despite four decades of economic blockade, and has, moreover, revalued its currency seven times in the last five years in relation to the US dollar, this has been due to the privilege of not being a member of the International Monetary Fund.
A financial system that forces countries to freeze such immense and much-need resources, in order to protect themselves from the instability caused by that very system, and which makes the poor finance the wealthy, should be abolished.
The International Monetary Fund is the institutional emblem of the current monetary system and the United States enjoys veto power over its decisions.
As far as the latest financial crisis is concerned, the IMF showed a lack of foresight and inept handling of the situation. It imposed conditionalities that paralysed the governments' social development policies, generating serious internal problems and preventing access to the necessary resources when they were most needed.
It is high time that the Third World forcefully demanded the dismantling of an institution that is not conducive to stability in the world economy and, instead of working to provide funds to debtor countries so as to help them avoid liquidity crises, protects and rescues the creditors.
What kind or ethic or rationale underpins an international monetary order which allows a few technocrats, whose positions depend on American support, to design from Washington identical economic adjustment programmes to be applied to the wide variety of countries and concrete problems found in the Third World?
Who takes responsibility when the adjustment programmes bring about social chaos, and paralyse and destabilize nations with considerable human and natural resources, as was the case in Indonesia and Ecuador?
It is of crucial importance for the Third World to work to do away with this disastrous institution and the philosophy it represents, and to replace it with an international financial regulatory body that operates on a democratic basis and in which no one has the right of veto -- an institution that would not defend exclusively the wealthy creditors or impose intrusive conditionalities, but would facilitate the regulation of financial markets so as to prevent unbridled speculation.
One way of doing this would be to establish a tax on speculative financial transactions as Mr.Tobin brilliantly proposed, but not of 0.1 per cent but rather a minimum of 1 per cent, which would also permit the creation of a large and crucial fund -- in the excess of one trillion dollars every year -- to promote real, sustainable and comprehensive development in the Third World.
The underdeveloped nations' external debt is overwhelming by virtue of its enormous size, and the outrageous mechanisms of subjugation and exploitation that it involves, and the absurd manner in which the developed countries propose to deal with it.
This debt already exceeds 2.5 trillion US dollars and in the present decade it has been increasing more dangerously than in the 1970s. A large part of this new debt can change hands easily in secondary markets, is more dispersed and more difficult to reschedule.
Once again, I should repeat what we have been saying since 1985: the debt has already been paid if note is taken of the way it was contracted, of the swift and arbitrary increase of dollar interest rates in the previous decade and the fall in primary product prices, a fundamental source of revenue for countries which have yet to develop. The debt continues to feed on itself in a vicious circle where money is borrowed to pay the interest on the debt.
Today, it is clearer than ever that the debt is not an economic but a political issue and therefore requires a political solution. One cannot continue to overlook the fact that the solution to this problemmust basically come from those with resources and power, that is, the wealthy countries.
The so-called Heavily Indebted Poor Countries Debt Reduction Initiative has a long name but is short in results. It can only be described as ridiculous in that it proposes to relieve 8.3 per cent of the total debt of the countries of the South, and, almost four years after its introduction, only four countries among the poorest 33 have managed to get through the complicated process, and then to forgive the minor sum of of 2,7 billion US dollars, which is 33 per cent of what the United States spends on cosmetics every year.
Today, the external debt is one of the greatest obstacles there is to development and one more bomb ready to explode under the foundations of the world economy at any time of economic crisis.
The resources needed for a real to this problem are not large when compared to the wealth and the expenditures of the creditor countries. Every year 800 billion US dollars are used to finance weapons and troops, even after the cold war is over, while no less than 400 billion go into narcotics and an additional one trillion into commercial advertising which is as alienating as narcotics, just to mention three examples.
As we have said before, sincerely and realistically speaking the Third World countries' external debt is unpayable and unrecoverable.
World trade continues to be a means of domination by the rich countries, and will become increasingly so under neoliberal globalization, perpetuating and sharpening inequalities, while also providing the context in which developed countries engage in a fierce struggle between themselves for control over present and future markets.
The neoliberal discourse recommends trade liberalization as the one and only means to achieve efficiency and development. Accordingly, all nations should remove measures protecting their domestic markets, the differences in development levels between countries, no matter how big, not justifying any deviation from this policy to which there is said to be no possible alternative. After hard negotiations in the WTO, the poorest countries have been allowed a short additional period before the full entry into force of this iniquitous system.
While this neoliberalism discourse on the opportunities created by trade liberalization continues to be repeated, the underdeveloped countries' share of world exports was lower in 1998 than in 1953, that is, forty-five years ago. With an area of 3.2 million square miles, a population of 168 million and 51.1 billion US dollars in exports during 1998, Brazil is exporting less than the Netherlands with an area of 12,978 square miles, a population of 15.7 million and exports of 198.7 billion that same year.
Trade liberalization has essentially consisted in the unilateral removal of protective measures on the part of the South, developed economies have failed to do the same so as to allow Third World exports access to their markets.
The wealthy nations have fostered liberalization in strategic sectors associated with advanced technology where they enjoy enormous advantages, which unregulated markets tend to augment. Services, information technology, biotechnology and telecommunications are classic cases.
On the other hand, the agreements reached in the Uruguay Round to remove restrictions affecting agriculture and textiles, which are particularly significant sectors for our countries, have not been implemented because it has not suited the developed countries to do so.
In the OECD, the club of the wealthiest countries, the average tariff applied to manufactured exports from underdeveloped countries is four times higher than that applied to the club members. A veritable wall of non-tariff barriers is raised against the countries of the South.
In the field of international trade there is a hypocritical discourse which combines ultra-liberalism with selective protectionism on the part of the countries of the North.
Primary commodities are still the weakest link in world trade. In the case of 67 countries of the South such commodities account for no less than 50 per cent of their export earnings.
The wave of neoliberalism has undermined the schemes intended to protect the terms of trade of primary products. The dictates of market supremacy do not tolerate `distortions', and hence the International Commodity Agreements and other measures designed to deal with unequal exchange were abandoned. Today, therefore, the purchasing power of such commodities as sugar, cocoa, coffee and others is 20 per cent of what it used to be in 1960, and they do not even cover their costs of production.
Special and differentiated treatment for poor countries has been conceived as a temporary act of charity rather than as an act of basic justice and an undeniable need, both in view of the fact that enormous differences in levels of development make it inappropriate to apply the same measures to rich and poor countries alike, and also in recompense for the colonial past.
The failed Seattle meeting demonstrated the fatigue and the opposition generated by neoliberal policies among growing sectors of public opinion in the South and in the North itself.
The United States of America presented the Round of Trade Negotiations that should have begun in Seattle as a further step in trade liberalization regardless, or perhaps forgetful, of its own aggressive and discriminatory Foreign Trade Act still in force. That Act includes provisions like the "Super-301", a real display of discrimination and threats to apply sanctions to other countries for reasons that go from the assumed imposition of barriers to American products to the arbitrary, deliberate and often cynical assessment of others made by this government on the subject of human rights.
In Seattle there was a revolt against neoliberalism. Its most recent precedent was the refusal to accept the imposition of a Multilateral Agreement on Investment. This shows that the aggressive market fundamentalism, which has caused great damage to our countries, is generating strong and deserved rejection worldwide."
... "The world economic order works to the advantage of 20 per cent of the population but it leaves out, demeans and degrades the remaining 80 per cent.
We simply cannot resign ourselves to entering into the next century as the backward rearguard, poor and exploited, the victim of racism and xenophobia, prevented from gaining access to knowledge and suffering the alienation of our cultures due to the foreign consumer-oriented messages which are transmitted globally by the media.
For the Group of 77, this is not the time for begging from the developed countries or for submission, defeatism or internal divisions. This is the time to regain our fighting spirit, our unity and cohesion in defending our demands.
Fifty years ago we were promised that one day there would no longer be a gap between developed and underdeveloped countries. We were promised bread and justice; but today we have less and less bread and more injustice.
The world could be globalized under the rule of neoliberalism but it is impossible to govern billions of people who are hungry for bread and justice.
The pictures of mothers and children under the scourge of droughts and other catastrophes in whole regions of Africa remind us of the concentration camps in nazi Germany; they bring back memories of piles of dead or dying men, women and children.
Another Nuremberg is needed to put on trial the economic order that has been imposed on us, and which each three years kills more men, women and children of hunger and preventable or curable diseases than all those killed by World War II in six years. We should discuss here what is to be done about that.
In Cuba we say: `Our Homeland or Death!'. At this Summit of the Third World countries we would have to say: `Either we unite and co-operate closely, or we die!' "
*Unofficial translation from the Spanish by the South Centre.
1 In this text a billion is counted as a thousand millions, and a trillion is a million millions or one thousand billions.