The original article is at http://casinocrash.org/?p=235 .

An initial response from individuals, social movements and non-governmental organisations in support of a transitional programme for radical economic transformation Beijing, 15 October 2008

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Preamble

Taking advantage of the opportunity of so many people from movements gathering in Beijing during the Asia-Europe People’s Forum, the Transnational Institute and Focus on the Global South convened informal nightly meetings between 13 and 15 October 2008. We took stock of the meaning of the unfolding global economic crisis and the opportunity it presents for us to put into the public domain some of the inspiring and feasible alternatives many of us have been working on for decades. This statement represents the collective outcome of our Beijing nights. We, the initial signatories, mean this to be a contribution towards efforts to formulate proposals around which our movements can organise as the basis for a radically different kind of political and economic order. Please sign on to this statement by adding your name in the comments section.

The Crisis

The global financial system is unravelling at great speed. This is happening in the midst of a multiplicity of crises in relation to food, climate and energy. It severely weakens the power of the US and the EU, and the global institutions they dominate, particularly the International Monetary Fund, the World Bank and the World Trade Organisation. Not only is the legitimacy of the neo-liberal paradigm in question, but the very future of capitalism itself.

Such is the chaos in the global financial system that Northern governments have resorted to measures progressive movements have advocated for years, such as nationalisation of banks. These moves are intended, however, as short-term stabilisation measures and once the storm clears, they are likely to return the banks to the private sector. We have a short window of opportunity to mobilise so that they are not.

The challenge and the opportunity

We are entering uncharted terrain with this conjuncture of profound crises – the fall out from the financial crisis will be severe. People are being thrown into a deep sense of insecurity; misery and hardship will increase for many poorer people everywhere. We should not cede this moment to fascist, right wing populist, xenophobic groups, who will surely try to take advantage of people’s fear and anger for reactionary ends.

Powerful movements against neo-liberalism have been built over many decades. This will grow as critical coverage of the crisis enlightens more people, who are already angry at public funds being diverted to pay for problems they are not responsible for creating, and already concerned about the ecological crisis and rising prices – especially of food and energy. The movements will grow further as recession starts to bite and economies start sinking into depression.

There is a new openness to alternatives. To capture people’s attention and support, they must be practical and immediately feasible. We have convincing alternatives that are already underway, and we have many other good ideas attempted in the past, but defeated. Our alternatives put the well-being of people and the planet at their centre. For this, democratic control over financial and economic institutions are required. This is the “red thread” connecting up the proposals presented below.

Proposals for debate, elaboration and action

Finance

• Introduce full-scale socialisation of banks, not just nationalisation of bad assets.
• Create people-based banking institutions and strengthen existing popular forms of lending based on mutuality and solidarity.
• Institutionalise full transparency within the financial system through the opening of the books to the public, to be facilitated by citizen and worker organisations.
• Introduce parliamentary and citizens’ oversight of the existing banking system
• Apply social ( including labour conditions) and environmental criteria to all lending, including for business purposes
• Prioritise lending, at minimum rates of interest, to meet social and environmental needs and to expand the already growing social economy
• Overhaul central banks in line with democratically determined social, environmental and expansionary (to counter the recession) objectives, and make them publicly accountable institutions.
• Safeguard migrant remittances to their families and introduce legislation to restrict charges and taxes on transfers

Taxation

• Close all tax havens
• End tax breaks for fossil fuel and nuclear energy companies
• Apply stringent progressive tax systems
• Introduce a global taxation system to prevent transfer pricing and tax evasion
• Introduce a levy on nationalised bank profits with which to establish citizen investment funds (see below)
• Impose stringent progressive carbon taxes on those with the biggest carbon footprints
• Adopt controls, such as Tobin taxes, on the movements of speculative capital
• Re-introduce tariffs and duties on imports of luxury goods and other goods already produced locally as a means of increasing the state’s fiscal base, as well as a means to support local production and thereby reduce carbon emissions globally

Public Spending and Investment

• Radically reduce military spending
• Redirect government spending from bailing out bankers to guaranteeing basic incomes and social security, and providing universally accessible basic social services such as housing, water, electricity, health, education, child care, and access to the internet and other public communications facilities.
• Use citizen funds (see above) to support very poor communities
• Ensure that people at risk of losing their homes due to defaults on mortgages caused by the crisis are offered renegotiated terms of payment
• Stop privatisations of public services
• Establish public enterprises under the control of parliaments, local communities and/or workers to increase employment
• Improve the performance of public enterprises through democratising management – encourage public service managers, staff, unions and consumer organisations to collaborate to this end
• Introduce participatory budgeting over public finances at all feasible levels
• Invest massively in improved energy efficiency, low carbon emitting public transport, renewable energy and environmental repair
• Control or subsidise the prices of basic commodities

International Trade and Finance

• Introduce a permanent global ban on short-selling of stock and shares
• Ban on trade in derivatives
• Ban all speculation on staple food commodities
• Cancel the debt of all developing countries – debt is mounting as the crisis causes the value of Southern currencies to fall
• Support the United Nations call to be involved in discussions about how the to resolve the crisis, which is going to have a much bigger impact on Southern economies than is currently being acknowledged
• Phase out the World Bank, International Monetary Fund, and World Trade Organisation
• Phase out the US dollar as the international reserve currency
• Establish a people’s inquiry into the mechanisms necessary for a just international monetary system.
• Ensure aid transfers do not fall as a result of the crisis
• Abolish tied aid
• Abolish neo-liberal aid conditionalities
• Phase out the paradigm of export-led development, and refocus sustainable development on production for the local and regional market
• Introduce incentives for products produced for sale closest to the local market
• Cancel all negotiations for bilateral free trade and economic partnership agreements
• Promote regional economic co-operation arrangements, such as UNASUR, the Bolivarian Alternative for the Americas (ALBA), the Trade Treaty of the Peoples and others, that encourage genuine development and an end to poverty.

Environment

• Introduce a global system of compensation for countries which do not exploit fossil fuel reserves in the global interests of limiting effects on the climate, such as Ecuador has proposed.
• Pay reparations to Southern countries for the ecological destruction wrought by the North to assist peoples of the South to deal with climate change and other environmental crises.
• Strictly implement the “precautionary principle” of the UN Declaration on the Right to Development as a condition for all developmental and environmental projects.
• End lending for projects under the Kyoto Protocol’s “Clean Development Mechanism” that are environmentally destructive, such as monoculture plantations of eucalyptus, soya and palm oil.
• Stop the development of carbon trading and other environmentally counter-productive techno-fixes, such as carbon capture and sequestration, agrofuels, nuclear power and ‘clean coal’ technology.
• Adopt strategies to radically reduce consumption in the rich countries, while promoting sustainable development in poorer countries
• Introduce democratic management of all international funding mechanisms for climate change mitigation, with strong participation from Southern countries and civil society.

Agriculture and Industry

• Phase out the pernicious paradigm of industry-led development, where the rural sector is squeezed to provide the resources necessary to support industrialisation and urbanisation
• Promote agricultural strategies aimed at achieving food security, food sovereignty and sustainable farming.
• Promote land reforms and other measures which support small holder agriculture and sustain peasant and indigenous communities
• Stop the spread of socially and environmentally destructive mono-cultural enterprises.
• Stop labour law reforms aimed at extending hours of work and making it easier for employers to fire or retrench workers
• Secure jobs through outlawing precarious low paid work
• Guarantee equal pay for equal work for women – as a basic principle and to help counter the coming recession by increasing workers’ capacity to consume.
• Protect the rights of migrant workers in the event of job losses, ensuring their safe return to and reintegration into their home countries. For those who cannot return, there should be no forced return, their security should be guaranteed, and they should be provided with employment or a basic minimum income.

Conclusion

These are all practical, common sense proposals. Some are initiatives already underway and demonstrably feasible. Their successes need to be publicised and popularised so as to inspire reproduction. Others are unlikely to be implemented on their objective merits alone. Political will is required. By implication, therefore, every proposal is a call to action.

We have written what we see as a living document to be developed and enriched by us all. Please sign on to this statement at the bottom of the page.

A future occasion to come together to work on the actions needed to make these ideas and others a reality will be the World Social Forum in Belem, Brazil at the end of January 2009.

We have the experience and the ideas – let’s meet the challenge of the present ruling disorder and keep the momentum towards an alternative rolling!!

The declaration of researchers issued at the international conference in Caracas, Venezuela 16 October 2008.

Academics and researchers from Argentina, Australia, Belgium, Canada, Chile, China, Cuba, Ecuador, France, Mexico, Peru, Phillipines, South Korea, Spain, United Kingdom, United States, Uruguay and Venezuela participated in The International Political Economy Conference: Responses from the South to the Global Economic Crisis, held in Caracas from October 8 to 11, 2008.  The conference stimulated a wide ranging debate on the current economic and financial health of the global economy, the new perspectives and the challenges to the governments and peoples of the South posed by the international financial crisis.

The meeting concluded that the situation has worsened in the last few weeks. It has progressed rapidly from being a series of crises in the financial markets of countries in the centre and has turned into an extremely serious international crisis. This meant that countries in the South are in a very difficult situation.

The crisis threatens the real economy and, if energetic and effective actions are not taken immediately, all peoples in the world could be drastically punished; especially the least protected and most neglected sectors.

The vulnerability of our currencies, the financial imbalances and the serious recession that looms large give the lie to the neo-liberal myth about the benefits of deregulating markets and the solidity and trustworthiness of the existing financial institutions; the former also clearly bring into question the foundations of the current capitalist system.

The contributions made to the conference shone the spotlight on the way the crisis, which began in August 2007, has developed and on the failure of the ever larger concessions, bailouts and privileges provided by state intervention in developed capitalist countries to save the dregs of an already non-functional world financial system.

We denounce the attempt to make the overall world system carry the cost of the financial bailout thus aggravating the situation of poverty, unemployment and exploitation experienced by the world's workers and peoples.

Neither the colossal state interventionism seen over the last few weeks to rescue institutions dismembered and drained dry by speculation, nor massive public indebtedness are plausible ways to get out of the crisis. The existing dynamic encourages new rounds of capital concentration and, if the peoples do not firmly oppose this, it is becoming perilously likely that restructuring will occur simply to save privileged sectors.  This could mean there is a danger of capitalism returning to an authoritarian way of functioning, since in the North an increase in discrimination and racism towards immigrants from countries in the South has already been noted –which is something extremely regressive.

If the current restructuring the capitalist system continues down the same road, there will be enormous productive and social costs and the already fragile sustainablity of the environment may suffer even more damage.

The need to reform the international economic and financial structure is today unavoidable.  Those who think this also believe that it is necessary to find a post-capitalist solution; in Venezuela this is referred to as Twenty First Century Socialism.

In a moment as critical as this, national and regional policies must give priority to social spending and to protecting natural and productive resources. States must introduce urgent financial regulation measures to protect savings, to keep stimulating production and must fight off the dangers implicit in a lack of regulation by immediately implementing exchange and capital movement controls.

It will therefore be essential to develop the highest possible degree of balanced regional complementation and trade integration by reinforcing industrial, agricultural, energy and infrastructural capacities. Initiatives such as ALBA and the Bank of the South must extend their radius of action and move their perspective towards that of a alternative form of greater integration which includes a new common currency. This is so we can move towards creating a new word financial architecture which will make it viable for the south to be involved in a different way in the international division of labour.

In this context it is necessary to evaluate a series of contributions and proposals from the social economy which seek to dignify labour and encourage local coordination to combat the impact of the crisis.

On an international level, we must not cease to demand a far-reaching reform of the international monetary and financial system; this entails defending savings and channelling investments into serving the Peoples' essential needs.  The continued re-emergence of a system which favours the central role of speculation, increases economic differences and especially punishes those countries and sectors which are least protected must be prevented.

Therefore new (multilateral) economic institutions must be created on new bases; they must have the authority and the instruments to be able to act against the anarchy of speculation. Hence it has become indispensable that national authorities intervene urgently in ways that challenge the basic workings of the market and protect the finances of the peoples affected. The crisis has created common interests among the peoples of all nations.

Based on these analyses and considerations, The International Political Economy Conference: Responses from the South to the Global Economic Crisis has reached the following

CONCLUSIONS AND RECOMMENDATIONS FOR ACTION

We begin with the following characterisation of the international economic situation;

1.   We find ourselves in an unprecedented international situation. The economic and financial crisis has worsened and accelerated greatly in the last few days. Its future development, as well as being difficult to foresee could take on, from one day to the next, dramatic overtones.

2.   The initial epicentre of the crisis was in the United States and on the stock markets but the crisis is now a world crisis which is affecting the whole financial system and is increasingly contaminating the productive apparatus. The crisis is having a particular impact now on Eastern and Western Europe.

3.   In spite of the initial expectations that Latin America could remain outside the crisis and that it is "shielded", there are already very convincing signs that the sub continent is certain to be affected. We can not only expect a prolonged decrease in foreign trade but are certain to be hit by a very violent financial crash –and soon. The more internationalised the banking system and stock exchange the greater its fragility.

We are making these suggestions well aware that in any crisis there are always winners and losers.  We are strongly in favour of taking those measures which ensure the welfare and rights of our peoples, of citizens in general and not in favour of coming to the aid of the bankers responsible for the crisis as they are doing in Europe and the United States.

Given this new situation and the fact that it is worsening at an accelerated rate we think it is necessary to make the following recommendations for action, some of which will have to be implemented by taking urgent political decisions at the very highest levels.

Therefore, consideration should be given to calling an immediate Extraordinary Summit of Latin American and Caribbean presidents or at least of those of UNASUR. Either or both of these would be presided over by a large popular mobilisation of our peoples.

ON THE BANKING SYSTEM

THE NEW FINANCIAL ARCHITECTURE

Making good use of the bigger surplus reserves of each country brought about by the creation of a payment settlement system (regional credit transfer rights) and by the existence of the Common Fund of the South, resources can be mobilised to get the Bank of the South up and running straightaway ensuring that it will function democratically and not reproduce the logic of the multilateral financial credit organisations. This bank must be the heart of this process of transforming the already existing network of Latin American bancos de fomento whose mission is the reproduction of productive apparati based on fundamental human rights. We understand all of the foregoing in way something similar to what was emphasised in the Quito Ministerial Declaration of 3 May of this year where it said "The peoples gave their governments the mandate to provide the region with new tools for integration for development. These should be designed on transparent, participatory bases and accountable to those who issued the mandate"

Latin America and the Caribbean should learn from what is happening in Europe where each country is trying to solve the crisis on its own. This makes it imperative to bolster the mechanisms of integration being developed in the region.

SOCIAL EMERGENCY

FINANCIAL ORGANISATIONS