Competition at the root of the present turmoil

Unctad has long been a leading herald in promoting reforms and ajustments to compensate the most nefarious effects of globalization. Yet, with the present food, economic, social, political, environmental and even nuclear crises, we have reached a stage where our societies and our civilisation are in great danger of major setback and destabilization.

Every day that passes displays the striking evidence that the current economic order of the Washington Consensus, based on competition between nations, extended programs of privatizations of public assets and extreme commercialization of all human activities including health and education, is a failure. The world is even more vulnerable to further systemic crashes and the MDGs will not be met. It is urgent to define a new and holistic globalization process for a long-term, sustainable and equitable socio-economic development wherein human welfare for all is the core value.

In the aftermath of the financial crisis of 2008, Governments have been compelled to dedicate trillions of dollars to save financial and banking institutions. As a result, national public debts become unsustainable even in the developed world. Governments consequently cut social expenses, opening the door to inevitable social frustration and unrests, when an oligarchic minority of rich and powerful refuse, at all costs, to renounce their privileges. The prices of basic commodities such as crops, oil and gold rise under the impact of speculation. Extremely volatile stock markets threaten to blow up at any time. Merciless speculative capital flows remain free to rove about the world and beat down on any asset-prey, whereas populations are bound to make do with the devastating effects of repeated crises that they have not triggered. Exacerbated tensions between currencies bind governements to keep huge reserves which could otherwise be dedicated to the benefits of their people. Meanwhile, military expenses rose to over USD 1.500 billions in 2009. The world appears more divided than ever despite relentless efforts by the UN to keep it afloat.

There can therefore be no real long term improvement of the world situation until we take the firm decision to put an end to competition between nations and to shift to a global cooperation, share the world resources equitably and stop identifying economy with a wargame in which the strongest nations impose their will for the sake of their nationalistic interests.

A new global framework of multilateral cooperation

It is obvious to all that the planetary resources will not be sufficient to support an extension of the present economic development based on frantic exploitation and consumption of raw materials, energy and manufactured goods. Balance must be restored in nature and human societies. The only possible way forward is to design a new global framework of cooperation between nations. The negotiation of a new Economic Consensus for Peace must be put as a top priority on the agenda of political leaders and international institutions.

Economic Justice and Human Rights at the heart of the new order

A new framework for international economic relations should be based on some priorities and key assumptions :

  • Give priority to the satisfaction of basic human needs so as to eradicate hunger and the dire poverty in which half the world population lives, regardless of people’s purchase power to buy food, clothes, shelter, heath and education services.
  • Reduce the franctic materialistic consumption in the developed places of the world in order to stop the depletion of the natural resources.
  • Empower people and communities, enforce the Human Rights, as defined in the Universal Declaration of 1948 effectively and in totality.
  • Create a balance between nations for an equitable access to the world resources. The Western world and a few newly developped nations monopolize between 65% and 80% of all resources whereas the rest of the world has to make do with the remaining 20% or so.

Ensure a long term monitoring of the planetary resources to fight climate change, restore the environment and leave a sound planet to future generations.

Global Commons versus marketable commodities

The irrational behaviour of stock markets and their longing for maximized profits are not compatible with the necessity to make the essentials available to billions of destitute people who have no significant purchase power. Therefore, a clear distinction must be established between :

  • Global Comons : basic commodities, such as crops, rice, clean air, clean and drinkable water, minerals, oil which are essential to sustaining life, justice and peace, and must be withdrawn from the predatory hold of volatile markets.
  • Marketable commodities and goods which can be traded through the medium of current free trade.

A new UN agency could be created in order to supervise the monitoring of the world Global Commons to be shared equitably between nations. Their respective values and convertibility rates would be defined commonly by the 192 stakeholders member states of the UN altogether, not by the private financial places of the world.

The remaining goods and commodities would fall under improved trade rules with provision of reinforced rules for the compliance with a sustainable economic development, including energy saving and preservation of natural resources.

Food emergency relief program and permanent reserves

Almost 3 billion people live with less than 2 dollars a day in extreme poverty and are subject to chronical malnutitrition whereas, millions still starve to death, while huge stocks of food get spoiled in the warehouses of the world because that maintains market prices of commodities. Estimates from the FAO also show that 1.3 billion tons of food are wasted every year because of lack of infrastructures in the developing world and wrong consumption behaviour in the industrial nations.

All stocks of basic food commodities (rice, grains….) should be put in a common pool and redistributed to populations in need through a public mechanism. It is urgent to set up :

  • A complete emergency relief program, in order to feed the poor and destitute worldwide. Meanwhile, nations should negotiate a mechanism to establish permanent security inventories of food, into which nations in need may tap, at least until each nation be self sufficient.
  • A world plan to raise agricultural production capacities in deficient countries. A huge endeavour of cooperation is necessary to set up mechanisms to transfer know how and resources, revamp local agricultural industries and indigenous traditional know how, promote green technologies and organic agriculture, empower local communities and decommission the prevailing mercantile patent system which grant undue power to multinational private corporations.

A new global reserve and trade currency

A supranational world currency to serve as a reserve account unit and trade currency should replace the present system, fuelled with speculation, of floating currencies, and dominated in effect by very few strong currencies. It is crucial to establish a stable and harmonious international monetary system, free from the grip of the market forces. In particular, that new currency will include, or be :

  • The inclusive integration of all currencies. As a starting point it could be necessary to weigh each currency with respect to the GDP of each nation, to weigh every currency in comparison to the total fiat money.
  • The pivoting currency for the convertibility all world currencies with a limited spectrum of variation allowed for each of them.
  • A mechanism that would enable the periodical adjustment of the value of this world currency based on some kind of weighted indexing value : a basket of other non monetary commodities such as gold, basic raw materials, chosen among the Global commons as defined above. This would be instrumental in preventing erosion of this world currency, would any particular national currency be subject to devaluation
  • An instrument that helps to control monetary expansion and to prevent bubbles, boosts an bursts cycles which are so disruptive to the world economy.
  • An extension to the SDRs facility to enable developing countries to have access to low interes rates loans for their investment programs in agriculture, industry, education and health, without ‘conditionalities’ as they exist today.

A Global Central Bank, acting under the mandate and supervision of the UN General Assembly could be created in order to issue this global world currency

Debt cancellation

A total and unconditional cancellation of national debts of the developing nations is an absolute must. The present debt situation is not sustainable. The international community should create the appropriate mechanisms and compensation organisms to restructure the debts. This has been achieved at national levels to recycle huge amount of bad debts and junk assets from banks and other private financial institutions in the aftermath of the 2008 financial crisis. There is no insuperable obstacle to the creation of a similar mechanism for the public debt of the third world nations.

Global Marshall Plan

A Global Marshall Plan will provide the global frame for an ambitious holistic development strategy. Strong public lead, international direction given by the United Nations, mobilization of the private sector to bring their multiple expertise can be associated to serve the common interest.

Instead of pursuing politics that maintain developing and less developed nations tied up to low value added commodities, low skill manufactures, altogether with poor social and educational achievements, a Global Marshall Plan will devise an effective program to promote rural life and employment, to develop industrial productive capacities, and a scheme for full employment in compliance with a sustainable and environmental friendly development.

A huge transfer of money, technology, and other resources from the developed countries is needed. A country-by-country based contractual partnership can be an approach in which international institutional endeavour equals and reflects into national commitments.

The use of ossil fuel and fission nuclear energies must be come to and end. The UN should simultaneously initiate an international program to associate scientists and academic researchers to develop nuclear cold fusion, that can be obtained from an isotope of water, in order to have this safe energy made available to all nations as quickly as possible, and replace fossil fuel and fission nuclear energies.

In this global scheme, it is obvious that the UN system will play a central role and therefore it is an evidence that its budget, which remains desperately low, has to be increased significantly. The present crisis pervading the world is critical. There is no other viable alternative than a complete transformation of the world economic, monetary and financial system, to bring about economic justice and stability, harmony and peace. There is a daunting task ahead. Unctad should lead the way to promote that new world economic consensus.