CUBA Castro: the Third World must take the helm
The G-77 heads of state and government meeting was held in Havana, Cuba, April 12-14. The G-77 brings together representatives of Third World countries. Below are excerpts of Cuban President FIDEL CASTRO's address to the opening session of the summit conference on April 12.
Never before has humanity had such a formidable scientific and technological potential, such an extraordinary capacity to produce riches and provide well-being. Yet never before has disparity and inequity been so profound in the world.
Technological wonders that have been shrinking the planet in terms of communications and travel co-exist with an increasingly wider gap separating wealth and poverty, development and underdevelopment.
We are all passengers on the same vessel, this planet on which we all live. Trifling minorities are travelling in luxurious cabins furnished with the internet, cell phones and access to global communication networks. They enjoy a nutritional, abundant and balanced diet as well as clean water supplies. They have access to sophisticated medical care and culture.
The overwhelming majority are travelling in conditions that resemble those of the terrible slave ships that travelled from Africa to the Americas in our colonial past — 85% of the passengers on this ship are crowded together in its dirty hold suffering hunger, disease and helplessness.
The vessel is carrying too much injustice to remain afloat and it pursues such an irrational and senseless route. This vessel seems destined to clash with an iceberg. If that happens, we will all sink with it.
The heads of state and government meeting here, who represent the overwhelming and hurting majority, have not only the right but the obligation to take the helm and correct this catastrophic route. It is our duty to ensure that all the Earth's passengers can travel in conditions of solidarity, equity and justice.
For two decades, the Third World has repeatedly listened to one simplistic discourse. Only one single policy has prevailed. We have been told that deregulated markets, maximum privatisation and the state's withdrawal from economic activity were the infallible principles conducive to economic and social development.
The developed countries, in particular the United States, the big transnational corporations benefiting from such policies and the International Monetary Fund (IMF) in the last two decades have designed a world economic order most hostile to the Third World countries' progress and one that is the least sustainable in terms of the preservation of society and the environment.
Neo-liberal globalisation means that it is not development that goes global but poverty; it is not respect for the national sovereignty of our states that goes global but its violation; it is not solidarity amongst our peoples that goes global but the unequal competition that prevails in the marketplace. Two decades of so-called neo-liberal structural adjustment have left behind economic failure and social disaster.
It is the duty of responsible politicians to face up to this predicament by taking indispensable decisions to rescue the Third World. Economic failure is evident. Under the neo-liberal policies, the world economy experienced global growth between 1975 and 1998 which hardly amounted to half of that attained between 1945 and 1975 with Keynesian market policies and active state participation in the economy.
Neo-liberalism
In Latin America, where neo-liberalism has been applied as an absolute doctrine, economic growth in the neo-liberal stage has not been higher than that attained under previous development policies.
After World War II, Latin America had no debt but today we owe almost US$1 trillion. 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. There are more poor, unemployed and hungry people in Latin America now than at any other time in its history.
Under neo-liberalism the world economy has not been growing faster in real terms; however, there is more instability, speculation, external debt and unequal exchange. Likewise, there is a greater tendency for financial crises to occur more often, while poverty, inequality and the gap between the wealthy "North" and the dispossessed "South" continues to widen.
Speculation blooms in hard currency and derivative markets and mostly speculative daily transactions amount to no less than US$3 trillion. Our countries are urged to be more transparent with information and more effective at bank supervision but financial institutions, like the hedge funds, fail to release information on their activities, are absolutely unregulated and conduct operations that exceed all the reserves kept in the banks of the countries of the Third World.
In an atmosphere of unrestrained speculation, the movements of short-term capital make the countries of the South vulnerable to any external contingency. The Third World is forced to immobilise financial resources and grow indebted to keep hard currency reserves in the hope that they can be used to resist the attack of speculators. More than 20% of the capital revenues obtained in the last few years were immobilised as reserves but they were not enough to resist such attacks, such as the recent financial crisis in south-east Asia.
Presently, US$727 billion from the world central banks' reserves are in the US. This leads to the paradox that the poor countries are offering cheap, long-term financing to the wealthiest and most powerful country in the world. Such reserves could be better invested in economic and social development in the Third World.
If Cuba has successfully carried out education, health care, culture, science, sports and other programs — despite four decades of economic blockade — and revalued its currency seven times in the last five years in relation to the US dollar, it has been thanks to its privileged position as being a non-member of the IMF.
A financial system that forcibly such enormous resources immobilised, badly needed by the countries to protect themselves from the instability caused by that very system, should be removed. The IMF is the emblematic organisation of the existing monetary system. The US enjoys veto power over its decisions.
Remove the IMF
As far as the latest financial crisis is concerned, the IMF has showed a lack of foresight and handled it clumsily. It has imposed its conditions that have paralysed governments' social development policies, thus creating serious domestic hazards and preventing access to necessary resources when they are most needed.
It is high time for the Third World to strongly demand the removal of an institution that neither provides stability to the world economy nor works to deliver funds to debtors to avoid liquidity crises; it rather protects and rescues the creditors.
How is it rational and ethical to have an international monetary order which allows a few technocrats in Washington, whose positions depend on US support, to design identical economic adjustment programs for implementation in a wide variety of countries, to cope with specific Third World problems?
Who takes responsibility when the adjustment programs bring social chaos, paralysing and destabilising countries with large human and natural resources, as was the case in Indonesia and Ecuador?
It is of crucial importance for the Third World to work for the removal of this sinister institution, and the philosophy it sustains, and replace it with an international financial regulating body that operates on a democratic basis, and in which no one country has a right of veto. An institution that would not just defend the wealthy creditors and impose interfering conditions, but would allow the regulation of financial markets to arrest unrestrained speculation.
A viable way to do this would be to establish, not a 0.1% tax on speculative financial transactions as Mr Tobin brilliantly proposed, but rather a minimum 1% tax which would permit the creation of a large indispensable fund, in excess of US$1 trillion every year, to promote real, sustainable and comprehensive development in the Third World.
The underdeveloped nations' external debt is amazing, not only because it is terribly high but also due to its outrageous mechanism of subjugation and exploitation and the absurd formula offered by the developed countries to cope with it.
Third World debt
The Third World debt exceeds US$2.5 trillion and in the present decade has increased more dangerously than in the 1970s.
I repeat what Cuba has been saying since 1985: the debt has already been paid if note is taken of the way it was contracted, the swift and arbitrary increase in interest rates on the US dollar in the previous decade and the decrease in basic commodity prices, a fundamental source of revenue for developing countries. The debt continues to feed on itself in a vicious circle where money is borrowed to pay interest.
Today, it is clearer than ever that the debt is not an economic but a political issue. It demands a political solution. It is impossible to continue overlooking the fact that the solution to this problem must come from those with the resources and power — the wealthy countries.
The so-called Heavily Indebted Poor Countries Debt Reduction Initiative has a long name but has been short on results. It can only be described as a ridiculous attempt at alleviating 8.3% of the Third World countries' total debt. Almost four years after its implementation, only four countries of the poorest 33 have reached the complicated process simply to gain negligible relief of US$2.7 billion, which is 33% of what is spent on cosmetics every year in the US.
The resources needed to solve this problem are not large compared to the wealth of the creditor countries. Every year US$800 billion are used to finance weapons and troops, even after the cold war has ended; no less than $400 billion goes into the narcotics trade; and $1 billion goes into commercial publicity — this is just three examples.
As we have said before, sincerely and realistically: the Third World countries' external debt is unpayable and uncollectible.
World trade
In the hands of the rich countries, world trade is already an instrument of domination. Under neo-liberal globalisation it will increasingly perpetuate and sharpen inequalities, as well as a being a theatre for disputes between developed countries for control over present and future markets.
Commercial liberalisation is recommended as the best and only formula for efficiency and development. Accordingly, all countries should remove protectionist instruments from their domestic markets, regardless of the differences in development between countries. After hard negotiations in the World Trade Organisation (WTO), the poorest countries have been conceded a narrow time difference before it must abide by that nefarious system.
While neo-liberalism keeps repeating its claims about the opportunities created, the underdeveloped countries' participation in world exports was lower in 1998 than in 1953.
Trade liberalisation essentially consists of the unilateral removal of protectionist instruments by the South. Meanwhile, the developed nations have failed to do the same to allow Third World exports to enter their markets.
The wealthy nations have fostered liberalisation in strategic sectors associated with advanced technology, in which they enjoy enormous advantages and deregulated markets tend to augment these.
On the other hand, trade restrictions on agriculture and textiles, two particularly significant sectors for the Third World, have not been removed because they are not of interest to developed countries.
In the Organisation for Economic Cooperation and Development, the club of the wealthiest countries, the average tariff applied to manufactured exports from underdeveloped countries is four times higher than those applied to other member countries.
Basic commodities are still the weakest link in world trade. In the case of 67 Third World countries these commodities account for no less than 50% of export revenues.
The neo-liberal wave has wiped out basic commodities agreements and other defence formulas designed to deal with unequal exchange. It is for this reason that today the purchasing power of sugar, cocoa, coffee and other commodities is 20% of what it used to be in 1960; they often do not even cover the production costs.
Compensation for colonialism
Special and differentiated treatment for poor countries is not considered an elementary act of justice by the developed countries but as a temporary act of charity. Such differential treatment would not only recognise the enormous differences in development that prevent the use of the same yardstick for the rich and poor countries, but also as compensation for the colonial past.
In Seattle, there was a revolt against neo-liberalism. Its most recent precedent was the failure of the Multilateral Agreement on Investment. This shows that the aggressive market fundamentalism, which has caused great damage to our countries, is finding strong and deserved world rejection.
In private research, the search for private profit takes precedence over necessity and private research focuses on the needs of the wealthy consumers. Intellectual property rights rules leave knowledge out of reach of underdeveloped countries. Legislation on patents does not recognise know-how transfer or the traditional property systems, which are so important in the South.
Vaccines have become the most efficient technology to keep health care expenses low, since they can prevent diseases with one dose. However, as they yield low profits, they are put aside in favour of medications that require repeated doses. New medications, the best seeds and, in general, the best technologies have become commodities that only the rich countries can afford.
Race to catastrophe
The murky social results of this neo-liberal race to catastrophe are in sight. The world economic order works for 20% of the world's population but it leaves out, demeans and degrades the remaining 80%.
In more than 100 countries, the per capita income is lower than 15 years ago. At the moment, 1.6 billion people are faring worse than at the beginning of the 1980s. More than 820 million people are undernourished; 790 million of them live in the Third World. It is estimated that 507 million people living in the South today will not live to see their 40th birthday.
In the Third World countries represented here, two out of every five children suffer from growth retardation and one in three is underweight; 30,000 who could be saved are dying every day; 2 million girls are forced into prostitution; 130 million children do not have access to elementary education; 250 million minors under 15 must work to survive.
We simply cannot accept that the Third World must enter this next century as the backward, poor and exploited rearguard, the victim of racism and xenophobia, prevented from accessing knowledge and alienated from our cultures due to the foreign consumer-oriented globalised mass media.
This is not the time for the Group of 77 to beg from the developed countries or to display submission, defeatism or internecine divisions. It is time to rescue 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. Today we have less and less bread and more injustice.
The world can be globalised under the rule of neo-liberalism but it is impossible to rule forever over 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 stacks of corpses.
Another Nuremberg is required to put the economic order imposed on us on trial, an economic system that is killing through hunger and preventable or curable disease more men, women and children every three years than all those killed during World War II.
In Cuba we say: "Homeland or Death!". At this summit of Third World countries, we have to say: "We either unite and establish close cooperation, or we die!".
Thank you, very much.