What Reforms Are Needed in the Global Economy?

The G20 summit that took place in Washington aimed “to restore global growth and achieve needed reforms in the world’s financial systems,” without discussing the type of economic growth and its distribution. Is there a difference between an increase in the automotive industry for individual use and an expansion of collective means of transportation? Does it matter if growth comes with depredation of natural resources or if we go about it while preserving the environment, the sovereignty of food or energy? Is it worth it to account for military production or speculative activity in reference to an increase in the economy? The discussion over the new financial architecture appears more attractive even though it elicits some questions. Who should be at the forefront of this debate? Those responsible for the current order? Let’s remember that Paulson left Goldman Sachs in 2006 for the seat of the secretary of the treasury of the United State of America. His first action was to dedicate 700 billion dollars “to buy toxic portfolios” and save financial entities exposed to bad loans. He then changed directions in order to move forward with temporary nationalizations, to later take up the path of liberalization.

In that sense, the summit maintained that “our work will be guided by a shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation, and entrepreneurship that are essential for economic growth, employment, and poverty reduction.” After decades of neo-liberal hegemony and conservative restoration politics, what is needed at the least is the reiteration of the politics that led to the concentration of income and wealth along with the impoverishment of the population. The appeals are not enough to “strengthen supervision over financial institutions” or promote “reforms of the global financial system and the resulting Bretton Woods organizations,” because that emergent order at the end of World War II is the one that is in crisis: the world economy of the dollar boss of trade. The discussion is about the new world order and especially about who is qualified to obtain it. In 1944 the winners of the battle gave the debate. Who are those actors in reality? Since 2001 a demand was made for a popular global movement for another possible and necessary order.

Argentina could contribute to that challenge with economic policies that promote the distribution of income and wealth within the framework of an alternative integration to free trade supported by global and local economic power. This assumes a disconnect from the focus of the crisis and a virtuous reconnection with countries of the region to modify the equation of beneficiaries in the development of the economy. The Argentine president demonstrated in Washington the overcoming of the crisis since “other capitalism.” It is an affirmation in order to question the possibility of the thesis with trans-nationalization increasing. It is time to think boldly of overcoming neo-liberalism and capitalism following the creative search in the region, where they support proposals beyond and even against capitalism; including socialist ones.

The responses to the crisis should be searched for outside of those responsible and involve the citizens and form subjects for the sustenance of profound changes, that fight to resolve the differences, whihc delay the emergency of the Banco del Sur or other projects by profitable and cultural organizations, which opportunely has grown. We refer to regional energy businesses, communications, infrastructure (with respect to the environment and popular culture) and in diverse aspects of the economy. It is about resolving social economic problems while the social subject is constructed for its implementation. It is a logic different from the injection of public liquidity into institutions invalidated by their practices, like the FMI. More than reforming the FMI, our countries can organize responses similar to Bolivia’s moving away from the CIADI; or Ecuador with the audit of the national debt. These are convergent measures with a strict control of movement of capital. It is time to denounce the multilateral organisms and construct alternative institutionality. Something contrary to what is maintained by the G20 that argues for the culmination of the Doha round (WTO) before the end of the year, who’s objective is to lower customs tariffs for industrial goods in our countries, while the U.S. and Europe maintain substantial subsidies for the production and exportation of agricultural products. Denouncing large treaties in defense of the investments to install new norms of exchange that privilege the solving of unmet social necessities is required.

-Julio C. Gambina is a professor of Economic Politics at the National University of Rosario. President of the Foundation of Social and Political Investigations, FISYP. Member of the Steering Committee of the Latin American Social Sciences Council, CLACSO.