The Sleeping Giant

Paraguay is the wonder of the world. This was the opinion of the International Monetary Fund (IMF) published in Patria and other Paraguayan newspapers on Sept. 11, 1959.

The IMF supported Gen. Alfredo Stroessner’s economic program, just as it supported those of generals Pinochet, Videla, Castelo Branco and several others of the same caliber afterward.

Some years later, Argentina, no longer dealing with military leaders but a civilian government, followed the IMF, World Bank and international banks’ line with catastrophic results.

The economist Joseph Stiglitz wrote a very interesting book about the consequences of following the IMF’s rules: “Globalization and Its Discontents.”

In summary, Stiglitz says the current globalized world, ruled by the principles of deregulation, privatization and free trade, and with the IMF’s leading role, needs to change. Together with the IMF, I’d add its fraternal twin, the World Bank.

I do not think the situation has changed, and that is the reason the financial crisis of 2008 took place, which also did nothing to cause change. However, some analysts see a possibility of change with the creation of the Asian Infrastructure Investment Bank, an international organization that may be an alternative to the IMF and World Bank.

The story started (or emerged) at the beginning of last February, when representatives of China, India and Russia declared themselves parties to the creation of a fairer, international economic order.

At the beginning of March, the United Kingdom decided to join the Asian Infrastructure Investment Bank, and then so did France, Italy, Germany, Korea, Australia and other countries.

China is the leader, but it is not a Chinese bank. Rather it is an attempt to create a multipolar world.

China’s leadership is explained by the fact that it is the main trading partner for 123 countries, while the U.S. is the main trading partner for 64.

China has reserves worth approximately $4 billion and wants to invest them in something more interesting than U.S. Treasury bonds. It also wants its currency to be accepted as an international currency and had proposed that money exchanges between the countries making up the new association take place in other local currencies.

“Let China keep sleeping, because when it wakes, the world will tremble.” The quote from Napoleon Bonaparte resounds with the advent of the creation of the new Asian bank.

I don’t share this opinion. China has no military base outside of its territory and knows that it cannot confront the U.S. militarily, the U.S. being superior in this respect.

The real danger does not consist of a conflict between the largest powers on the planet, nor in the world being conquered by the People’s Republic, but rather in the ideology of economic growth at any cost, even provoking climate change that will affect everyone.

China, which has been on this path for a long time, now seems ready to leave it behind; if it does so in concert with other powers, it will be better for everyone.