The crisis is inevitable

By Joaquin Oramas, Granma, 13 February 1999

This article and the brief speech by President Castro that follows are associated with the International Conference of Economists on Globalization and Problems of Development, in Havana, January 1999.

Economists highlight concern over the effects of globalization and this phenomenon's liberal line.

ALTHOUGH executives from the major banks and important international financial institutions did not attend the recent International Encounter of Economists on globalization and the problems of development, held in Havana, their absence didn't preclude the expression of fundamental ideas on the complex situation of the contemporary world, coming from many significant currents of economic thinking.

One of the lessons of this event, highlighted by various experts, is that globalization is not a late-20th century myth, but a process originating from within capitalism itself, and which has acquired a greater dimension as a consequence of the neoliberal current of the 1980's, a trend that favored the collapse of the socialist camp and the disintegration of the Soviet Union.

The approximately one hundred speeches by specialists and personnel from institutes and other entities covered concepts related to the decline of the global economy, the economic invasion of the moral and political order, the distribution of power, the fragility of banking systems in the developing countries, financial crises and filibuster- ing in that context, and attacks on the monetary system, among other issues.

One significant point made by Ariel Français, from the United Nations Development Program (UNDP), concerned the transformations affecting the economy in the wake of the 1973 oil crisis, which unleashed commercial and financial imbalances and gave rise to the restructuring of energy systems and other productive apparatuses.

He noted that the exhaustion of the model of capital growth and accumulation that prevailed in the economy starting from the end of World War II is at the bottom of the crisis.

The shortage of natural resources, rising prices, alongside the population explosion, has coincided with unforeseen technological developments in the search for reduced costs and the squandering of raw materials. As a parallel, unemployment is increasing and, as a result of neoliberal recipes, many states are encouraging the privatization of their principal industries and productive sources. This policy is referred to as economic reform but, in real terms, states are being robbed of their sovereignty.

Without touching on this last issue, World Bank representative Andrés Solimano commented that reforms take time, given that changing economic and institutional structures is a process of decades, but his technical pronouncements during the event failed to focus on Third World debt, the transfer of capital to the United States and other powers, or on the measures which allow them to adjust to the new international economic order, or neoliberal globalization.

That led to a consensus that the crisis which is provoking that situation will expand and affect stockmarket movements, as occurred in Mexico, then in South East Asia and, more recently, in Russia.

The Havana meeting did not come close to offering recipes, but was a favorable tribunal for reflection and even censure, as exemplified by Mexican analyst Alfredo Jalife, who presented a paper on financial filibustering, megaspeculation and case studies.

Naturally, economists participating in the meeting were aware of the activities of powerful speculator George Soros (who did not attend the event, although invited). Nonetheless, his modus operandi was a revelation, as,according to Jalife, Soros utilized crooked electronic betting to initiate the attack on the baht, Thailand's national currency, which unleashed the Asian crisis, in a domino effect. Soros was also accused by the president of Malaysia of having withdrawn hundreds of millions of dollars from Malaysian banks in a few hours, thus extending the crisis to that country.

The Mexican analyst recalled that, with his “letter to the editor” of The Financial Times,Soros provoked the collapse of the Russian ruble, basing his bets on “quantum theories and the precepts of the theory of chaos,” applied in an atmosphere of psychological panic to maximize the profits of megaspeculators who, he affirmed, operate methodically from their “off-shore” fiscal paradise redoubts in the Cayman Islands and other locations.

Why are the Cayman Islands, lacking in large natural resources or a high degree of industrial development, currently the fifth most important financial on the planet, according to The Financial Times? There was no response to that question in the meeting, even though there was a consensus that this is one example of neoliberal globalization, which is generating megaspeculators with sufficient economic power to fall like an avalanche on the international economy.

They are the present-day Jacques de Sores or Francis Drake, who, instead of the Turks Islands (their haunt of a few centuries ago), have taken over other islets further south in the Caribbean Sea.

The megabanks and their emulous speculators certainly constitute points of analysis in the current financial world. This makes them a necessary theme in the second encounter of economists on globalization and development, convened for the year 2000, in Havana.

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Neoliberal globalization will only last a few decades: Sooner or later, it will have to come to an end

Closing speech given by Fidel Castro Ruz, President of the Councils of State and Ministers and First Secretary of the Central Committee of the Communist Party of Cuba, at the International Conference of Economists, in the International Conference Center, on January 22, 1999, year of the 40th anniversary of triumph of the revolution. (Translation of the typescript of the Council of State)

Distinguished delegates, observers and invited guests:

Since you are doing me this honor, I am not going to make a speech; I will restrict myself to expounding a paper. (APPLAUSE)

I shall do it in the language of dispatches and, to a large extent, it will be a dialogue with myself.

July. Meeting of Latin American and Caribbean Economists. Theme: a grave world economic crisis in sight. Need to convene an international meeting. Central point: the economic crisis and neoliberal globalization.

Extensive debate. All schools. Confronting arguments. Labors were in that direction. Maximum possible reduction of costs for everyone. Working morning, noon and night. Exceptional seriousness and discipline have reigned in these five days. Everyone talking with absolute freedom. We have achieved that. We are gratified. We have learnt a lot listening to you.

A great variety and diversity of ideas. Extraordinary exhibition of spirit of study, skill, clarity and beauty of expression. We all have convictions. We can all influence each other. In the end, we will all come to similar conclusions.

My profoundest convictions: the incredible and hitherto unknown globalization that concerns us is a product of historical development; a fruit of human civilization; it was attained in an exceedingly short space of only 3000 years in the long life of our antecedents on the planet. They were already a completely evolved species. Contemporary humans are not more intelligent than Pericles, Plato or Aristotle, although we do not yet know if they are sufficiently intelligent to solve the extremely complex problems of today. We are betting that they can achieve it. Our meeting has been about that.

One question: Is it an irreversible process? My answer, the one I give myself, is: No!.

What type of globalization do we have today? A neoliberal globaliz- ation; that is what many of us are calling it. Is it sustainable? No. Can it survive for much time? Absolutely not. A matter of centuries? Categorically not. Will it only last a few decades? Yes, only decades. But sooner or later it will have to come to an end.

Maybe you think I’m a kind of prophet or fortune-teller? No. Do I know much about economy? No. Virtually absolutely nothing. To affirm what I said it's enough to know how to add, subtract, multiply and divide. Children learn that in elementary school.

How is the transition going to come about? We don’t know. Through widespread violent revolutions or great wars? That would seem improb- able, irrational and suicidal. Through profound and catastrophic crises? Unfortunately that seems the most likely, almost, almost inevitable outcome, and it will come about in many diverse ways and through many forms of struggle.

What kind of globalization will it be? It couldn’t be any other than jointly shared, socialist, communist, or whatever you want to call it.

Does nature and, with it, the human species, have much time to survive the absence of such a change? Very little. Who will be the creators of that new world? The men and women who people our planet.

What will be the essential weapons? Ideas; minds. Who will sow them, cultivate them and make them invincible? You.

Is this about a utopia, one more dream among so many others? No, because it is objectively inevitable and there is no alternative. It was already dreamed not so long ago, only perhaps prematurely. As José Martì, the most enlightened of the sons of this island, said: “The dreams of today will be the realities of tomorrow.”

I have concluded my paper. Now I am at your disposition, if you'd like to ask questions. (OVATION)