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Tuesday, December 1, 2020
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SANTIAGO, May 19 2009 (IPS) - Though the world economic outlook continues to look grim, it is worth asking what the world will be like when we exit this crisis. We have to identify the forces that are affecting the course of events so that we can change the existing order and avoid these problems in the future.
The crisis began in a particular segment of the American economy and spread with staggering velocity, driven by the contraction of credit. International trade was severely effected, and according to the International Monetary Fund and the World Trade Organisation, will drop by between 2-9 percent this year. If this forecast turns out to be correct, it will be the worst decline in trade since World War Two.
Predicting what comes next is not easy. It is unlikely that the demand for commodities will rebound in the short term. However, it is not certain that prices, especially of food, will continue to fall. The roots of the insecurity are the same that fed the recent speculation-driven price increase -in other words, the distortion caused by the influence of unregulated financial operations on commodity prices, whether up or down.
Recently the president of the Chinese Central Bank, Zhou Xiauchuan, defended the creation of a new benchmark currency -like the universal monetary unit suggested by John Maynard Keynes in 1944. What Xiauchuan and Keynes share is the sense that a currency cannot be national and international at the same time because it would risk subjecting the world to the vagaries and conditions of the issuing country.
Those most seriously affected by the current economic crisis are the poorest populations, which are the most vulnerable to a recession with price inflation and exacerbated by the monetary imbalances of the American economic system.
To avoid a repetition of this silent tsunami, the established economic order will have to be changed.
A new political geography is emerging from the crisis and it is important to listen to voices of the world that were once considered peripheral. The incorporation of nations like South Africa, Argentina, Brazil, China, India, and Mexico into the new system of global governance, with both a voice and a role in decision-making, could have been accomplished at the G20 summit held last April in London. While this is not all that is needed, it is an indispensable step towards bringing about a true multipolar order.
A new order should result from an organisation of democratic states that protect and broaden the range of civil victories that characterised the 20th century. Among these, the promotion and consolidation of democracy, the strengthening of social protections, and the fight against inequality and hunger.
The regression in the latter three areas that has taken place in recent years is largely the result of the exhaustion of institutions, national regulation, and social safety nets. We have seen a deliberate dismantling that was carried out largely from outside, driven by the unilateral supremacy of unregulated financial markets.
The inadequacy of the systems of governance that resulted from this process became inescapably apparent in this crisis. The disaster has still not generated a consensus about how to fix it. It is not enough to simply treat the symptoms of the disease; the causes must be found.
If we wish to create a sustainable economic order for the 21st century, we will have to go beyond that which existed in the past. Because of this, we will have to base our actions on those tenets that have the broadest and clearest support and legitimacy in the eyes of society: human rights and the commitment to tear down the walls that prevent the equal access of all people. All of this must be definitively incorporated into a development agenda and multipolar institutions -particularly the right to adequate food, a fundamental part of the right to life enshrined in the 1948 Universal Declaration of Human Rights.
It is because threats to this right are once again emerging that the UN Food and Agricultural Organisation is calling for a new World Food Summit for 2009.
The importance of this right goes beyond economics to biology itself. Even if overcoming the current impasses leads to a delay of the process of global reconstruction, we still have to generate a consensus on a matter of urgency that simply cannot wait: eradicating hunger is the passport necessary to enter the new world order that will be the foundation of the new century. (END/COPYRIGHT IPS)
(*) Jose Graziano da Silva is Regional Representative of the UN Food and Agricultural Organisation for Latin America and the Caribbean.
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