BEYOND THE MONTERREY CONSENSUS
The preparations for the World Summit on Sustainable Development
so far fail to inspire
By Hazel Henderson, author of numerous publications, including
the book Beyond Globalization
Monterrey, Mexico's center of high-tech, home of the famed Instituto
Technologia hosted over 50 heads of state at the UN Conference on
Financing for Development. High hopes of many NGOs were disappointed
as their participation in the year-long preparatory meetings turned
into the toothless rhetoric of the final "Monterrey Consensus."
US obstructionism had gutted the document, led by UN Ambassador
John Negroponte (formerly US Ambassador to Honduras) hewing to the
"unilateralist overdrive" and free market dogma resented in Europe,
Central and Latin America and worldwide.
Many sensible reforms to the global financial architecture promoted
since the 1997 Asian crises by enlightened central bankers and finance
ministers, as well as NGOs, had disappeared. These included reforming
and democratizing the World Bank, the IMF; the Jubilee proposals
for debt cancellation; allowing countries to seek bankruptcy protection
under rules similar to Chapter 9 of US Municipal bankruptcy laws
(which allows continuation of all public services and social welfare).
Measures to tame today's $1.5 trillion daily "global casino" of
currency trading via currency transaction taxes (e.g., the "Tobin"
tax) were banished to the NGO forums around town. These proposals
gained official recognition by legislative bodies in over 100 countries
since Geneva 2000, the 5-year review of the UN Summit on Social
Development in Copenhagen 1995.
Even the viable, ingenious proposal offered by financier George
Soros to earmark $10 billion of the IMF's new issue of Special Drawing
Rights (SDRs) for several trust funds for the provision of such
global public goods as health and education were pooh-poohed by
Alan Larson of the US delegation. President George W. Bush proposed
increasing $5 billion in US international aid over the next 3 budget
years, adding "We fight poverty because hope is an answer to terror.
. . . because faith requires it and conscience demands it." Many
dismissed this as a drop in the bucket, along with Larson's assertions
that US assistance was through its market (i.e., the role of private
investment, US imports of $450 billion from developing countries,
remittances and private philanthropy).
The clash of development paradigms was clearly evident. The European
Union's Poul Nielson noted that the total level of aid from its
15 member states was $25 billion compared with $9.6 billion from
the USA. President Hugo Chavez Frias of Venezuela, representing
the G-77 and China, stressed that the type of development should
be defined, and the the development model of the North very often
caused the underdevelopment of the South. Chavez added that the
South had paid $800 billion to the North in interest plus capital
of another $800 billion. "Yet, the debt - like a strange monster
- grew and grew." Joy Kennedy of the World Council of Churches Ecumenical
Team said, "That a free market system would effectively address
society's woes was pure science fiction."
The new views of development, articulated at the World Social Forum
in Porto Alegre were well represented in Monterrey. But as is often
the case at UN summits they were relegated to the dozens of forums,
college auditoriums and the Global Forum hosted by Mexico's NGOs.
Their theme "Another World is Possible" is becoming ever more mainstream
- in spite of the officials still guarding the old order and the
"suits" running the global Enron economy. Malaysia has demonstrated
that capital controls are workable in dealing with "hot money".
Other countries also cited the need to reform the global financial
architecture.
The Monterrey delegates were trapped in the realpolitk of the post-cold
war, with the USA the world's single superpower - even as alliances
have shifted. Since 9/11 and Bush's reactivation of Ronald Reagan's
earlier war on terrorism, Star Wars and military buildups (with
many of the same cabinet members), US unilateralism dominates international
affairs. With a domestic US population disenfranchised by money
politics and public opinion manipulated by jingoistic commercial
media and polls, the world looks for countervailing forces. The
EU and China have the necessary clout to challenge the US economically.
Latin America still is too divided. Russia is busy cozying up to
the US. India, another potential powerhouse is preoccupied with
the US' new ally, Pakistan.
The hopes of the developing world for breakthroughs at Monterrey
foundered on these realities. Yet, the USA cannot long remain the
global hegemon. Many delegates stressed that the new realities of
globalization require cooperation between states since all are now
linked economically - whether or not they benefit or are hurt by
globalization. Vulnerabilities of the US go beyond terrorism. They
include reliance on fossil fuels by a still energy-wasteful, obsolete
industrial structure - kept in place by overgrown sectors controlling
Washington: oil, coal, nuclear power, military contractors, automobiles,
steel, chemicals, agribusiness, and their lobbyists, accountants
and lawyers.
As in Japan, these special interests prevent an orderly restructuring
of the US economy toward energy-efficiency, and the emergence of
a cleaner, greener more equitable society. These goals, along with
halving poverty by 2015 were widely-shared in Monterrey, and are
desired by millions of US citizens and many millions more worldwide
- as global polls show. Paradoxically, the fundamentals of the US
economy are less sound than those of the EU, with unprecedented
levels of corporate and consumer debt, unsustainable trade deficits
and financial markets kept afloat as the world's flight capital
haven. The US dollar cannot continue to serve as the world's de
facto reserve currency - as many economists agree. The dollar is
widely expected to fall - since its current level is unsustainable
and hurts US exports as much as those countries that compete to
buy up dollars for their currency reserves - thus pushing its price
up further. The world economy is still in recession.
These realities were only discussed frankly in Monterrey by NGOs.
If developing countries want to help themselves, they can begin
by diversifying their currency reserves from dollars into euros
- for more balanced portfolios, as two powerful countries, China
and Venezuela, now leading the G-77 have already done. EU companies
accounted for nearly 70% of world investment in developing countries
by 2000. As the euro and the dollar move closer to parity, the G-8
could peg them together in a trading band. Such a balanced, dual
currency reserve system, together with the IMF's new issue of SDRs
could create a new, more stable system for the global economy.
Other self-help moves by developing countries could follow some
OPEC members that successfully barter their oil for commodities
going begging in world markets. These win-win counter-trades save
precious hard currencies in developing countries, while clearing
underpriced commodity inventories. To further a euro-dollar parity
currency regime, OPEC members could switch to more euro currency
reserves and decide to denominate their oil in euros. The "Washington
Consensus" recipe for GNP growth was still in evidence in Monterrey
- but the new recipe of sustainable human development is going mainstream.
ends.
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