Socialist Action /May 2000
Fidel Castro Speaks: Globalization!
This is the complete text of President Castro's speech at the opening
session of the South Summit on April 12, 2000, in Havana.
 Excellencies, Distinguished delegates and guests: Never
before did mankind have such formidable scientific and technological potential-such
extraordinary capacity to produce riches and well-being-but never before
were disparity and inequity so profound in the world.
Technological wonders that have been shrinking the planet in terms of
communications and distances co-exist today with the increasingly wider
gap separating wealth and poverty, development and underdevelopment.
Globalization is an objective reality underlining the fact that we are
all passengers on the same vessel, that is, this planet where we all live.
But, passengers on this vessel are traveling in very different conditions.
Trifling minorities are traveling in luxurious cabins furnished with
Internet, cell phones, and access to global communication networks. They
enjoy a nutritional, abundant, and balanced diet as well as clean water
supplies. They have access to sophisticated medical care and to culture.
Overwhelming and hurting majorities are traveling in conditions that
resemble the terrible slave trade from Africa to America in our colonial
past. That is, 85 percent of the passengers on this ship are crowded together
in its dirty hold suffering hunger, diseases, and helplessness.
Obviously, this vessel is carrying too much injustice to remain afloat
and it pursues such an irrational and senseless route that it cannot call
on a safe port. This vessel seems destined to clash with an iceberg. If
that happened, we would all sink with it.
The heads of state and government meeting here, who represent the overwhelming
and hurting majorities, have not only the right but the obligation to take
the helm and correct that catastrophic route. It is our duty to take our
rightful place at the helm and facilitate that all passengers can travel
in conditions of solidarity, equity, and justice.
For two decades, the Third World has been repeatedly listening to only
one simplistic discourse while one single policy has prevailed. We have
been told that deregulated markets, maximum privatization, and the state's
withdrawal from economic activity were the infallible principles conducive
to economic and social development.
Along this line the developed countries-particularly the United States
of America-the big transnationals benefiting from such policies, and the
International Monetary Fund have designed in the last two decades the world
economic order most hostile to our countries' progress and the least sustainable
in terms of the preservation of society and the environment.
Neoliberalism: A worldwide disaster
Globalization has been held tight by the patterns of neoliberalism; thus,
it is not development that goes global but poverty; it is not respect for
the national sovereignty of our states but the violation of that respect;
it is not solidarity amongst our peoples but ''sauve-qui-peut'' in the unequal
competition prevailing in the marketplace.
Two decades of so-called neoliberal structural adjustment have left behind
economic failure and social disaster. It is the duty of responsible politicians
to face up to this predicament by taking the indispensable decisions conducive
to the Third World rescue from a blind alley.
Economic failure is evident. Under the neoliberal policies, the world
economy experienced a global growth between 1975 and 1998 which hardly amounted
to half of that attained between 1945 and 1975 with Keynesian market regulation
policies and the states' active participation in the economy.
In Latin America, where neoliberalism has been applied with absolute
attachment to doctrine, economic growth in the neoliberal stage has not
been higher than that attained under the previous state development policies.
After World War II, Latin America had no debt but today we owe almost one
trillion dollars. This is the highest per capita debt in the world.
Also the income difference between the rich and the poor in the region
is the greatest worldwide. There are more poor, unemployed, and hungry people
in Latin America now than at any other hard time in its history.
Under neoliberalism the world economy has not been growing faster in
real terms; however, there is more instability, speculation, external debt,
and unequal exchange. Likewise, there is a greater tendency to financial
crises occurring more often while poverty, inequality, and the gap between
the wealthy North and the dispossessed South continues to widen.
Crises, instability, turmoil, and uncertainty have been the most common
words used in the last two years to describe the world economic order.
The deregulation that comes with neoliberalism and the liberalization
of the capital account have a deep negative impact on a world economy where
speculation blooms in hard currency and derivative markets and mostly speculative
daily transactions amount to no less than 3 trillion U.S. dollars.
Our countries are urged to be more transparent with their information
and more effective with bank supervision but financial institutions like
the hedge funds fail to release information on their activities, are absolutely
unregulated, and conduct operations that exceed all the reserves kept in
the banks of the South countries.
In an atmosphere of unrestrained speculation, the movements of short-term
capital make the South countries vulnerable to any external contingency.
IMF and the Central Banks
The Third World is forced to immobilize financial resources and grow
indebted to keep hard currency reserves in the hope that they can be used
to resist the attack of speculators. Over 20 percent of the capital revenues
obtained in the last few years were immobilized as reserves but they were
not enough to resist such attacks-as proven by the recent financial crisis
in Southeast Asia.
Presently, 727 billion U.S. dollars from the world Central Banks' reserves
are in the United States. This leads to the paradox that with their reserves
the poor countries are offering cheap long-term financing to the wealthiest
and most powerful country in the world while such reserves could be better
invested in economic and social development.
If Cuba has successfully carried out education, health care, culture,
science, sports and other programs, which nobody in the world would question,
despite four decades of economic blockade, and revalued its currency seven
times in the last five years in relation to the U.S. dollar, it has been
thanks to its privileged position as a non-member of the International Monetary
Fund.
A financial system that keeps forcibly immobilized such enormous resources,
badly needed by the countries to protect themselves from the instability
caused by that very system that makes the poor finance the wealthy, should
be removed.
The International Monetary Fund is the emblematic organization of the
existing monetary system, and the United States enjoys veto power over its
decisions.
As far as the latest financial crisis is concerned, the IMF showed a
lack of foresight and a clumsy handling of the situation. It imposed its
conditioning clauses that paralyzed the governments' social development
policies, thus creating serious domestic hazards and preventing access to
the necessary resources when they were most needed.
It is high time for the Third World to strongly demand the removal of
an institution that neither provides stability to the world economy nor
works to deliver preventive funds to the debtors to avoid their liquidity
crises; it rather protects and rescues the creditors.
Where is the rational and the ethic of an international monetary order
which allows a few technocrats, whose positions depend on the American support,
to design in Washington identical economic adjustment programs for implementation
in a wide variety of countries to cope with specific Third World problems?
Who takes responsibility when the adjustment programs bring about social
chaos, thus paralyzing and destabilizing nations with large human and natural
resources, as was the case in Indonesia and Ecuador?
It is of crucial importance for the Third World to work for the removal
of that sinister institution, and the philosophy it sustains, to replace
it with an international finances regulating body that would operate on
democratic bases and where no one has a veto right. An institution that
would not defend only the wealthy creditors and impose interfering conditions,
but would allow the regulation of financial markets to arrest unrestrained
speculation.
A viable way to do this would be by establishing not a 0.1 percent tax
on speculative financial transactions, as Mr. Tobin brilliantly proposed,
but rather a minimum 1 percent, which would permit the creation of a large
indispensable fund-in the excess of $1 trillion every year-to promote a
real, sustainable, and comprehensible development in the Third World.
The debt is a political issue
The underdeveloped nations' external debt is amazing not only because
it is terribly high but also due to its outrageous mechanism of subjugation
and exploitation and the absurd formula offered by the developed countries
to cope with it.
That debt already exceeds 2.5 trillion U.S. dollars and in the present
decade it has been increasing more dangerously than in the 1970s. A large
part of that new debt can easily change hands in the secondary markets;
it is more dispersed now and more difficult to reschedule.
Once again I should repeat what we have been saying since 1985: the debt
has already been paid if note is taken of the way it was contracted, the
swift and arbitrary increase of the interest rates on the U.S. dollar in
the previous decade, and the decrease of the basic commodity prices-a fundamental
source of revenue for developing countries. The debt continues to feed on
itself in a vicious circle where money is borrowed to pay its interests.
Today, it is clearer than ever that the debt is not an economic but a
political issue; therefore, it demands a political solution. It is impossible
to continue overlooking the fact that the solution to this problem must
basically come from those with resources and power-that is, the wealthy
countries.
The so-called Heavily Indebted Poor Countries Debt Reduction Initiative
exhibits a long name but poor results. It can only be described as a ridiculous
attempt at alleviating 8.3 percent of the South countries' total debt; but
almost four years after its implementation only four countries among the
poorest 33 have reached the complicated process simply to condone the negligible
figure of 2.7 billion U.S. dollars, which is 33 percent of what the United
States spends on cosmetics every year.
Today, the external debt is one of the greatest obstacles to development
and a bomb ready to blow up the foundations of the world economy at any
time during an economic crisis.
The resources needed for a solution that goes to the root of this problem
are not large when compared to the wealth and the expenses of the creditor
countries. Every year 800 billion U.S. dollars are used to finance weapons
and troops, even after the Cold War is over, while no less than $400 billion
go into narcotics and one additional billion into commercial publicity,
which is as alienating as narcotics; this is to mention just three examples.
As we have said before, sincerely and realistically speaking, the Third
World countries external debt is unpayable and uncollectible.
In the hands of the rich countries, world trade is already an instrument
of domination, which under neoliberal globalization will become an increasingly
useful element to perpetuate and sharpen inequalities as well as a theater
for strong disputes among developed countries for control over the present
and future markets.
The neoliberal discourse recommends commercial liberalization as the
best and only formula for efficiency and development. Accordingly, all nations
should remove protection instruments from their domestic markets while the
difference in development between countries, no matter how big, would not
justify separation from the only way offered without any possible alternative.
After hard negotiations in the WTO, the poorest countries have been conceded
a narrow time difference for full access to that nefarious system.
While neoliberalism keeps repeating its discourse on the opportunities
created by trade openings, the underdeveloped countries participation in
the world exports was lower in 1998 than in 1953-that is, 45 years ago.
With an area of 3.2 million square miles, a population of 168 million and
$51.1 billion in exports during 1998, Brazil is exporting less than The
Netherlands-with an area of 12,978 square miles, a population of 15.7 million
and exports for $198.7 billion that same year.
Trade liberalization has essentially consisted in the unilateral removal
of protection instruments by the South. Meanwhile, the developed nations
have failed to do the same to allow the Third World exports to enter their
markets.
The wealthy nations have fostered liberalization in strategic sectors
associated to advanced technology, where they enjoy enormous advantages
that the deregulated markets tend to augment. These are the classic cases
of services, information technology, biotechnology, and telecommunications.
On the other hand, agriculture and textiles, two particularly significant
sectors for our countries, have not even been able to remove the restrictions
agreed upon during the Uruguay Round because they are not of interest to
developed countries.
In the OECD, the club of the wealthiest, the average tariff applied to
manufactured exports from underdeveloped countries is four times higher
than that applied to the club member countries. A real wall of non-tariff
barriers is thus raised that leaves out the South countries.
Meanwhile, in international trade a hypocritical ultra-liberal discourse
has gained ground that matches the selective protectionism imposed by the
North countries.
The basic commodities are still the weakest link in world trade. In the
case of 67 South countries, such commodities account for no less than 50
percent of their export revenues.
The neoliberal wave has wiped out the defense schemes contained in the
terms of reference for basic commodities. The supreme dictum of the marketplace
could not tolerate any distortion; therefore, the Basic Commodities Agreements
and other defense formulas designed to face unequal exchange were abandoned.
It is for this reason that today the purchasing power of such commodities
as sugar, cocoa, coffee, and others is 20 percent of what it used to be
in 1960; consequently, they do not even cover the production costs.
A special and differentiated treatment to poor countries has been considered
not as an elementary act of justice and a necessity that cannot be ignored
but as a temporary act of charity. Actually, such differential treatment
would not only recognize the enormous differences in development that prevent
the use of the same yardstick for the rich and the poor but also a historically
colonial past that demands compensation.
Revolt in Seattle
The failed Seattle meeting showed the tedium caused by and the opposition
to neoliberal policies in growing sectors of the public opinion, in both
South and North countries.
The United States of America presented the Round of Trade Negotiations
that should begin in Seattle as a higher step in trade liberalization regardless,
or perhaps forgetful, of its own aggressive and discriminatory Foreign Trade
Act still in force.
That Act includes provisions like the "Super-301," a real display
of discrimination and threats to apply sanctions to other countries for
reasons that go from the assumed opposition of barriers to American products
to the arbitrary, deliberate, and often cynical qualification that that
government decides to give others on the subject of human rights.
In Seattle there was a revolt against neoliberalism. Its most recent
precedent had been the refusal to accept the imposition of a Multilateral
Agreement on Investments. This shows that the aggressive market fundamentalism,
which has caused great damages to our countries, has found a strong and
deserved world rejection.
In addition to the above mentioned economic calamities, on occasions
the high oil prices significantly contribute to the worsening of conditions
in the South countries which are net importers of that vital resource. The
Third World produces about 80 percent of the oil traded worldwide, and 80
percent of that amount is exported to the developed countries.
The wealthy nations can afford to pay any price for the energy they waste
to sustain luxurious consumption levels and destroy the environment. The
United States' consumption is 8.1 tons oil equivalent per capita while the
Third World consumes an average of 0.8 tons, and the poorest among them
only 0.3.
When the prices mount abruptly from $12 to $30 a barrel, or more, it
has a devastating effect on the Third World nations. This is in addition
to the external debt, the low prices of their basic commodities, the financial
crises, and the unequal terms of reference's negative impact weighing heavily
on them. Now, we perceive a similarly devastating situation emerging anew
among sister South nations.
Petroleum is a universally needed vital commodity, which actually escapes
the market laws. One way or another, the big transnationals or the Third
World oil exporting countries that associated themselves to defend their
interests were always able to determine its price.
The low prices mostly benefit the rich countries that waste large amounts
of fuel, restrain the search for and the exploitation of new deposits as
well as the development of technologies that reduce consumption and protect
the environment; and they affect the Third World exporters. On the other
hand, high prices benefit the exporters and can be easily handled by the
rich but they are harmful and destructive to the economies of a large part
of our world.
This is a good example to show that a differential treatment to countries
in different stages of development should be an indispensable principle
of justice in world trade. It is absolutely unfair that a poor Third World
country like Mozambique, with $84 per capita GDP, needs to pay for such
a vital commodity the same price as Switzerland, with $43,400 per capita.
This is a 516 times higher per capita GDP than that of Mozambique!
The San José Pact, concerted 20 years ago by Venezuela and Mexico
with a group of small oil importing countries in the region, set a good
precedent of what can and should be done, bearing in mind the particular
conditions of every Third World nation in similar circumstances-although
avoiding this time any conditions associated to the differential treatment
they might receive.
Some countries are not in a position to pay more than 10 U.S. dollars
a barrel, others no more than $15, and none more than $20.
However, the rich countries' world, prone as it is to big spending and
consumerism, can pay over $30 a barrel, taking hardly any damage. As they
consume 80 percent of the Third World countries' exports, this can easily
compensate a price lower than $20 for the rest of the nations.
This could be a concrete and effective way to turn South-South cooperation
into a powerful instrument of Third World development. To do otherwise would
invite self-destruction.
In a global world where knowledge is the key to development, the technological
gap between the North and the South tends to widen with the increasing privatization
of scientific research and its results.
The developed countries with 15 percent of the world's population presently
concentrate 88 percent of Internet users. Just in the United States there
are more computers than in the rest of the world put together. These countries
control 97 percent of the patents the world over and receive over 90 percent
of the international licenses rights while for many South countries the
exercise of the right to intellectual property is non-existent.
In private research, the lucrative element takes precedence over necessity;
the intellectual property rights leave knowledge out of reach for underdeveloped
countries and the legislation on patents does not recognize know-how transfer
or the traditional property systems, which are so important in the South.
Private research focuses on the needs of the wealthy consumers.
Vaccines have become the most efficient technology to keep health care
expenses low since they can prevent diseases with one dosage. However, as
they yield low profits they are put aside in favor of medications that require
repeated dosages and yield higher benefits.
The new medications, the best seeds and, in general, the best technologies
have become commodities whose prices only the rich countries can afford.
"We either unite or we die!"
The murky social results of this neoliberal race to catastrophe are in
sight. In over 100 countries the per capita income is lower than 15 years
ago. At the moment, 1.6 billion people are faring worse than at the beginning
of the 1980s.
Over 820 million people are undernourished and 790 of them live in the
Third World. It is estimated that 507 million people living in the South
today will not live to see their 40th birthday.
In the Third World countries represented here, two out of every five
children suffer from growth retardation and one out of every three is underweight;
30,000 who could be saved are dying every day; 2 million girls are forced
into prostitution; 130 million children do not have access to elementary
education and 250 million minors under 15 are bound to work for a living.
The world economic order works for 20 percent of the population but it
leaves out, demeans, and degrades the remaining 80 percent.
We cannot simply accept to enter the next century as the backward, poor
and exploited rearguard; the victim of racism and xenophobia prevented from
accessing to knowledge and suffering the alienation of our cultures due
to the foreign consumer-oriented message globalized by the media.
As for the Group of 77, this is not the time for begging from the developed
countries or for submission, defeatism, or internecine divisions. This is
the time to rescue back our fighting spirit, our unity and cohesion in defending
our demands.
Fifty years ago we were promised that one day there would no longer be
a gap between developed and underdeveloped countries. We were promised bread
and justice; but today we have less and less bread and more injustice. The
world can be globalized under the rule of neoliberalism but it is impossible
to rule over billions of people who are hungry for bread and justice.
The pictures of mothers and children under the scourge of droughts and
other catastrophes in whole regions of Africa remind us of the concentration
camps in Nazi Germany; they bring back to us memories of stacks of corpses
or of moribund men, women, and children.
Another Nuremberg is required to put to trial the economic order imposed
on us, the same that is killing of hunger and preventable or curable diseases
more men, women, and children every three years than all those killed by
World War II in six years. We should discuss here what is to be done about
that.
In Cuba we usually say: "Homeland or Death!" At this Summit
of the Third World countries we would have to say: "We either unite
and establish close cooperation, or we die!" Thank you, very much.
Socialist Action /May 2000 |