Alliance for Responsible Trade

 IN THE FACE OF THE FINANCIAL CRISIS, WE DEMANDED A CHANGE IN MODEL

 Social leaders of Mexico, Colombia, Venezuela, Ecuador, Peru, Argentina, Bolivia and Chile, belonging to the Hemispheric Social Alliance, meeting in Quito on 15 November 2008 -- at the same time as the leaders of the G20 in Washington-- discussed the implications of the current global financial crisis and the actions that the peoples of the Continent should take. To the event we invited the Minister for the Coordination of  Economic Policy of Ecuador, Pedro Páez;  the Senator of the Alternative Democratic Pole of Colombia, Jorge Enrique Robledo; and the Ambassador of Bolivia in Ecuador, Juan Javier Zárate, who expressed their views on the subject that brought us together.

 After broad discussion of the causes, of those responsible, of its impacts on society and  proposals for a solution, we concluded:

1. Depth and gravity of the crisis ·

 The crisis of the global economy is a consequence of the modes of production and expansion of the capitalist system. It is, in addition, of a structural character and not only financial as is claimed. It includes other crises as well, like energy, food and climate. All endanger humanity, and require speedy action by the world's peoples.

The current financial situation is the reflection of an economic model in which it is better  business to speculate financially than to produce real goods, until the bubbles burst, as also happened on this occasion. It is not another of the cyclical crises of capitalism; this crisis is much deeper, because in addition to the inevitable overproduction that  capitalism entails, it means the explosion of an economic model that has hindered production in the South, generating unemployment and deepening poverty ·

Already in previous speculative crises new fields of speculation to continue making great fortunes were found. Today's crisis began years ago and not even wars prevented it. The false solutions that were attempted not only led to explosions in the financial sector; their effects are transferred to the real economy, causing generalized recessions, high levels of unemployment and distressing social situations in the globalized economies. ·

The consequences of the financial crisis remain to be seen. Its magnitude can exceed the most pessimistic calculations. The economies that will most suffer their effects will be those most connected to global economic circuits, that depend on exports to the developed countries and that have damaged or lost their internal market due to neoliberalism. The effects on the lives of millions of people could be dire if the real causes are not faced.

 The current crisis is a new type, not like the traditional cyclical crises that are a fruit of the "market". It is a crisis with concrete causes: groups of speculators who in their greed for profits led to the collapse of the system, although it is necessary to be clear that is  not only one sector or economic group, but a form of investment made by all the great capitals who want to appear productive. ...

2. It proves the falsity and the failure of neoliberal ideology

 The recent financial crisis is clear evidence of the ideological failure of neoliberalism and its defenders, which propounded the dogma of the invisible hand of the market as self-regulation.  Now they applaud when the "visible hand of the state" rescues them, when in the last 25 years they preached that the state should only guarantee security and avoid intervening in any economic task.

 3. In the search for solutions all countries should participate, consulting their peoples, and not only the large economies among which are the principal causes of the crisis.

 If we leave the powerful alone to seek solutions they could include more speculation, trying to recover their losses. This is already happening with the currencies of some countries, leading to large-scale devaluations and using the reserves of these states in a futile effort to defend them.  They also accept the need for more controls and regulations that give more power to ungrateful institutions like the IMF and World Bank, which had already recommended that countries increase fiscal outgo, increasing the external debt, whereas before they pressured or required the contrary.

 Today the most powerful countries and their transnationals are meeting to seek solutions, but in general they place the emphasis on stabilizing and rescuing the financial system that caused the crisis.  Although speaking of reactivating the economy or at least reducing the depth and duration of the recession, they insist on "free trade" and savage competition, which will rescue the large capitals while crushing or absorbing the smaller ones.

 4. The solutions proposed are to deepen the model

 In the face of the inability to resolve the economic recession by their own forces, the powers support deepening the neoliberal recipe of a greater exploitation of labor and natural resources, trying to reactivate production, The crisis can be a pretext to ignore existing international obligations that address the climate and energy crises.

 5. The peoples must prevent more neoliberalism being used to confront the crisis

 The evident ideological failure and in the facts of neoliberalism must be confronted by the most ample social struggle in those countries where those who are badly governing insist on their application as a solution, but also the greatest vigilence in those countries whose governments are trying to change course, while facing strong pressures from the most reactionary and anti-national sectors.

 The initial lines that we propose to face the crisis:

This financial crisis forces to us to intensify social struggles against neoliberalism and its promoters, main causes of the hateful inequalities that most of us who live in the countries of the South suffer. On behalf of the ASC we propose some ideas that attempt to propose an alternative economic model:

1. Regional integration from the peoples could be a formidable weapon to confront the current systemic crisis.

 We know that there have been inconclusive discussions among governments about what kind of regional integration they are seeking. The peoples have reached a consensus on their own proposal for regional integration, that is an integration that is not only commercial but is for the well being of all and in harmony with nature.

In the face of the global crisis, accelerating this type of integration permits the conquest of greater sovereignty for the implementation of models for development oriented towards living well and in harmony with Pachamama.

 To confront the financial instability, the lack of credit and the tendency to place conditions on the granting of credits from the multilateral financial system, we consider it fundamental to accelerate the creation of a regional financial system that facilitates financing without the traditional conditions of the multilateral banks, allows an effective defense against global financial instability, and supports the monetary stability of all the members against possible speculative attacks against their national currencies. The social movements will continue improving our proposals for the design of such institutions.

 The solution will not come by going back to sign letters of intent with the IMF or with the World Bank, as some governments have proposed.

 2.  The governments must implement immediate defensive measures against speculation in our currencies and the possible flight of capital, such as exchange controls.

  We are aware that some of our countries have international treaties that limit their capacities to make use of this of this measure, but also provide that in case of possible crises of balance of payments by a reduction of the income from imports and the diminution of foreign investments such measures are allowed. We are faced with an emergency and for that reason it is necessary to take this measurein preventive form.

  3.  We share the just decision of Ecuador to audit its external debt and, based on its results, to suspend payments. We exhort our governments to do the same: they are not obliged to pay debts that are illegitimate and - at least- speculative.

4.  The global crisis makes clear the vulnerability of the economies that have made the export sector the only motor of growth.

 Exports are beneficial for the economy to the extent that they have a high national content and for that reason dynamize the whole of the economy, but one cannot depend only on this sector and thereby be highly vulnerable to price fluctuations and to the economic cycles of the powers to which this production is destined. We must fortify complementary intra-regional trade. Tthe center of the economy must return to produce what we consume nationally and regionally.

5.  It is time to revise all the FTAs and treaties for the reciprocal protection of investments. 

 It is not possible that at the same time we recognize that the market does not regulate itself, the governments continue to accept the straitjacket that these treaties signify for intervening and regulating the economy in pursuit of a national project of development for living well.

 6.  We will struggle that our governments not only have aggressive anti-recession policies, but also economic policies that fortify the internal market as the main motor of the economy.

 As we have said, the global crisis is not only financial, but is also a food crisis. Therefore we must put in the center of the policies of reactivation of the economy those tending to assure national and regional food security, based on family production and not on extensive monocultures that are also an attack on sustainability.

.Plan of action: ·

 -Work to widely socialize the explanation of the causes and the characteristics of the present crisis ·

-Impel an ample discussion and deepening of the proposals of solution to the present crisis advanced here. We invite all the sectors and social movements to discuss, to enrich and to improve these proposals

-Mobilizations to prevent that those causing the crisis remain unpunished, transfer the costs to the peoples, and to push forward the previous measures and in general so that the solutions reach the structural root of the problems ·

-We propose to launch a campaign or world-wide letter demanding transparency, audits of the debts, of the risks assessors that often used political criteria to determine a country's risk.  Thereby it increased the load of the debt on our peoples, of international financial institutions that remained inert before a crisis that was announced more than a year ago. Impunity cannot be tolerated, the crisis has causes, it did not fall of the sky.

 

We propose to have a document with agreed upon proposals for which we will fight, beginning by presenting them to the heads of state which agree to attend our dialogue meeting, in the framwork of the Summit of Heads of State and of Government which will meet in Salvador de Bahía - Brazil in December of this year.

 The moments in which we can deepen our proposals and action plans are the following:

 29 Nov-2 December, Doha: Global Summit for Financing Development.

12-15 December, Salvador Bahía. Summit of the Peoples of Latin America and the Caribbean.

16-17 December, Salvador Bahía. Summit of Presidents of Latin America and the Caribbean..

15 February 2009, London. New meeting of the G20.

16-18 April. Trinidad and Tobago. Summit of the Heads of State and Government of the Americas

The Hemispheric Social Alliance calls upon its organizations to include on the agenda a detailed following of the road which the crisis is taking,warning of the impacts on our peoples and advancing the corresponding actions.  We invite the creation of a wider working group on the global crisis, which will advance the construction of structural and deep solutions within the global framework of all our activity.

 Hemispheric Social Alliance

November 25, 2008.

 Quito Declaration:

Ecuador Decide

HSA