We Either Unite or We Die
by Fidel Castro
from the book
Democratizing the Global Economy
Kevin Danaher - editor
Common Courage Press 2001
The largest grouping of third world countries in the United
Nations is the Group of 77 (G77), formed in 1964 and now numbering
133 countries. In mid-April 2000, these nations, representing
the majority of the world's people, met in Havana, Cuba, and issued
a proclamation harshly critical of the policies of the World Bank
and the International Monetary Fund. The following speech by Cuban
President Fidel Castro was met with thunderous applause at the
G77 Summit, but the U.S. press failed to cover Castro's speech
or the other criticism coming from the G77.
Never before has humankind had such formidable scientific
and technological potential, such extraordinary capacity to produce
riches and well-being, but never before have disparity and inequity
been so profound in the world.
Technological wonders that have been shrinking the planet
in terms of distances and communications coexist 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: 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 cell phones and access to the Internet and global communication
networks. They enjoy a nutritious, 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. Eighty-five percent of the passengers on
this ship are crowded into its dirty hold, suffering hunger, disease,
and helplessness.
The Heads of State meeting here, who represent the overwhelming
and hurting majorities, have not only the right but the obligation
to take our rightful place at the helm to ensure that all passengers
can travel in conditions of solidarity, equity, and justice.
Free Market Dogma
For two decades, the Third World has been repeatedly listening
to only one simplistic discourse, and one single policy has prevailed.
We have been told that deregulated markets, maximum privatization,
and the state's withdrawal from economic activity are the infallible
principles conducive to economic and social development. The developed
countries, particularly the United States, the big transnationals
benefiting from such policies, and the International Monetary
Fund have designed in the last two decades a world economic order
that is hostile to poor countries' progress and that is not sustainable
in terms of the preservation of society and the environment.
Two decades of so-called neoliberal structural adjustment
have left behind economic failure and social disaster. Under neoliberal
policies the world economy experienced global growth between 1975
and 1998 which hardly amounted to half that attained between 1945
and 1975 with Keynesian market regulation policies and active
participation in the economy by governments.
In Latin America, where neoliberalism has been applied with
strict adherence to doctrine, economic growth in the neoliberal
stage has been lower than that attained under the previous state
development policies. After World War II, Latin America had no
debt but today we owe almost $1 trillion. This is the highest
per capita debt in the world. The income disparity 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 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 recent years to describe the world economic
order.
The deregulation that comes with neoliberalism and the liberalization
of capital movements have a deep negative impact on a world economy
where speculation blooms in currency markets and derivative markets,
and mostly speculative transactions amount to no less than $3
trillion daily.
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 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. 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 twenty 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 1997 financial crisis
in Southeast Asia.
Presently, $727 billion 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.
Demand Removal of the IMF
Cuba has successfully carried out education, healthcare, culture,
science, sports, and other programs-despite four decades of economic
blockade-and revalued its currency seven times in the last five
years in relation to the U.S. dollar. This has been thanks to
Cuba's privileged position as a non-member of the International
Monetary Fund.
A financial system that keeps forcibly immobilized 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; rather, it protects and rescues
the creditors.
Where is the rationale and the ethic of an international monetary
order that allows a few technocrats, whose positions depend on
American support, to design in Washington identical economic programs
for implementation in a 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 financial regulating
body that would operate on democratic bases and where no one has
veto power; an institution that would not defend only the wealthy
creditors and impose interfering conditions, but would allow the
regulation of financial markets to stop 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 one percent tax that
would permit the creation of a large fund, in excess of $ 1 trillion
every year to promote sustainable and comprehensive development
in the Third World.
The Debt Has Already Been Paid
The underdeveloped nations' external debt already exceeds
$2.5 trillion and during the l990s it increased 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.
As 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 1980s and the decrease of basic commodity prices-a fundamental
source of revenue for developing countries. The debt continues
to feed on itself in a vicious circle whereby money is borrowed
to pay interest on old debt.
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 come from those with resources and power,
that is, the wealthy countries.
The so-called Heavily Indebted Poor Countries Debt Reduction
Initiative (HIPC) exhibits a big name but small results. It can
only be described as a ridiculous attempt at alleviating 8.3 percent
of the South countries' total debt. Almost four years after its
implementation only four countries among the poorest thirty-three
have navigated the complicated process simply to condone the negligible
figure of $2.7 billion, which is one-third 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
is used to finance weapons and troops, even after the Cold War
is over, while no less than $400 billion go into narcotics, and
additional billions go into commercial publicity that is as alienating
as narcotics.
As we have said before, realistically speaking, the Third
World countries' external debt is unpayable and uncollectible.
World Trade
In the hands of the rich countries, world trade is an instrument
of domination. Under neoliberal globalization trade has perpetuated
inequalities and provided a venue for settling disputes among
developed countries for control over present and future markets.
The neoliberal discourse recommends commercial liberalization
as the best and only formula for efficiency and development. While
neoliberalism keeps repeating its discourse on the opportunities
created by trade openings, the poor countries' participation in
world exports was lower in 1998 than in 1953. Brazil, with an
area of 3.2 million square miles, a population of 168 million
and $51.1 billion in exports during 1998, is exporting less than
The Netherlands with an area of 12,978 square miles, a population
of 15.7 million and exports of $198.7 billion that same year.
Trade liberalization has essentially consisted of the unilateral
removal of protection instruments by the South. Meanwhile, the
developed nations have failed to do the same to allow Third World
exports to enter their markets.
The wealthy nations have fostered liberalization in strategic
sectors associated with advanced technology-services, information
technology, biotechnology, and telecommunications- where they
enjoy enormous advantages that deregulated markets tend to augment.
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 this is not of interest to developed countries.
In the OECD [Organization for Economic Cooperation and Development],
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 tariff
and non-tariff barriers is thus raised that excludes products
of the South countries.
Basic commodities are still the weakest link in world trade.
In the case of sixty-seven South countries such commodities account
for no less than fifty 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 cannot tolerate any distortion, therefore the Basic
Commodities Agreements and other formulas designed to address
unequal exchange were abandoned. It is for this reason that today
the purchasing power of such commodities as sugar, cocoa, coffee
and others is twenty percent of what it used to be in 1960; consequently,
sales revenue does not even cover production costs.
A special and differentiated treatment for 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 colonial
past that demands compensation.
Significance of the Revolt in Seattle
The failed WTO meeting in Seattle showed that neoliberal policies
are generating intensified opposition among more and more people,
in both South and North countries. The United States of America
presented the Round of Trade Negotiations that should have begun
in Seattle as a higher step in trade liberalization, regardless
of its own aggressive and discriminatory Foreign Trade Act still
in force. That Act includes provisions like the "Super301",
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 and often cynical
judgements made by the U.S. government regarding the human rights
situation in other countries.
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 (MAI). This shows that
the aggressive market fundamentalism, which has caused great damage
to our countries, has found a strong and deserved world rejection.
The Technology Gap
In a global economy 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 fifteen percent of the world's
population presently concentrate eighty-eight percent of Internet
users. There are more computers in the United States than in the
rest of the world put together. Rich countries control ninety-seven
percent of patents globally and receive over ninety percent of
international licensing rights, while for many South countries
the exercise of the right to intellectual property is nonexistent.
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 wealthy consumers.
Vaccines have become the most efficient technology to keep
healthcare expenses low since they can prevent diseases with one
dosage. Because they yield low profits, however, vaccines are
put aside in favor of medications that require repeated dosages
and yield higher financial benefits.
The new medications, the best seeds, and, in general, the
best technologies have become commodities whose prices can be
afforded only by the rich countries.
The murky social results of this neoliberal race to catastrophe
are in sight. In over one hundred countries the per capita income
is lower than fifteen years ago. At the moment, 1.6 billion people
are faring worse than at the beginning of the 1 980s.
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 fifteen are forced to work. The world economic order
works for twenty percent of the population but it leaves out,
demeans and degrades the remaining eighty percent.
We cannot simply accept to enter the next century as the backward,
poor, and exploited rearguard; the victims of racism and xenophobia
prevented from access 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 recover 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 memories of stacks of corpses and moribund men,
women, and children.
Another Nuremberg is required to put on trial the economic
order imposed on us: a system that is killing of hunger and curable
diseases more men, women, and children every three years than
all those killed by World War II in six years.
In Cuba we usually say: "Free 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!"
The full text of Castro's speech and other documents of the
South Summit can be found on the website www.G77.org.
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