Economic slump dominates Social Forum

Lori Wallach told delegates that it was time to play by new rules.

The global economic slowdown has dominated talks at the alternative World Social Forum in Brazil where speakers called for more sustainable development.

This content was published on February 2, 2002 minutes

Thousands of kilometres south of the World Economic Forum (WEF) in New York City, delegates at the alternative summit in Porto Alegre examined ways of ensuring more stable and equitable world growth.

The conference, now in its second year, developed out of a desire to give organisations and individuals a forum to discuss their opposition to globalisation and the WEF.

Argentinian meltdown

The Argentinian crisis, speakers said, had shone the spotlight on the negative side of unregulated capital flows. They argued that only an effective control of capital movement could ensure such economic crises are avoided in southern countries.

"The global financial system has failed," said Dominique Pihon, economics and politics professor at the University of Paris. The fact that, at the global level, 80 per cent of cash flows are concentrated in the 20 richest countries is evidence of the problem, he argued.

It is even more worrying that the current system is aggravating instability within developing countries, Pihon added. "We must therefore look for an alternative approach."

Three priorities

Delegates produced a three-point framework to change the current financial system into one of more "sustainable development". Lori Wallach from the organisation Public Citizen, said it was time the economy operated according to different rules.

In the first instance, it should be left up to individual countries to decide on an economic model which is best suited to their specific social, economic and political needs.

Secondly, the plan called on each country to become more financially self-sufficient, using their own resources. This, World Social Forum participants said would cure the woes of foreign debt.

Finally, it is incumbent on nations to control the movement of capital because this mobility is often the root cause of socio-economic ills, delegates argued.

Controlling the flow

Tightening the grip on capital flows should not be translated into a closed-door policy on foreign investment, said economist Gigi Francesco from the Non-Govermental Organisation (NGO) DAWN. "Above all it means discouraging speculative investment over the short term," he argued.

Role of Switzerland

Swiss parliamentarian Rudolf Strahm who is attending the alternative conference, said that more scrutiny needed to be placed on so-called financial havens.

"It's important to place pressure on financial paradises," the Social Democrat from Bern said. Based on figures he obtained from the Swiss National Bank, Strahm told conference participants that some SFr166 billion ($96.62 billion) in cash from Caribbean off-shore funds were found stashed in Swiss coffers in 2000.

Representatives from several nations sought to ask Strahm about the amount of money stored in Switzerland by their own countries.

"A realistic Utopia"

Participants believe that it is time to put these ideas into practise. When asked how, Pihon responded that there were no technical problems. Rather, "all depends on political willingness." He concluded that "our Utopia is realistic."

by Nenad Stojanovic, Porto Alegre

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