Analogies with the Great Depression abound, notes Gamal Nkrumah The United Nations General Assembly avowed a plan on Monday to establish a task force chaired by Nobel laureate Joseph Stiglitz to contain the global financial crisis. The UN committee also comprises Belgian sociologist François Houtart, Indian economist Prabhat Patnaik and Ecuador's Minister for Economic Policy Pedro Paez. At the General Assembly, many nations condemned the current international monetary and financial system, founded in 1944 during the UN's Monetary and Financial Conference at Bretton Woods, New Hampshire, insisting it must be radically amended to more sensitively deal with global challenges in a sustainable and equitable manner. The new dispensation would hopefully ensure that the rich do not get richer and the poor do not get poorer, both between countries and within countries. As the world treads the shadowy path down which the Bretton Woods institutions have taken, it becomes glaringly obvious that the powers that be are imposing their own agenda in a most uncouth fashion. To begin with, the interests of the developing countries of the South are not fairly represented in international institutions; but even if they were, the institutions themselves are designed to work against the interests of developing countries. And, this inbred biased dynamic is not confined to the least developing countries. Even the developing countries classified as "emerging markets" are subjected to bullying by Bretton Woods bigwigs. According to the Organisation for Economic Cooperation and Development, the gap between rich and poor has widened in most developed countries over the past two decades as economic growth has benefited the wealthy more than the impoverished. This is not merely coincidental. The current financial maelstrom has uncovered serious flaws in the global system including the manner in which the interests of the developing world are systematically undermined by the world economic order. For most developing countries, the 1997-98 Asian financial crisis was an eye-opener. Their capital reserves are greedily eyed by richer nations and put to good use. For instance, China, India and Korea have massive foreign reserves, invariably in US treasury bonds. To protect their currencies from vicious speculators such as Soros, developing countries are ironically egged on to tie up the bulk of their capital overseas -- read, in rich countries -- when this surplus capital should be invested in the country's own development -- roads, for example, and schools to produce engineers, scientists and IT technicians. In 1997-98, during the artificially created Asian financial meltdown, not only did the US and the IMF stop the Asian countries from implementing a state bail-out, they took advantage of the desperate situation to force South Korea and other Asian nations to adopt further financial deregulation. The developing countries that have resisted IMF browbeating are the ones that escape relatively unscathed from the global financial crisis -- Malaysia being the prime example. The Western model of neoliberal financial system is driven by clear self-interest, argues the Cambridge economist Ha-Joon Chang. The West couldn't compete in manufacturing (its labour costs are too high), so it turned to financial markets as the cheapest way to make money. Deregulation and increasingly dubious "plain vanilla" products such as "interest rate swaps", "collateral debt obligations", and then "credit default swap insurance" may have made a few people rich, but it was not, by any definition, development. The current world crisis is a direct result of the neoliberal scam of the past two decades. According to the International Labour Organisation (ILO), world unemployment is expected to skyrocket by 20 million as a result of the recession in the world economy caused by the financial crisis. The ILO's tentative estimations suggest the number of unemployed could rise from 190 million in 2007 to 210 million in 2009, the first time in recorded world history that joblessness has ever been higher than 200 million. Bush, Sarkozy and European Union President Jose Manuel Barroso declared in Camp David that they intend to revamp the regulatory framework for global finance. The poor are tired of the West's hypocritical pontificating. "Reneging on our commitments to the world's poor cannot be an austerity measure," said US Secretary of State Condoleezza Rice at a White House- sponsored summit on international development aid. Developing nations anticipate such circuses with trepidation if not dread. ILO Director-General Juan Somavia proposed that Bush's forthcoming farce should focus on "protecting and promoting sustainable enterprises and decent work opportunities." Bush and his European counterparts met at Camp David, Maryland, last weekend to discuss the global economic slowdown. Bush coined the preposterous and deceptive phrase "democratic capitalism" to describe his silly schemes to host emergency summits of leaders of the world's leading economies. The aim is ostensibly to confront the global financial crisis head on. More likely, how to tighten the noose on the developing world without provoking outright rebellion. Tentatively, the dubious gathering is scheduled "soon after" the 4 November election. "This financial crisis is a moral crisis," recently noted William M Gumede, former deputy editor of South Africa's The Sowetan. He poured scorn over those in the developing countries who pinned their hopes on the multi-billion rescue packages of the West. Such optimism is misplaced at a time when aid commitments to poorer countries are expected to plummet. Flows of funds from rich to developing countries were already a mere trickle even before the current financial crisis. The credit freeze in Western nations will impact the poor the hardest. Banks from the rich countries virtually control all world financial transactions; as they begin to cut back, they will start with their activities in the most vulnerable nations. Furthermore, the money originally allocated to fund projects in developing countries will now dry up, along with charity and NGO activities. "Many developing countries for some time now have complained they lacked the freedom to come up with economic policies appropriate to their own circumstances -- a handicap not restricting richer nations," writes Gumede. Wealthy nations insist that protectionism is passé, though they themselves cling to the policy of subsidising their farmers. "Nobody wants to put in place protectionism," French Prime Minister François Fillon pontificated at the Francophonie Summit in Quebec, Canada. "What we want is to put in place a regulation of the financial system that is coherent and harmonious across the territories of the planet." But such words fall on deaf ears when it comes to the crunch. Egypt's Trade and Industry Ministry this week cancelled export taxes on cement, iron and steel to avoid making the country's exports less competitive amid a shortage of credit. And there'll be lots more of this as things get worse. It is against this ominous backdrop that Aravind Adiga won the Booker Prize for The White Tiger. Adiga's novel masterfully depicts the abject poverty entrenched across swaths of rural and slum-city India. Just as Steinbeck touched the conscience of America with his novels on the dust bowl and the Great Depression, and Charles Dickens challenged the vain certainties of Victorian Britain with his maudlin melodramas, so the Indian sage's novel blasts the grotesque economic system oppressing us all. A handful of Bangalore IT millionaires grow obscenely rich as 18,000 indebted farmers commit suicide each year -- 200,000 in the past 12 years. Adiga throws mud in the face of 21st century India, neoliberal poster-boy.
