By Dr. Sawraj Singh
The just concluded G-20 Summit in Los Cabos, Mexico showed that the developing countries are gaining ground on the developed countries in a big way. The BRICS countries, all five of whom happen to be members of the G-20, made a very big impact at the summit. Gone are the times when the developing countries used to beg for help from the developed countries.
This time, the developing countries contributed in a big way to bail out the developed countries of Europe. The BRICS countries pledged 75 billion dollars to the International Monetary Fund (IMF) so that it can help the European countries to come out of the present crisis. Brazil pledged 10 billion dollars, Russia pledged 10 billion dollars, India pledged 10 billion dollars, China pledged 43 billion dollars, and South Africa pledged 2 billion dollars. The BRICS is emerging as the biggest force in the developing countries which is ready to take on the monopoly and hegemony of the West. The BRICS has 42% of the world’s population and more than 25% of the land mass. The combined Gross Domestic Product (GDP) of the BRICS countries is 13.5 trillion dollars, which is 19.5% of the world’s total GDP. However, the most impressive statistic is that in the last two years, the BRICS countries contributed more than 50% of the total economic growth of the world.
Helping Europe to come out of the present crisis dominated the summit. The European members of the G-20 assured that summit that they will take all the necessary measures to protect the Euro area. They will take all the necessary measures to safeguard the integrity and stability of the area and improve the financial markets.
The leaders were very concerned about the election results in Greece. The Syriza, the extreme left party, had threatened to pull out of the European Union if it won the election. However, the center-left party had declared that it would accept the conditions laid down by the European Union to give Greece the bail out money and Greece will stay in the European Union, if it won the election. The center-left won the election.
It also became clear that the austerity measures promoted by the German Chancellor Angela Merkel are losing out to the economic growth policy of the French President Hollande. The summit leaders agreed not to introduce new protectionist measures until 2014. The leaders also emphasized economic growth as a measure to stimulate the economy and come out of the present crisis.
The BRICS leaders demanded changes in the present IMF structure and function and wanted increased representation of the developing countries in the organization. If we compare the economic growth of the developing countries to the developed countries, then it becomes clear that the developing countries are really gaining ground:
Argentina: 8.9% Canada: 2.4%
India 6.9% Australia 2.2%
China approximately 8.5% European Union 1.5%
Indonesia 6.5% Japan 0.7%
Turkey 8.5% USA 1.7%
The painful reality is that the present monetary and financial institutions are based upon inequality and unfairness. These were created to preserve and perpetuate the western hegemony and domination. The International Monetary Fund, the World Bank, and the World Trade Organization are the three pillars of the Breton Woods system, which evolved after the Second World War. Breton Woods is a city in the state of h New Hampshire (USA). The 44 ally countries met there for three weeks in July, 1944 and evolved the Breton Woods system.
The institutions which were built on the Breton Woods system were based upon inequality and unfairness, with the sole purpose of maintaining western control over these institutions and help to bring the resources of the developing countries under the control of the developed western countries.
The monetary system was just as unfair and unequal. The other currencies were tied to the U.S. dollar. The dollar was convertible to gold. In other words, the dollar was as good as gold. However, on August 15, 1971, the USA unilaterally terminated the convertibility of the dollar to gold. This was probably done because of the policy of quantitative easing. This is a respectable term used for the process of printing more paper currency without an increase in the resources which support the currency. This measure just puts more paper money into circulation. If the developed countries expect the developing countries to help them to come out of the crisis, then the developed countries have to give the developing countries their fair share in the financial intuitions and in the monetary system.
The western domination and the American hegemony have outlived their course. The time has come to change the present world order because the conditions which gave rise to the order have already changed. The new world order, the multipolar world, has to be based upon equality, fairness, justice, and mutual respect. The Los Cabos summit clearly showed that the change is coming. It is in the interest of everyone that the change is peaceful. If the west gives up its arrogance and accepts the new reality of the world and gives up the old habit of unleashing world war, then everyone will be better off.
Dr. Sawraj Singh, MD F.I.C.S. is the Chairman of the Washington State Network for Human Rights and Chairman of the Central Washington Coalition for Social Justice. He can be reached at [email protected].
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