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© Hazel Henderson, July 2001
REJECTS THE WASHINGTON CONSENSUS
Almost 1000 legislators from Latin America’s Parliament of 22 countries, including Mexico, Central America and the Caribbean met in July in spectacular Caracas to discuss “The Social Debt.” Hosted by the Venezuelan Parliament and inaugurated by President Hugo Chavez, the conference concluded that a new paradigm of economic development must succeed the failed neoliberal, debt-prone IMF-World Bank model.
Parliamentarians from Argentina, Brasil and Chile highlighted the current crises caused by currencies too rigidly-pegged to the over-valued US dollar, leading to the new round of “contagion.” The Washington Consensus model of open economies and capital flows, export-led, GDP-measured growth and “free” trade was seen as leaving countries excessively vulnerable to the $1.5 trillion daily currency flows (90% unrelated to trade, i.e., speculation), as well as the short-term “hot money” in portfolio investments.
The focus of the conference was on external debt and how best to renegotiate its terms and identify unrepayable and odious debt (incurred in corrupt circumstances without democratic oversight). A keynote speaker, Nobelist Adolfo Perez Esquivel of Argentina reminded the delegates (including academics, NGOs, and indigenous leaders) of the ill-fated proposal of Peru’s former President Alan Garcia, to limit Peru’s debt repayments to 10% of export income.
In hindsight Garcia’s was a sensible proposal. Nevertheless, it triggered the ire of the IMF and international financial community and isolated Peru. The lesson that Nobelist Perez Esquivel drew from this was that all the indebted countries of Latin America, Central America and the Caribbean should stand in solidarity and renegotiate collectively with the IMF and the other creditors.
Many other, more technical proposals for debt reduction were presented and the debate will continue at the upcoming UN Summit on Finance and Development in Monterrey, Mexico, March 2002. The Caracas conference affirmed the need for closer integration in dealing with debt.
Delegates favored pursuing all the viable alternative paths to more equitable, participatory, culturally-specific and ecologically sustainable development. Many successful case studies of such alternative homegrown development initiatives were showcased – along with more comprehensive indicators measuring actual quality-of-life outcomes in better health, education, etc. beyond simplistic per-capita GNP-growth. Stress on values and ethics in economic development to assure poverty alleviation focused on the unacceptable gaps between rich and poor in many of the member countries of the Latin American Parliament.
This Parliament, with headquarters in Sao Paulo, Brasil was founded in 1964 in Lima, Peru initially by the parliaments of Argentina, Brasil, Chile, Columbia, Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. Currently, Mexico’s Beatriz Paredes Rangel holds the Parliament’s Presidency. The Executive Director and former President is Dr. Humberto Pelaez Guitierrez of Columbia. The Venezuelan Parliamentary Group’s President, Rafael Correa Flores presided as host of the conference.
The Latin-American Parliament has permanent commissions on many issues: economic and social policy, health, education, energy and environment, and is committed to principles of democracy, self-determination of the people, pluralistic politics and ideologies, equality, justice, human rights, peace and Latin America integration.
This powerful Parliament is a strong voice in ongoing deliberations over hemispheric trade and development initiatives, including the Free Trade Area of the Americas. The shared Iberian culture, history and similar languages could facilitate integration even more easily than that of the multi-lingual members of the European Union.
The leadership role of Venezuela is becoming more pronounced. President Hugo Chavez is fostering greater integration and dialogue among the Latin American countries. At the same time the globe-trotting young President has breathed new life into OPEC. Chavez’ bold experiments in shaping a more equitable, grassroots, participatory development model in Venezuela keep his approval ratings higher than most other elected leaders in the world.
Yet Chavez is much misunderstood by the financial press and by US commentators. In an exclusive interview, I asked President Chavez how he deals with such misunderstandings. Many of his initiatives with OPEC and its oil price band and with his concessionary oil exchange or barter agreements with 13 Latin and Central American countries are both innovative and pragmatic. Chavez’ view of grassroots, participatory democracy beyond the classical representative model is now enshrined in Venezuela’s new Constitution.
Yet, such new ideas are often viewed through Cold War prisms or obsolete economic textbooks. For example, economists still are taught that barter is “primitive” rather than seeing its new role in thousands of high-tech, money-free trading systems in today’s information economies.
President Chavez shrugged, saying, “I worry more about the corrosive effect on our children, families, countries and cultural heritage from the daily barrage of sex, violence and degradation merchandised by US commercial mass media.” The phrase that rang in my ears from many voices as I returned from Caracas: “There is a crucial difference between money and wealth”.
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HAZEL HENDERSON, author, futurist and consultant on sustainable development. Her latest book is Beyond Globalization: Shaping a Sustainable Global Economy. www.hazelhenderson.com. Henderson’s Quality of Life Indicators, partnered with the US based Calvert Group of socially-responsible mutual funds are at www.calvert-henderson.com.