Maravi

This is a very serious crisis

This is a very serious crisis
Written by Editor

WE are in the midst of an economic Tsunami. And we share the bitter feeling of impotence that most of our politicians have in the face of such problems and their concern for the political instability to which this economic crisis may give rise.

So gloomy are the realities and prospects for the future viewed as a whole that they could generate pessimism and discouragement if we are not sure of our aims. They are an inevitable bitter pill to swallow, but if we are to face up to the realities, we first have to become aware of them.

We do not have, nor do we think anyone has, magic remedies for such difficult, complex and apparently insoluble problems. History shows, however, that no problem has ever been solved until it has become a tangible reality of which everyone is aware. Today, we are faced with the most universally serious and anguishing situations ever known in recent years. In short, for the first time, we are faced with the question of whether or not we are to survive.

But no matter how enormous the difficulties, no matter how complex the task, there can be no room for pessimism. This would be to renounce all hope and resign ourselves to death. We have no alternative but to struggle, trusting in the great moral and intellectual capacity of the human race and in its instinct for self-preservation, if we wish to harbour any hope for survival.

Only with a tremendous effort and the moral and intellectual support of all can we face the future that objectively appears desperate and sombre.

The difficulties we today face are very distressing. But it is utterly impossible to situate ourselves in the reality of today's world if the panorama that is unfolding is not made reality that is understood by our politicians who should dedicate profound meditation to it. This problem needs to be understood very clearly by our politicians for them to appreciate the tragedy of our people.

We appreciate the fact that as politicians, they derive great experience from the exercise of their political functions but they do not have the privilege of being - nor could they be - specialists in all economic and social spheres. They are basically politicians - in itself one of the most difficult tasks in today's world - and above all, they must be responsible ones.

The present crisis should be understood clearly. This crisis is part of the typical cyclical course of the developed capitalist economies. Now, however, it has acquired new complications and aggravating dimensions.

This is not the place for a theoretical analysis of the issue, yet it is obvious that certain basic observations must be made if we are to draw up a realistic and effective strategy in line with the circumstances.

These crises - the most severe faced in the cyclical evolution typical of capitalist development - date back to at least the second quarter of the 19th Century. In the course of time, they have tended to produce sharper, deeper and more generalised interruptions of the economic upsurge with world-wide effects.

In the mid-1990s, when globalisation was extending around the planet, the United States achieved the most spectacular accumulation of wealth and power ever seen in history. As the absolute master of the international financial institutions and through its immense political, military and technological strength, it was able to do so.

The world and the capitalist society were entering an entirely new phase. Only an insignificant part of economic operations related to world production and trade. Every day, trillions of dollars were involved in speculative operations such as currency and stock speculations. Stock prices on United States exchanges were rising like foam, often no relation at all to actual profits and revenues of companies.

A number of myths were created: that there would never be another crisis and that the system could regulate itself. Capitalism had created the mechanism it needed to advance and grow unimpeded.

The creation of purely imaginary wealth reached such an extent that there were examples of stocks whose value increased a thousand times in a period of less than ten years. It was like an enormous balloon that supposedly could inflate toward infinity.

As this virtual wealth was created, it was also invested, spent and wasted. Historical experience was completely ignored. The world's population had quadrupled in only a hundred years. There were billions of human beings who neither participated in nor enjoyed this wealth in any way whatsoever. They supplied raw materials and cheap labour, but did not consume and could not be consumers.

They did not constitute a market. They were not part of the immense sea fed by the almost infinite river of products flowing, in the midst of fierce competition, from ever more productive factories that created ever fewer jobs, based in a privileged and highly limited group of industrialised countries.

An elementary analysis was sufficient to comprehend that this situation was unsustainable. Nobody seemed to realise that, apparently, insignificant occurrences in the economy of one region of the world could shake the entire structure of the world economy.

The architects, specialists and administrators of the new international economic order - economists and politicians - now look on as their fantasy falls to pieces, yet they barely understand that they have lost control of events. Other forces are in control: on the one hand, those of the large, increasingly powerful and independent trans-nationals and, on the other, the stubborn realities that are waiting for the world to truly change.

There is no doubt, this crisis is a consequence of the resounding and irreversible failure of an economic and political conception imposed on the world: neo-liberalism and neo-liberal globalisation.

The economic crisis also means the aggravation of major problems that are far from being solved: poverty, hunger and disease, which kill tens of millions of people in the world every year; illiteracy; lack of education; unemployment; the exploitation of millions of children through child labour and prostitution; money laundering; lack of drinking water and a scarcity of housing, hospitals, communications, schools and educational facilities. Fundamental rights of all human beings are affected.

The crisis will have a special negative impact on the struggle for sustainable development; the preservation of the environment and the protection of nature from the merciless destruction it is being subjected to and which is causing the poisoning of water and the atmosphere; the destruction of ozone layer; deforestation and so on and so forth.

There are nations that could be annihilated if this economic crisis is not resolutely confronted. Now is the time, more than ever before, when cooperation among all countries is needed.

We are saying all these things to help our politicians and our people understand that this economic crisis that is being expressed in the frighteningly very high depreciation of the kwacha, fast-rising interest rates, extremely low copper prices which have rendered almost all our mines technically bankrupt or insolvent, the increasing job losses is a portrait of the distressing difficulties we are facing today.

The effects of this crisis are being transmitted in a very dramatic way, worsening our already precarious situation characterised by poor development of our productive forces and the deformation of our socioeconomic structures.

For our people, the present crisis has meant the almost complete ruin of their economies; the dashing of their hopes for improvement - in short, a prospect of hunger, poverty and disease for a painfully growing proportion of our impoverished people.

In recent years, it has been possible to note, first of all, our subordination to the general trends in the developed capitalist world, which passes on the effects of their crisis to us. The crisis is expressed in all its severity in the indicators related to our foreign economic relations.

They clearly show how the negative effects of the cycle are passed on to us. And if there will be no immediate significant improvement in the international economic situation, the clear possibility of a regression in our weak countries cannot be excluded.

However, what is extremely worrying is the poor attitude and apparent lack of capacity on the part of those in charge of the management or administration of the affairs of our country. For them, it seems it's business as usual and things will sort themselves out. They seem to believe that someone in America, Europe or Asia will sort out things and eventually everything will return to normal, without them doing anything. And this may explain why in the midst of such a gigantic crisis, Rupiah Banda says he is happy to increase his own salary and those of his ministers and other politicians and top government officials.

If he really understood the situation and cared about it, he wouldn't be speaking that type of language and would be very sad to have assented to that bill that increased those salaries.

Let our people not be cheated by anyone that the current downturn will quickly adjust itself as we move away from the uncertainties of last month's presidential election.

This crisis is far much bigger than our presidential election and is not a simple, temporary phenomenon; it may last much longer and with devastating effects on our people. We seriously need a survival plan. But Rupiah and his friends don't seem to realise this. All they seem concerned about are their personal benefits - salaries, allowances, cars, houses and offices.

There is need for serious discourse in the nation about this crisis. We need to find ways of surviving or mitigating its worst effects. We also need to reflect on the nature of our economic development and how far it should be based on a speculative capital that is continually in-flight and changes course any time depending on the weather.

This has exposed us to the fact that running an economy needs much more than just making nice statements inviting foreign investors to come and develop our country. Things don't work that way, at least not in the world we today live in.

We have to think for ourselves because no one will think for us; we need to see things for ourselves; we need to act and speak for ourselves because nobody will effectively do so for us. We need to analyse things for ourselves and find our own solutions or formulas. That's the only way we can hope for a meaningful reversal of fortunes.

Labels: RECESSION

posted by MrK @ 10:40 AM