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Peace in the Pacific: Aug. 13 draft statement

August 10, 2014
By

APEC 2013 summit in IndonesiaOn August 13, Secretary Kerry will travel from Honiara, Solomon Islands where he will meet government leaders and attend wreath laying ceremonies at the Guadalcanal American Memorial and Solomon Scouts and Coastwatchers Memorial. Later that day, he will depart for Honolulu, Hawaii to give remarks at the East-West Center.

How might Moana Nui engage Secretary Kerry?

Moana Nui draft statement for Peace in the Pacific

Until the deepening and accelerating conflicts between empires conclude, our Moana Nui should remain focused as a region of peace and neutrality. Our Oceania has never been able to assert our higher, moral strength during global conflicts, and the ambitions of peace and neutrality should be greater than the ambitions of regional economic partnerships or military integrations.

There are a lot of campaigns to focus on at the moment: the US support of Israel’s invasion of Gaza and the continued occupation of Palestine; the US support for the right-wing coup in Ukraine; the bombing and further militarization in Arbil, Iraq; and the ongoing militarization in the Pacific and Asia, including the conclusion of the 22-nation Rimpac exercise.

As difficult as it is to look past the personal traumas of these individual campaigns, we should ask why the U.S. is currently engaged in these destabilizing tensions. This article seeks to draw your attention to the financial and trade corner that the US–like a wily rat– is desperately trapped in, and outline the ambitions of US regional strategic economic partnerships.

According to former World Bank Chief Economist, Joseph Stiglitz, “I think it’s difficult for the United States to accept the notion it’s no longer the largest country. It’s no longer the largest country in trade, in savings, in other areas, but this will be the second-largest country in the world,” while BRICS has the ability to “create a fund that can bring in not only countries, but Sovereign wealth funds, to use not just debt but equity.”

As impossible as it may seem to anyone who has taken economics at a U.S. college since the 1980s, the neoliberal, free-market system is dying.  Wall St. investors cannot see that this system is dying because mostly, they have never known the fundamentals of how this system operated in the first place.

Blaming toxic loans for the economic crisis in 2008 may have been a salve to most, but what has not been given proper attention is the recent rise of BRICS, the economic partnership between Brazil, Russia, India, China and South Africa, and the international support it has received in the five-years since the 2008 Wall St. debacle.

The creation of BRICS and the New Development Bank deeply impacts the fundamentals of this system and brings sanity to investment and trade by rebuilding the multilateral Bretton Woods system before it was co-opted by the US via the 1948 Economic Cooperation Act. With the creation of a new international reserve process that will help to stabilize international trade away from the dollar and the US treasury, policy makers in neoliberal global markets must be beating down Obama’s doors demanding he “fix” this.

By looking only at stock exchanges, most would think that the US market is doing well, but we should never lose sight that the US debt-to-GDP percentage is over 106%, which means that we are in debt over $16 trillion. So at the moment, it’s investors who appear to be doing well because they are trading in a bubble of what must seem like infinite debt.

By itself, our debt-based economy has functioned because this debt was tied to investments and bonds in emerging markets and developing countries.  In other words, our debt was tied to bundles of various kinds of insurance, R&D investments, and privatization schemes in the mineral and mining of resource-rich commodities, in Big Ag, energy and manufacturing.

Now, since BRICS and the new Russia-China Strategic Economic Partnership (RCP) was signed last month, the game has officially changed and neither the US nor investors are prepared to diminish any access to these resources. (To be clear, I’m not suggesting that BRICS or RCP seeks to collapse the US/EU and would argue that they will do everything they can to keep the US economy from crashing, but the transnational investment regime is playing an all-or-nothing game and would go nuclear to perpetuate the neoliberal system. The fact that Obama and Kerry are exploiting every opportunity to contain BRICS is one thing, but to do so for the benefit of extractive and degrading industries and a dying financial system that perpetuates economic divisiveness in favor of the 1% is not just corrupt, but qualifies as “doing stupid stuff”).

I have written extensively about BRICS and its relationship to the TPP, here and here and even here, so I won’t reiterate the history other than to say that the moving of global resources from the US market to the BRICS market has created a situation where the US needs to use the consensus-building network of the WTO and the UN. If the TPP and TTIP does succeed, they may build enough consensus to create these new binding rules for investment and trade that will continue to give advantage to Wall St. style investments against the fraternally-minded BRICS-based State-owned Investment process.

When the BRICS released their Fortaleza Declaration just after the World Cup last month, it was a statement that went almost unnoticed in the US except for the interview with Stiglitz on Democracy Now (which I linked to above).  The statement was a call to end the neo-liberal investment regime by creating a New Development Bank,  an alternative to the Bretton Woods organizations (the IMF and the World Bank) I do not think that Amy Goodman fully appreciated the weight of Stiglitz’s statement, however, the show scheduled was on the Trans-Pacific Partnership and corporate tax dodgers.

Establishing a New Development Bank (NDB) that began with $100 billion capitalization of non-dollar based equity funds from BRICS may as well have been a declaration of war on Wall St. Germany who was going to capitalize an equivalent $100 billion into BRICS, postponed their commitment and was motivated to maintain their allegiance to the US/EU partnership just days after the controversial shooting down of Malaysian Airlines flt MH17 in the Ukraine. Germany went along with the sanctions.

Why this BRICS New Development Bank is important, is that BRICS countries are NOT included among the advanced economies represented by the 34 OECD countries (US, Japan, Canada, Australia, NZ, EU… economies). BRICS recently came out in support of the 132 G77 countries demanding reform over development and investment rules that US/OECD has been trying to control at both the United Nations Conference on Trade and Development (UNCTAD) and the 2015 Millennium Development Goals (MDG) and post-development agenda.

Although detractors of BRICS call this a new neo-colonial land grab, its an inaccurate misnomer, because these countries share a fraternal fight against colonialism. Also, the G77 (which includes BRICS) are the emerging markets and developing countries that both share in having a low GDP per capita, and are generally the exploited resource-rich countries that the OECD countries depend upon to create and trade debt.

To be fair, there are some exceptions as every country is unique and different and have varying indicators of economic health. However, as a simplistic description, I think few would take exception with calling Secretary Kerry out, and insist that exploiting, destabilizing and militarizing regions globally, will not resuscitate the gasping last breath of neoliberalism. International financial and trade reform must occur in genuine partnership with the G77 and Indigenous and Ecological Rights, even if it means the cake-eaters of the 1% goes the way of Marie Antoinette.

 

 

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