The Russian government has a reason to be quite happy. The oil price has reached this winter $41-42 for a barrel, which is half the price written in Russia’s 2009 budget, but which is better than $25-30 for a barrel that the oil market sought to fix in the autumn. It is not a surprise: oil prices have a tendency to come up in winter since it is cold in the northern hemisphere and the fuel demand is growing.
While the financial crisis and its consequences are spreading around the world and even the most erstwhile ‘free market’ governments are discussing how to re-regulate the financial sector, bilateral and regional ‘free trade’ agreements continue extreme deregulation of the financial industry.
Since the current financial crisis started, none of the governments, experts or media who have called for new regulations for the financial industry have taken into account rules of the World Trade Organisation (WTO) which actually impose extreme financial service deregulation on many WTO member countries.
I must confess – the term used by me in the title of the article is not mine. It is young economist Vasily Koltashov who invented it. But we work together at the same Institute and have similar ideas.
Anyway, let’s turn to the essence of this phenomenon. It is quite simple – during the economic crisis all states try to protect their domestic markets. But they are not bold enough to impose administrative measures for this, and a sharp rise of import tariffs is against the WTO rules. Moreover, the liberal ideology blames such actions.
An international financial architecture will be new if it is aimed at strengthening their members’ capacity to plan and manage sustainably their own endogenous, democratic and sustainable socioeconomic and human development.
There has been a long, silent monetary coup d’état that has transferred value away from labour into the hands of capital, but the current crisis offers a window of opportunity for transforming the economy.
Economic and political elites are converging on Global Social Democracy as a solution to the current economic crisis. But we need more than social management, argues Walden Bello: we should aspire to paradigms of social organisation that aim for equality and participatory democratic control of both national and global economy.
Not surprisingly, the swift unraveling of the global economy combined with the ascent to the U.S. presidency of an African-American liberal has left millions anticipating that the world is on the threshold of a new era.