To Avoid A Rerun Of The Foreclosure Prompted Crisis An Overhauling Of The System Itself Is Required

April 9th, 2009

The G-20 summit avoided the crucial point that to avoid a rerun of the foreclosure prompted crisis an overhauling of the system itself is required. Instead it focused on how to keep the present system running and for this sought the help of emerging countries like India and China. This is the strong view of noted Egyptian economist Samir Amin. The group of about 5,000 or oligopolies who control the accumulated wealth of the world made the decision. The political leaders of G-20 dittoed it.

In the aftermath of the foreclosure debacle the financial corporations themselves put pressure on the government to interfere and ‘nationalize’ them. They wrote the entire foreclosure rescue-package and now they are in control of the funds.

The IMF is now talking about reform – this being essential for the changed circumstances. In the last decade many other countries – the emerging ones, cleared their debts and exited from it. Thus the IMF lost its reason for existence. Today talks are on to integrate the important emerging countries into the existing financial structure. By this they will contribute for their share of bringing back the system to its rails. But actually they should be taking advantage of this crisis to shift out of the tentacles of the system. Thus the G-20 members strutted about with much fanfare only to put their rubber stamp on decisions made by finance capital.

China toed the line because it wanted to avoid any political clash with the West in general and USA in particular. China is not part of the international monetary system and the decisions taken by it will be of little import to it. Pressure will be put on China to walk into the parlour but its leaders are unlikely to do so – it has repeatedly said this.

But the case of other countries like India is different. The latter is to a great extent part of the international financial system. Nevertheless it could have seized the opportunity to move out of the net but instead it did the opposite and kowtowed to the West overcome by the empty flattery of the latter. The political factor was of course there – the nuclear cooperation with America and the need to counter the rising power of China with US support. The choice has been of the ruling elite of India. Without India’s opposition the stage is a set for a re-run of the foreclosure type of crisis again and again.