Press Report Europe WSF 2009 - OpenFSM!

Solutions to the current crisis ranged from the global to the local, with many
participants emphasising the importance of a “toolkit” of solutions rather than
a single monolithic change.
• Across countless Forum events, environmentalists and labour
leaders alike called for a “green New Deal” based on massive public
investment in the environmental sector to stimulate job creation as
well as environmental preservation.
• For more than a decade, forum-goers have been pushing the idea of
Press Report Europe WSF 2009
the Tobin Tax - a tax on international currency transactions. Named
Participants called for massive public
after Nobel Laureate economist James Tobin, who first proposed the
investment in the environmental sector
idea in the 1970s, the funds collected from the tax (a fraction of 1%
of the transaction) would be used as a global fund for development, and for recovering from crises like today’s.
• The Bank of the South, launched in 2007 as a development bank by and for Latin America, was also touted as
an important ingredient in the toolkit of solutions to the global crisis. Giving the region more independence from
existing international financial institutions, the bank would also offer the region added insulation from global
shocks.
• “Food sovereignty” - a term adopted instead of the better-known notion of “food security” - was hailed by many
as a key step for developing nations to become more resilient to emerging food crises. By focusing less on
export-led agricultural policies and instead forging strategic local and regional agricultural policies, activists
argued, nations would be able to better meet the nutritional needs of their populations.
• Participatory budgeting - a programme for mass participation in municipal budget allocation - is another major
ingredient in the toolkit. It was pioneered in the 1990s in the Brazilian city of Porto Alegre where the Forum was
conceived but has spread across the world. This experiment emphasises the democratisation of financial
decision-making - giving every community access to and control over public banks.
Underlying much of the discussion was the sense that the current neoliberal economic model which privileges unbridled
competition between nations, companies and peoples is not a sustainable path for the future.
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Walden Bello is a university professor, senior analyst at Focus on the Global South, and president of the
Freedom from Debt Coalition.
Week after week, we see the global economy contracting at a pace worse than that predicted by the gloomiest analysts.
We are now, it is clear, in no ordinary recession but are headed for a global depression that could last for many years.
The origins of the present crisis lie in the strategies adopted by economic and political elites to resolve the crises of
stagflation - the coexistence of low growth with high inflation - which followed rapid growth in the post-World War II era,
both in the G8 economies and in the underdeveloped economies.
Stagflation, however, was but a symptom of a deeper problem: the reconstruction of Germany and Japan and the rapid
growth of industrialising economies like Brazil, Taiwan, and South Korea added tremendous new productive capacity and
increased global competition, while income inequality within countries and between countries limited the growth of
purchasing power and demand, thus eroding profitability.
Dilemma
This produced the dilemma of overproduction.
One “escape route” from the conundrum of overproduction, and for
maintaining and raising profitability, was “financialisation”.
With investment in industry and agriculture yielding low profits as a result of
over-capacity, large amounts of surplus funds have been circulating in or
invested and reinvested in the financial sector - that is, the financial sector
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Overproduction: many cars made, but no-