There
are worrisome signs of a rapid decay of the global economic architecture
such
as the ploys and gimmicks being resorted to by various states such as "bail ins"
of banks with depositors's funds -- as in the recent case of Cyprus which was
highlighted by the Kazakh President in his opening speech and other such
desperate steps that are described by French economist Christophe Poitou in his
2013 book Totalitarisme Economique as
"export of inflation, fiscal extortion, stretching the maturity date of bonds, manipulation
of exchange rates and --perhaps worst of all -- negative interest rates on
deposits" (which destroy savings through inflation).
The
sorry state of affairs was alluded to, though obviously not in such details by
the former Director of the IMF, Dominique Strauss Kahn who chastised the EU's
"unemployment policy" and its refusal to undertake large infrastructural
projects that could boost the economy and provide large-scale employment. That
assessment made him a pessimist on the future of the Euro-Zone.
Many
see a contradiction between the real problem caused by ballooning state and
private debt and the call for vast public investments in the aforesaid massive
projects. However the issuance of public credit is an alternative to the
generation of debt to private banks through their emission of speculative
instruments. Instead of printing ever larger amounts of fiat currency to be lent at almost no interest to banks and large
corporations which lend it back to states at an interest or use it to buy back
their own shares in order to artificially raise their market value, states
could emit long-term credit instruments specifically tailored to directly
finance priority schemes mainly in the areas of transportation, land and
resource management, telecommunications, environmental restoration, development
of new technologies and generally engineer a "transition to
a
new, green civilization" in the terms used at the Forum.
This
approach was advocated and described in economically precise terms in one of
the panels of the Forum, dedicated to the Transeurasian Corridor of Development
RAZVTIE ("holistic development" in Russian) which chose a provocative theme for
its deliberation: Can Russia and Kazakhstan help draw Europe out of the
Crisis?. The proposal is in fact to coordinate through the existing and
growing Long-Term Institutional Investors Club (LTIC) a number of pan-Eurasian
initiatives, embracing the continent, from
The
Resolution adopted by the Razvitie Panel reads as follows:
"Can
Participants of the panel session at the VI Astana Economic Forum in
continuation with the ideas discussed at the Strategic Scenario Sessions in
Milano (Bocconi University, November 2012), in Astana (V Astana Economic Forum,
May 2012), in Modena (Modena, July 2008) express their commitment to pursue the
common endeavours to elaborate the conceptual and practical means for the
Development (Razvitie) paradigm. This Development (Razvitie) paradigm can
ensure the shift from the currently dominant approach underlying the collapsing
world financial system, that is connected with a primitive linearity in
the concept of growth and financialization of world economy.
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