The 6th Astana Forum in Kazakhstan from the 22nd to the 24th of May 2013 was held together with the World Anti-Crisis Conference (WACC) under the auspices of UN. A number of Nobel Prize Laureates and statesmen gathered to thrash out strategies to move out of the enduring economic crisis. One of the most original initiatives was the plan for a Transeurasian Development Corridor (RAZVITIE)as a catalyst for a new economic model.

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THE SIXTH ASTANA FORUM

A BRIEF REVIEW

From the 22^nd to the 24^th of may 2013, the Astana Forum was convened for the sixth time in Kazakhstan's sparkling new capital, built in the geographic centre of Eurasia as its very name (from Sanskrit sthana, Persian istan) suggests.

As in previous occasions, numbers were impressive; it attracted more than twelve thousand registered participants from one hundred and thirty nations, including  ten Nobel Laureates and three dozen serving and former heads of state and government. The annual Forum is an outcome of the Eurasian Economic Club of Scientists created by Kazakhstan's President Nazarbayev and it combined this year with the World Anti-Crisis Conference (WACC). The permanent movement that supports those various operations and provides feedback year-round is the G-GLOBAL, an Internet platform that has drawn, according to its administrators more than twenty five million visitors from 150 countries, many of whom provided input to its deliberations and submissions. The vision of the Kazakh leaders in setting up the G-GLOBAL was to associate as many citizens as possible to the debate on the economic situation and the desirable changes, as opposite to the exclusive high power clubs known as G-7 or even G-20. It won the support of no less than fourteen Nobel Prize winners, including Robert Mundell and John Nash (of the film A Beautiful Mind fame).

As can be expected from a wide-ranging international debate many positions and proposals are at cross purposes when they are intended to support mainly one nation's or region's economy. Thus Robert Mundell, formerly a herald of free trade told Forbes columnist Eamonn Fingleton that he now favours a policy of protectionism in the USA whose economy is far too open to be sustainable, given that manufacturing now represents only 11% of the American GDP while its current account deficit is always well above 3%; though Mundell does not advocate tariffs which invite retaliation, he supports a "Buy American" policy which naturally would be reflected in similar measures in the countries that don't already have them in place. Japan for one adheres rigorously to its mercantilist faith by keeping its market relatively closed and generating huge trade surpluses in spite of its other internal problems. However is it still possible for the largely de-industrialised USA to revive its manufacturing sector in the face of fierce global competition, especially if Washington wishes to preserve its global empire while protecting the profits of its financial oligarchy? It stands to reason that when manufacturing is abandoned, the associated engineering and scientific know-how also fade and various authoritative reports suggest that American companies have lost the ability to operate or even understand many of the technologies which they rely upon but have outsourced to foreign businesses. The USA are still protectionistic where they can be, but reversing the trend their leadership initiated almost half a century ago may prove exceedingly difficult, particularly in the absence of a unanimous national will.

The officials from dominant western countries are bound to hold the Party Line that globalization's effects are "globally positive" for their own societies and for the world at large but that dogma is fast losing credibility in view of the persistent and spreading crisis which is leading to their rapid decline. The new book by Paul Craig Roberts, President Reagan's former Treasury Under-Secretary, The Failure of Laissez Faire Capitalism and the Economic Destruction of the West (2013), prefaced by Michael Hudson, another perspicacious economist, talks of a "political and economic race to the bottom". Both agree that so-called globalism may be regarded as "a conspiracy against First World jobs" and the resulting impoverishment is turning the USA and its allies into failed or pseudo-democracies which are increasingly behaving as police-state oligarchies. Craig Roberts, never once to mince his words, highlights that Washington serves "the interest groups that control it and which are committed to financial  fraud, disinformation and war". The governments of Russia, China, Kazakhstan, Brazil and other "challenger" states are quite aware of those views, echoed by many of their own top economists and are not willing to take the siren songs of OECD policy-makers and diplomats at face value.

The Astana Forum of this year issued a Declaration (text attached in annex) and the WACC drafted an Anti-Crisis Plan which has many components but which emphasizes primarily the need to reach a "sound integration of the three Es: Economic, Environmental and Ethical measures to combat the crisis and promote prosperity and true development, as opposed to mere growth. Special emphasis was placed on the need to adopt and promote new, non-polluting, carbon-neutral and renewable energy sources as far as possible.

Both the Declaration and the Anti-Crisis Plan are to be presented to the G-20 summit to be held in Saint Petersburg, chaired by Russia on the 5^th and 6^th of September. Russia which is a partner of Kazakhstan in the Eurasian Economic Community (EURASEC), the Shanghai Cooperation Organisation (SCO) and the Community of Independent States (CIS) among other regional coordinating bodies participated actively in the preparation of both the Plan and the Declaration and is expected to support them, especially since the Kremlin wishes to see the leading economies step away from both the profligate creation of consumer debt and trade deficits and the stifling austerity policies practiced on both shores of the Atlantic. Whereas the Russian and Kazakh Governments see the global crisis as an ongoing and worsening process which is likely to lead to a collapse of the international economic system in the coming few years, the USA and the European Union are unwilling to address the real problems and prefer to proclaim their belief that the crisis is over and that a slow recovery is underway, despite plentiful evidence to the contrary.

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). Poitou writes that a global collapse was due to happen in 2009-10 but was prevented or rather postponed through a combination of those stop-gap measures. He gives as an example the notorious and morally illegitimate recourse to using the citizens' life insurance policy funds in France for the purpose of rescuing troubled "too big to fail" banks and corporations and estimates that this de facto misuse currently amounts to some hundred billion Euros.

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 Lisbon to Vladivostok and from Norway to Indonesia.

China for one has taken the lead in such a global initiative by engaging in hundreds of massive infrastructure projects at home but also in Central and South East Asia, West Asia, Africa and  Latin America. By 2020, the Chinese Foreign Direct Investment is expected to range between one and two trillion in US Dollar equivalent value, much of it in the construction roads, railways, power plants of various types, dams, new cities and agricultural ventures. If a similar strategy can be implemented cooperatively by long term investment institutions backed by several governments, not to the primary benefit of one country which is under suspicion of harbouring imperial ambitions, but multi-laterally for global welfare and prosperity, many major problems of mankind linked with sanitation, pollution, irrigation, energy generation, food and drinking water supplies and education could find their solution.

The Resolution adopted by the Razvitie Panel reads as follows:

"Can Russia and Kazakhstan draw the European union out of the ongoing economic crisis and recession?", VI Astana Economic Forum  

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.

The new paradigm should be based on the three main pillars: ethos, knowledge and space within which to operate.

The main idea for practical implementation of the Razvitie approach is connected with the initiative  of the Trans-Eurasian belt of Development. The Trans-Eurasian belt of Development can become the new engine for producing physical material wealth on a planetary scale, thus drastically decreasing the unemployment rate.

The Trans-Eurasian belt of development is connected with construction of multi-infrastructure (railroads,electricity grids,water transportation system, telecommunication system and also new settlements).This project of Trans-Eurasian belt of development can be realized only through cooperation among nations:  Russia, European Union, Kazakhstan, China.  

New financial instruments of long-term investment need to be designed so as to initiate and realize such a program. This program is regarded as a new integration platform to spur development, integration of knowledge and give impetus to the creation of new institutions for the infrastructure projects.

 
The Trans-Eurasian belt of development as Razvitie (Development) initiative is in sensitive resonance with the trend for infrastructure and social-cultural development in Latin America, South-East Asia and Africa.

Implementation of Razvitie (Development) approach requires a new value system that could be revealed and realised  only on the basis of scientific, technological and social-cultural development (urban, educational, cultural) and the disclosure and implementation of breakthrough energy technologies (BET).

Participants of the panel session suggest to initiate a new international integration platform Razvitie together with the international network of Razvitie university.
   Participants of the panel session:

Yury Gromyko, Russia
Paolo Raimondi, Italy
Mikhail Baydakov, Russia
Come Carpentier, France/India
Lorenzo Carrasco, Mexico/Brazil
Eamonn Fingleton, Ireland/Japan
Gian Guido Folloni, Italy
Henry C. K. Liu, Hong Kong
Victor Popov, Russia
Edoardo Reviglio, Italy
Victor Zyukov, Russia

World Anti-Crisis Conference

22-24 May, Astana, Kazakhstan

Astana Declaration

United Nations General Assembly resolution 67/197 "International financial system and development"

"The General Assembly notes the initiative of the Government of Kazakhstan to host an international conference in Astana from 22 to 24 May 2013, entitled "World Anti-Crisis Conference: effective countermeasures to global uncertainty and economic downturns"

The Astana Declaration

World Anti-Crisis Conference

Preamble

The Global Economy is currently facing a major set of new challenges, and remains under considerable distress amid continued concerns about sovereign debt sustainability and financial system fragilities. The uncertainty stemming from the euro crisis and questions regarding the effectiveness of certain policy measures, such as the rounds of quantitative easing, underpin growing unease about the quality and strength of the current recovery and future economic growth and financial stability.

Persistently low growth in the leading nations implies prolonged stress in the global financial system and advanced economies. Indeed, the knock-on effects on growth, employment, income distribution, poverty and social cohesion have been profound and deep despite various policy measures in place. The umbrella term "global crisis", however, conceals a great deal of heterogeneity. The crisis did not occur everywhere: some countries were at the epicenter, while others merely felt its spillover effects.

Wherever one stands on the origin of the crisis, the model of debt-driven, highly leveraged growth appears unsustainable. This is the most challenging task we face: how to achieve and maintain inclusive, sustainable, and balanced growth through greater international cooperation, trade, and investments, while ensuring global and national financial system stability, minimizing vulnerability to exogenous shocks and internal credit bubbles, through appropriate, open, integrated, transparent, predictable, and responsible regulation, oversight, and systemic risk management. This is the task we set forth for our Anti-crisis conference.

The Anti-Crisis Conference highlighted the considerable challenges facing the international community. We, the conference participants, stressed significant shortcomings to address the on-going crises in the Eurozone, U.S. and other advanced economies, which undermine stability and growth of the global economy. Weak global economic governance was seen as a major obstacle to more effective international crisis resolution. At the same time, the increasing importance of emerging local currency markets was seen to represent a critical source of future growth and stability of the international economy, but concerns were raised that integration remains incomplete. The orderly integration of major emerging markets' currencies and financial assets into international capital markets was considered to represent one of the most important international economic developments over the medium term.

On adjustment in the Eurozone, we remain concerned that substantial policy efforts and considerable institutional adjustments have not led to an expected recovery. The Eurozone suffers a fundamental confidence crisis that risks undermining the foundations of the European project itself. Mounting inter-Eurozone economic divergence raises doubts about the effectiveness of common economic policies while uncertainty remains what alternative policies would be feasible in the current international economic environment. Policies need to be sought that restore confidence in the viability of the Eurozone.

On monetary policy and financial stability, we urge clarification on the sustainability and possible adverse consequences of current unprecedented monetary expansion of key international currencies. This is seen as critical to ensure that the measures translate into a robust recovery in affected countries. Clarity is also needed on possible exchange rate effects the measures produce and whether greater cooperation is required to avert disorderly exchange rate adjustments. We also seek a reassessment of whether financial restructuring has been sufficient to establish greater financial stability.

On global capital markets, we see that capital markets remain disproportionately dominated by a relatively narrow set of financial assets. The increasing integration of emerging markets into international currencies and capital markets is seen as essential to bring greater stability and broaden the financial resources of the international economy. We urge to support measures to bring about a true globalisation of currencies and capital markets.

On the new global financial architecture, we emphasise that existing institutional arrangements need to be reassessed as to whether they remain sufficient and sufficiently adaptable to support effectively international cooperation.

On the new realities of the global economy, we stressed that proper understanding is required of the permanent effects of high levels of indebtedness, demographics and the expansion of China and emerging markets on markets and the global policy environment.

On the fragmentation and divergence in the global economy, we urge clarification on the advantages and disadvantages of financial markets disintermediation and inter-country economic performance differences.

In order to prevent the future recurrence of such devastating crises, and better insulate populations and economies from the adverse consequences thereof, the Government of the Republic of Kazakhstan through the World Anti-Crisis Conference has proposed to the United Nations a Declaration of Anti-Crisis measures and policies. The World Anti-Crisis Conference is held on the level of ministers of finance, economy, Central bank governors and official representatives of United Nations Member States and international experts. The main outcome of the conference is current declaration and possible guidelines for the draft World Anti-Crisis Plan to be considered at the II World Anti-Crisis Conference in May 2014.

The Declaration involves measures which would potentially help all nations to better cope and respond to future economic crises. Under the auspices of the United Nations, a multilateral approach to crises prevention and invigoration of growth is proposed under the following measures:

The Declaration

We the Nations of the World:

1. Global economic governance: We would seek a review to assess of whether current institutional and governance structures remain condusive to conduct effective international economic policy coordination, cooperation and dialogue. An action plan for relevant reforms should be approved and implemented in the short term.

2. Adjustment in the Eurozone: We would welcome a reassessment of whether there are credible alternative policy options that would produce less disruptive adjustment in the most affected Eurozone countries. Fiscal consolidation and austerity measures in the long term can erode the growth potential and bring an array of negative consequences. Hence disciplinary measures are part of a stabilization/recovery menu. Measures that promote growth with fiscal responsibility should therefore be examined and adopted.

3. New macroeconomic realities: We commit to the development and maintenance of long-term sustainable, inclusive and balanced growth through closer international cooperation, with growing participation of emerging and developing market economies as a reflection of new global realities, in order to eradicate poverty and continue to reduce global and domestic income inequalities.

4. We commit to the correction of global and domestic savings-investment imbalances, through more productive and equitable use of capital, and increased diversification of reserve assets.

5. We pledge to build and enhance crisis prevention mechanisms through adequate reserve funds and policy tools. It is therefore imperative to strengthen the existing global network designed to provide financial protection to countries that seek IMF resources in times of economic distress.

6. Global capital markets integration: We would study measures to construct a road map of a transition framework to allow for the orderly integration of major emerging markets' currencies and financial assets to establish the true globalisation of currencies and capital market.

7. We affirm our commitment to the long-term stability and growth of local and global financial systems, with greater international integration supported by robust local market infrastructure, clear and adequate regulation and oversight that incorporates both the banking system and shadow banking, and flexible, transparent tools and mechanisms for the appropriate monitoring and management of systemic risks.

8. We pledge to foster collaborative scientific research and development to find innovative, long-term solutions, including with regards to adaptation methods and practical applications in emerging and developing market economies. 

9. We acknowledge the urgent need for new, "greener" economic practices in light of the enormous environmental challenges currently facing the world.

10.   A collective global commitment to promote the creation and support of national and regional programmes to eradicate hunger is of utmost importance. Education as a basic human need has a crucial role in personal development and socio-economic growth. Its function as a predictable and long-term driver of higher quality employment generation, with positive externalities further should benefit the common good.

11.   We commit to contribute to social inclusion and the reduction of social inequality by enhancing our social safety nets, ensuring and providing continuous safeguards for the welfare and well-being of our citizenry.

12.   We affirm that it is necessary to increase investments in global agricultural production and social protection of population, including programs assisting poor people to gain access to food, as well as to review the existing policies of some countries that encourage the alternative use of crops. In this case, developing countries should scale up the agricultural production. Developed countries may help developing countries in meeting their needs for agricultural products.

13.   We recognize the work undertaken by the Ad Hoc Open-ended Working Group of the United Nations General Assembly to follow up on the issues contained in the Outcome of the Conference on the World Financial and Economic Crisis and Its Impact on Development, and invite the Ad Hoc Open-ended Working Group to take into account, as appropriate, in its possible further deliberations the issues contained in the present document.

14.   We encourage and invite all member states of the United Nations to participate in the II World Anti-Crisis Conference in May 2014 in Astana, which main result will be the draft of the World Anti-crisis plan for the United Nations.