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5 June 2013 | | |

The model continues…although there is a way out

Economist Claudio Katz: the structure of Latin American economy, the crisis in central countries, submission and possible answers

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Without meaning to ignore or minimize some signals of change that currently exist in Latin America and the Caribbean, such as public redistribution policies and the recovery of state sovereignty, the hegemonic model continues being extractivist and primarizing economies, which continue being peripheral, while the US does not put an end to their geopolitical and economic domination attempts in dispute with other imperial powers.

This is what economist Claudio Katz said in his intervention during the recent Continental Assembly of Social Movements towards ALBA held in Guararema, Sao Paulo, Brazil, in mid May.

Katz is from Argentina and he started his presentation making reference to the fact that the continent suffered a significantly lower impact of the crisis or what he referred to as the “global earthquake” whose epicenter were European and US economies.
Nowadays, we are being witnesses of a “valuation of exports of the region” which has allowed to implement “aid policies” although he expressed “we don´t know how long it will last”, since this scenario can “be abruptly modified”.

The center of Latin American economy is the “agroexport of new and more specialized products integrated to the global market which leads to the displacement of peasants from their lands and the concentration of rural ownership”, said Katz.
In this way, he highlighted a matrix of “extractivism” whose main expression is mining, and “industrial sweatshops schemes” which “increasingly separate Latin America with the industrialization of Asian countries”.

Tourism and its increasing influence on economies and remittances as a symbol of forced migration suffered by our unemployed population "also occupy a significant place today”, he said.

“Let´s be honest: the Latin American economy maintains its old peripheral or semiperipheral insertion in the international division of work”, said Katz on the first day of debates at the National Florestan Fernandez School, which is made possible by very fragile structures that worsen informality or the precarization of employment.
In Katz´s opinion, “the new image of the World Bank of Latin America as a paradise for the middle class to rise is completely false” since it ignores the persistent inequality through “distorted estimations”.

On the contrary, we can see how the old national bourgeoisies are turning into new local bourgeoisies more associated to foreign capital, richer, with benefits of the new groups of transnational companies and which “continue to use states as instruments for their businesses” through privatizations and regulations.

Katz also pointed out that contrary to the supposed “lack of interest” of the US on Latin America and the Caribbean, we can observe that Washington is “adamant in dominating our region again” through “structural dominance via free trade bilateral agreements and a new Alliance of the Pacific”.

Katz talked about two responses to this: on the one side the submission for instance by Mexico and on the other, a second type of reaction that aims to certain degree of autonomy and that is identified with experiences such as Unasur or Mercosur.
But he also makes reference to the fact that this is a “limited autonomy” which in the case of Brazil includes an “hegemonic coordination” with the US.

With reference to this, Katz said that economic measures are necessary to break with the continuity of the model and highlighted that this is the moment to implement them, putting ALBA countries at the first level of responsibility. “This is the moment to provide these answers and follow this path, to act in a strong way to protect our economies and our peoples”.

The measures required “now” to advance on regional integration and protect the populations from the global crisis “are there, but are not applied or developed”, he regretted. Some of them exist only in formal terms, such as the case of a common currency for trade (Sucre) or the Bank of the South. He also said that we need effective measures to control currencies and a nationalization of the financial systems in Latin American countries.

There are reserves amounting to 574 billion dollars in the continent today, said Katz. And if an integrator, productive and social project is not implemented, they will end up supporting the financial system of the central countries, the same system that has subjected the region through foreign debts.

"We can do so because ours is not a circumstantial project, we have a project and aspire to socialism, to a society where equality, democracy prevail and from there we can discuss, debate with all the fantasies that exist around the humanization of capitalism", he concluded.

(CC) 2013 Real World Radio


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