Summit for a New Global Financial Pact

An illustration of the North-South ideological divide

Jun 30, 2023

Cuban President Miguel Díaz-Canel addressed on June 22, 2023, the Summit for a New Global Financing Pact, held in Paris, France. He spoke from the vantage point of the global South; in that Cuba this year has been elected to serve as Chair of the G-77 and China. He expressed the hope that the Summit would be “a new starting point towards a more comprehensive intergovernmental discussion and decision-making process within the framework of the United Nations.”

Díaz-Canel condemned the current international economic and financial order.

“I will not be disclosing any secret if I affirm that the most nefarious consequences of the current international economic and financial order, which is profoundly unjust, antidemocratic, speculative, and exclusionary, are affecting especially the developing nations. . . . Our peoples neither can nor should continue being the laboratory for colonial formulas and renewed forms of domination that use the debt, the current international financial architecture, and unilateral coercive measures to perpetuate underdevelopment and add to the coffers of a few at the expense of the South. A new and more just international order is the utmost urgency.”

The Cuban President declared that the current financial institutions are obsolete, having been developed in the context of the Cold War, in a world situation entirely different from that of today. Moreover, they were “conceived to profit from the reserves of the South” and “to replicate a modern scheme of colonialism.” The perpetuation of such institutions before the challenges of today’s world is unacceptable.

Díaz-Canel maintained that it is necessary to reform international financial institutions, with respect to both their structures of financing and their undemocratic forms of governance. There must be a rapid and profound recapitalization of multilateral development banks, so that they will be able to improve loan terms in order to satisfy the financial needs of the South. Said reform ought to be a dimension of a redefinition of North-South relations.

Díaz-Canel concluded: “Let us not go down in history as the leaders that could have made the difference in our common destiny and were unable to do so. Let us not ignore the warnings; let us not underestimate the urgency. Let us act with a sense of an endangered species. Let us act with a sense of humanity.”

The Summit was called by French President Emmanuel Macron with the intention of focusing world political attention on the injustices and inequity of the current global financial architecture, according to Celia Belin and Laurianne Divoize of the European Council on Foreign Relations. The goal of the Summit is to find ways to build a more inclusive and equitable financial system that enables addressing issues of climate change and biodiversity without undermining the economic development of the developing countries. The Summit organizers hope that it can stimulate a global political will that would have consequences for upcoming international meetings.

Belin and Divoize note that Macron has been repeatedly speaking of the need to address the concerns of the global South, and he has called a number of summits to this end. He has argued for a new approach that would replace the market-oriented Washington consensus with a global financial architecture that would provide incentives for investment in sustainable economic development goals.

Belin and Divoize note that most Western leaders have only tepidly supported the initiative; and against this tendency, Belin and Divoize call for greater Western support for Macron’s project. Reform of the Bretton Woods institutions, they maintain, is necessary to increase the credibility of the West before the countries of the South, thus escaping from the limbo of multilateralism. They thus are embracing a reform from above to prevent a more fundamental structural change driven by the voices from below, which are actively engaged in the construction of an alternative world order characterized by mutually beneficial trade and pluripolarity.

The reformist proposal of Belin and Divoize is way past its time. The end of World War II was the time for a possible reform of the world order from above. That historic moment, defined by the hegemony of the United States and the final drive of the movements of the colonized peoples of Asia and Africa for independence from European colonial rule, was the time for a gradual and necessary transition to a more just world order, driven from above by the nations that had been made wealthy and powerful by the structures of a world order built for four centuries on a colonial foundation. Instead, the Western powers developed a new form of colonialism, with the Bretton Woods institutions providing the financial architecture for a neocolonial world order.

Since 1980, with apprehensions driven by visible signs of the unsustainability of the world order, the Western powers have become even more aggressive in defending their particular interests at the expense of the majority. With Western credibility long since undermined, the nations of the global south today are constructing in theory and practice a more equal, pluripolar world order, with countries like China and Cuba playing a leading role. (See “China and Cuba: Vanguard nations in the construction of a more just world order,” May 19, 2023). The responsible road for the Western powers today is participation in the emerging world order driven from below, seeking to develop mutually beneficial relations with other nations, casting aside the imperialist policies that have guided them to this day, which have led humanity to the abyss.

Standing in line with the seven-decades-too-late project of reform from above, U.S. Secretary of the Treasury Janet L. Yellen offered no apologies for the aggressive attacks on the sovereignty of the nations by the world’s declining imperialist power. Acting as though the once great superpower has been a liberal reformer all along, she promised that the U.S. government will continue to work with multilateral development banks to make available between $50 and $200 billion dollars in increased lending capacity, which could be utilized for investment in pressing problems, such as climate change, lifting people out of poverty, and preparing for future pandemics. She noted that she is encouraged that efforts are being made to address the most outstanding debt cases, and that China is moving to address the debt challenges facing developing countries. Furthermore, she observed that the USA is working through the G7 to mobilize $600 billion dollars for infrastructure investment during the next five years.

One would think that the current occupant of the office once held by Alexander Hamilton has no notion of the clamor that her nation’s foreign policies of the last seven decades have provoked. It was a pathetic discourse.

Following the Summit, in an interchange with Cuban diplomats serving in diplomatic missions in France and in UNESCO, Cuban President Díaz-Canel characterized the Summit as “interesting” and as a “complicated event.” He noted that the discourse of Cuba at the Summit, in representation of G77 plus China, was a dividing of the waters, and it was followed by good interventions by Brazilian President Luiz Inácio Lula da Silva, South African President Cyril Ramaphosa, and Kenyan head of state William Ruto. These discourses from the left were pronounced in the presence of the world financial and banking elite, seated alongside the representatives of the poor countries. The representatives of the elite made promises, as though all the world recognizes that one must obtain funds for development, but who is going pay for it, Díaz-Canel asked. Are the rich going to put up the money?

Díaz-Canel noted that we already have experience with this. The world must be changed, but how are we going to change it, and what ought to be done to change it? The Cuban President observed that French President Macron asked the same questions, and the response that was given to him was that we cannot eliminate everything that exists, we cannot eliminate the International Monetary Fund, the World Bank, and the financial institutions.

Díaz-Canel declared that for him it is clear that as long as there is capitalism, the countries of the Third World do not have the possibility to do what needs to be done to resolve these problems.

Knowledge, ideology, and real socialism in our times

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