15 Mar, 2009

No Sign of A Pursuit of Accountability for the Global Financial Crisis

Imtiaz Muqbil

Originally Published: 15 March 2009

Probably the most shocking aspect of the current global financial crisis is the complete absence of any attempt by the political, economic and business leaders of Asia, and indeed the developing world, to seek accountability from those who caused it.

There can be no doubt that the developing countries are responsible for neither creating nor causing it, but are becoming serious victims of it. To seek accountability is well within their rights. Not to do so would be cowardice and apathy in the extreme.

Unlike the tsunami, SARS and bird flu, the financial crisis is a man-made problem. Unlike global warming, it is upon us now. Unlike terrorism, it is victimising innocent people across the far corners of the globe. To say that it was unexpected is an insult to the intelligence of the poor countries. As Musa Hitam, chairman of the World Islamic Economic Forum said in Jakarta earlier this month, “Our gurus have failed us.”

Repeatedly, developing countries are bearing the brunt of problems created by the developed countries, and for our leaders to seek no accountability is an outrage.

Many geopolitical problems such as terrorism have their roots in lingering territorial disputes dating back to the colonial era. Global warming is the result of decades of profligate consumption of fossil fuels by the industrialised countries. The issue of agricultural subsidies being provided by developed countries to their farmers is directly responsible for the impasse in the World Trade Organisation talks.

Many of the companies now on their knees as a result of the crisis were once considered “too big to fall.” These include Ford, General Motors, Merrill Lynch, Lehman Brothers, AIG Insurance, and many more.

Yet, these companies were supposed to have set the standards of professionalism and productivity. Their fall has seriously damaged the credibility of the entire system that supported them.

Failing their own standards of accountability and transparency, the once invincible corporate behemoths were found to be riddled with the same cronyism, corruption and nepotism once thought to exist only in the developing countries. They begged for the same bailouts that were denied to Asian companies during the Asian economic crisis.

These crises are clearly unacceptable, especially when they are man-made. Without global geopolitical and economic stability, developing countries cannot plan their future.

This reluctance to demand accountability was on clear display at last month’s ASEAN business leaders summit. None of the so-called business leaders sought any explanation for the malfunctioning of the early warning systems supposed to have been set up in the aftermath of the 1997 Asian economic crisis.

They did not ask about the impact on global economies of the costs of the West’s wars and military adventures, especially in Afghanistan and Iraq. Nor did they query why were we in Asia told by the IMF and World Bank to let our insolvent companies collapse while Western companies are now getting bailouts.

Indeed, why are there no calls for accountability and transparency about the cronyism, corruption and nepotism within Western financial and business circles? What role have commodity speculators and brokers played in the recent wild gyrations in oil prices?

The crisis signals the end of the first chapter of the emerging New World Order. And the next chapter will require a more self-critical and honest assessment of past mistakes, including the pursuit of accountability, about which ASEAN secretary-general Dr Surin Pitsuwan made quite a big deal in his public statements to ASEAN civil society groups.

It is clear that the target date of 2015 set by world leaders at their 2000 turn-of-the-century U.N. millennium summit to eliminate global poverty and usher in a socio-cultural-environmental utopia will not be met. To salvage what’s left of that hapless target, the new solutions will need to be found, which in turn will mean discarding the discredited modus operandi of the past.

Indeed, it was at the ASEAN media summit that Indonesian editor Bambang Haryamurti recalled that each of ASEAN’s 10 countries, except Thailand, have been the victims of colonialism.

As the history of colonialism shows, the viewpoints of the people of the developing world often tend to be pooh-poohed until they can no longer be ignored. When the anger, frustration and bitterness mounts, and the backlash begins, the tide of history begins to turn.

Deep down, the financial crisis has begun to stir precisely such a backlash.

True, ASEAN has staved off the worst of the financial crisis by learning the lessons of the 1997 crisis, ensuring sound banking systems and adopting stringent fiscal policies.

ASEAN also made clear that the region’s future is interlinked and indeed interlocked with that of its populous neighbours India and China. Combined, this provides a demographic base of three billion consumers, mostly young people. Promoting more intra-regional trade and economic linkages is a given.

Similarly, the deadlock over the WTO talks is fuelling the rise of regionalism as part of this quest for self-reliance, independence and reduced exposure to the developed countries as sources of investment, trade and aid. Over-dependence on exports to the developed countries is also not healthy.

In Latin America and Africa, financial authorities are calling for accountability and transparency about the root causes of the financial crisis, as well an alternative global financial architecture. The mantra of “free trade” is being replaced with “free and fair trade.”

Perhaps the worst example of this “forget the past, focus on the future” attitude is the quiet burial of the lies told to the world about the non-existent “weapons of mass destruction” in Iraq, probably the most brazen lies in modern geopolitical history.

It is because the developing countries choose not confront these lies that they get no respect amongst their own peoples or on the world stage, and continue to fall victim to one false policy after another.

If this century is truly to be an Asian century, this is what will have to change. Accountability is, and must always remain, a two-way street.