Beyond the crisis : ovethrowing the discredited development

model

Arnaud Zacharie (CNCD – Belgium)

Majors problems to resolve• International capital flows liberalisation, financial

instability and « bubble economy »• Global imbalances, exchange rates instability and

reserve accumulation by developing countries• Global competition, social dumping and loss of

the part of wages in GDP• Unsustainable growth model, CO2 emissions and

climate change• Global economy, national policies and lack of

global governance

South-North financing

Alternatives

• Capital control mechanisms (ex. : « encaje »)• Addressing capital flight (tax havens)• Domestic savings mobilisation• Progressive taxation system• Debt cancellation

Global imbalances

-800

-600

-400

-200

0

200

400

600

800

1000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Economies en voie dedéveloppement

Economies en transition

Economies développées

Reserve accumulation inReserve accumulation in t the Southhe South

Source: IMF, International Financial Statistics, and IMF staff calculations

Reserve accumulation in the world

0%

20%

40%

60%

80%

100%19

93

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Economies développées

Economies en transition

Economies en voie dedéveloppement

Alternatives

• New global reserve system and exchange rates stabilisation (ex. : new type of SDR)

• Regional reserve systems (ex. : Chiang Mai initiative)

• Regional currency systems

Social dumping and wage share in the South

Social dumping and wage share in the North

Evolution de la part des salaires dans la richesse créée par l'ensemble de l'économie

50,0%

52,0%

54,0%

56,0%

58,0%

60,0%

62,0%

64,0%

66,0%

68,0%

70,0%

France Union européenne G7

1970

1980

1995

2005

Alternatives

• Decent work agenda• Social standards (incl. European social

harmonisation) • Capping return on equity

CO2 emissions

Alternatives

• Ecological debt financing• Financing a new model of sustainable

development by new clean development mechanisms

• Environmental standards• A new sustainable GDP

IMF democratic deficit

0

5

10

15

20

25

30

35

EU 27 Etats-Unis

Japon Afrique Chine Russie Inde Brésil

Population Revenu en PPP Votes FMI

Lack of coherence

Alternatives

• A new global system of governance (ex. : a New Global Economic Coordination Council)

• Democratisation of the new global system of governance

• Creation of a World Environmental Organisation

• Hierarchy of international law standards