KAZAKHSTAN'S PRESIDENT CALLS FOR A FAIR & DEMOCRATIC WORLD CURRENCY
Astana, September 23: In a communiqué titled ‘The Audacity of Responsibility’ released today President Nursultan Nazarbayev of Kazakhstan outlines his vision for a fair and more democratic world currency. The President’s blueprint is aimed squarely at the participants of this week’s G20 Summit in Pittsburgh.
“Today” writes President Nazarbayev, “as we see evidence of economic stabilization in key areas of the world, there is an urgent need for leaders to reinvigorate and renew their commitment to root and branch economic reform…And the starting point must be the world's obsolete and dangerous dependence on a single currency.”
As he outlined in an article last February titled ‘The Keys to the Crisis’, President Nazarbayev sees a "genetic" defect in the world currency system.
“The essence of the problem” he says now “is that the issuance and circulation of world currencies such as the US Dollar does not meet the basic criteria of a rapidly changing global economic and political landscape.”
“Where are the mechanisms that should guarantee legality, responsibility, accountability and control?” asks the Kazakh President - who goes on to say that “they simply do not exist, and will not exist unless there is a concerted global effort to find an enduring solution that would minimize the risks of the world plunging into yet another cataclysmic economic meltdown.”
PASSIVELY AWAITING FOR THE BOTTOM
President Nazarbayev writes of a situation where the world’s economists and media pundits “agree that we have hit the economic bottom and the recovery has begun and we can all breathe a sigh of relief and return to business as usual. But” he continues, “when a doctor tells us a disease is in ‘remission’, that does not mean it has been cured. The real ‘bottom’ of this crisis will be when we start actively removing its fundamental, underlying cause.”
The world’s economists cite currency swaps as one way forward says the President, “and some of our neighbors have used such a mechanism as a way of overcoming some of the worst effects of the crisis while dealing with their partners in Asia, Europe and America. But it is a short-term solution that in no way alters the ‘genetic defects’ of the world's monetary system” he says.
RE-MAKING THE DOLLAR
‘Re-making the dollar’ is another idea proposed by some experts – meaning nations turning their currency into a supranational currency. Would such a re-make eliminate the deepest effects in the global financial architecture. President Nazarbayev thinks not.
Another idea is to create a ‘Supranational Issuer’ - an idea that is gaining more and more supporters says President Nazarbayev.
“There are some sensible ideas being discussed among global policy-makers” he continues, “such as modifying the SDR basket of currencies through the inclusion of the Chinese Yuan, Russian Rouble and gold…The creation of regional currencies is a variation on this theme, and could prove to be a crucial stepping stone to creating a more stable financial architecture.”
CURRENCIES OF A NEW CLASS
Another way forward described by the Kazakh President is termed ‘Currencies of a New Class’. “It would involve a joint effort of like-minded countries in working out and adopting a supranational payment unit (followed eventually by a currency) of an altogether new quality. Its radical innovation” continues the President, “would be the transition from old monetary units of illusory value to a currency that accurately tracked the real value of goods and services. Unlike the old system, the new one would be a financial tool of purposeful profit and competition, and would serve the common, long-term goals of global economic development for all the world's people, rather than just serving the greed and senseless accumulation and consumption of a tiny minority.”
“What we need” says President Nazarbayev, “is the desire and political will of all future users of the proposed currency, followed by the formation of a single organization, under the auspices of the United Nations, to begin the step-by-step practical work that will lead to the fulfillment of our collective vision.”
President Nazarbayev concluded by calling on the international financial and economic community to take the first essential step, “to abandon the failed and unjust policies and systems of the past and to start developing the key requirements for the creation of the equitable, fair and democratic world currency of tomorrow.”