Trinity College’s Vijay Prashad says world leaders will need to wrestle with a no-job growth economy, food insecurity, and the effect of a possible rise in interest rates by the Federal Reserve [This interview took place before the Paris attacks.]
Story Transcript
JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to the Real News Network. I’m Jessica Desvarieux in Baltimore. On Sunday, leaders of the world’s 20 largest economies are meeting in Turkey for the G20 summit. Top on their agenda is the Syrian refugee crisis amidst the five-year-long Syrian civil war. But of course they will also be talking about the global economy. Now joining us to discuss what you should be paying attention to at this summit is our guest Vijay Prashad. He is a professor of international studies at Trinity College in Connecticut. Thank you so much for joining us, Vijay. VIJAY PRASHAD: Pleasure, thanks. DESVARIEUX: Vijay, what will you be tracking ahead of the summit? PRASHAD: Well, the G20 was created in 2008. This is its tenth summit. The purpose of the G20, which brings together some of the major countries in the world, demographically large countries, economically large countries. The United States, Russia, Indonesia, Turkey, India, China, you name it, the big players will be at the table. They were brought together in 2008 to come up with a solution to the global financial crisis, the credit crunch. The problem that was occasioned by the American housing market, and by the kind of casino economy that has taken over the world of work and the world of wealth. So that was the purpose of the G20. Promises were made at the London summit of the G20, which said the following. That if China, India, these countries with at the time surpluses, would turn over some of their money into the world economy, to help bail out the credit crisis, then the West said that they would reform the IMF, the International Monetary Fund. They would allow reforms of various global institutions to give these countries a say. And they said they were going to close down the G7. It was mainly the West and Japan, their group. And to make the G20 the executive of world action. The sort of executive of the United Nations. That was the promise. None of that has, of course, come through, which has the Indians and the Chinese in particular are concerned. So what kinds of issues will come up in Antalya in Turkey? The Turks have said that the main, you know, principles for this particular conclave are implementation, inclusiveness, and investment. The three Is. The purpose is to encourage the implementation of the reforms promised by the West. In fact, earlier this year, just a few–actually a few weeks ago, the Chinese central bank sent out a message saying they want the United States to ratify the IMF reforms. A few days ago the head of the Indian federal, the Indian Reserve Bank, which is the central bank in India, at an IMF conference in Lima, Peru, called upon the United States to be very careful about how it does interest rate changes. The Federal Reserve is going to raise interest rates. When the Fed raises interest rates capital which is invested in very many parts of the world is going to return to the American stock exchanges, is going to return to the American economy. When that happens there will be a major liquidity crunch in the rest of the world. In other words there will be a lack of capital for investment in other parts of the world. So the head of the Indian central bank, Raghuram Rajan, has called for some kind of global liquidity fund. This is a proposal that the Chinese very much like, and there’s going to be I think some discussion in Antalya over the question of a liquidity fund. There’s also the [word] investment in the Turks’ principles. You know, one was implementation and then investment. They want to see about $80 trillion, $80 trillion invested in infrastructure. This is an enormous ask, but I think it’s of course an important one, and most countries around the world have committed themselves to infrastructural spending as a way to boost not only growth but jobs. I mean, the Turks in their preliminary statement have said we need to understand the phenomena of jobless growth, that you can have growth but we don’t have job creation. So this $80 trillion investment toward infrastructure goes a long way towards creating jobs. The problem with this, you know, $80 trillion investment is going to be what kind of infrastructural investment will be created. You know, the world is going to meet in Paris later in the year to talk about climate. So is this infrastructural spending going to be carbon-heavy, or is it going to be using various sustainable forms of energy? These are the kind of questions that I hope will be discussed at Antalya. Finally, the Turks have put on the table the question of food security. This is an extremely controversial issue. It shouldn’t be controversial, but it is. Principally because the countries of the West are really reticent to allow low-income countries, countries that are developing, to have food subsidies and to have, you know, various subsidies to keep prices low for people in these countries. So the question of food security has been placed on the table of the G20 for the first time. These are the main economic issues that I think they’ll be discussing in Antalya. DESVARIEUX: But Vijay, they’re also going to be discussing the Syrian crisis, the refugee crisis in particular. And we have President Obama that will be heading there to Turkey this Sunday, and recently in an interview with ABC News, President Obama was discussing the Syrian strategy and ISIS. Let’s take a listen to what he had to say. PRESIDENT BARACK OBAMA: Well, I don’t think they’re gaining strength. What is true is that from the start our goal has been first to contain, and we have contained them. They have not gained ground in Iraq. And in Syria it, they’ll come in, they’ll leave. But you don’t see this systematic march by ISIL across the terrain. DESVARIEUX: So Vijay, we just heard President Obama say that they have contained ISIS. What do you make of that? PRASHAD: Well, I mean, it really depends on what you mean by contained ISIS. I mean, about a year and a half ago I wrote an article called The Pendulum of the Islamic State. The point of ISIS isn’t really to hold territory. So President Obama is actually holding them to a standard that they don’t actually accept. Their point is they come in, they come out. Exactly what he said is their strategy. I mean, they move into cities, they hold them, they leave them. They have some base areas, of course. Raqqah is a major base area. But they’ve been playing this kind of cat and mouse game in western Syria for the better part of the year and nobody has been able to stop them. That the Turks want to put the Syrian issue on the G20 table is unbelievable, because on the G20, of course, is Russia. It is a big player in the G20, and China. Neither China nor Russia are willing to accept the Western narrative of what to do in Syria, which is a narrative that’s very close to the Turkish one. Neither of them are going to permit regime change, and in fact the Russian military entry into Syria has invalidated regime change, which is something that the Turkish government has not really come to terms with, this new reality, because of Russian troops on the ground. So I don’t understand what Mr. Erdogan would gain by putting Syria onto the G20 agenda. I’m afraid this kind of issue being put on the agenda might distract the G20 from the fundamental reason why they are at the table, which is to sort out global economic inequalities. The agenda of an institution like the G20 should not be inflated to bring in political issues for which there is no solution at that table. So I’m actually quite disappointed that this will be on the G20’s discussion. DESVARIEUX: All right. Vijay Prashad, we will be sure to have you back on so we can follow up on this story. Thank you so much for being with us. PRASHAD: Thanks a lot. DESVARIEUX: And thank you for joining us on the Real News Network.
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