*This is a must read political contribution to South African Political Economy*
This is a framework I have thought about as a co-operatives activist in South Africa longing for the proper recognition of Co-operative Economy by the South African Government as the primary driver for Job creation. This piece proposes several ideas that if implemented the Government could rid the unemployment and inequality in the country. I invite a constructive discussions and penning down of alternative ideas that could easily lead our country towards socialism. I also the descending views that challenges some of the proposals I have made underneath and suggest some viable ways for our country to navigate towards a classless society. You can use some of the documents that some were adopted as resolutions in some of our National Liberation Movements to advance for a positive discussion. *Globalisation and its Key Institutions/ A New way of Developing South to South Economic Strength against North to North Economies* *1. Introduction* The task of the assignment is to identify the alternative key financial institution in the interest of the people as a whole as oppose to the IMF and the World Bank. To outline the model these alternative institutions should adopt to serve the people in general. More importantly is to reflect the intentions for the establishment of the IMF and World Bank post the Second World War. The intervention viewpoint that I would like toregister is to flag the point of establishing a reliable and equitable financial lending institution. The institution shall be named the International Cooperative Bank (ICB) central to everyone in the world. *2. World alternative key financial institution in the interest of the people as a whole* The main aim of the institution shall be to give a reasonable financial support to states without inflated charges of interests as oppose to what the IMF and the World Bank currently charges countries when they lend monies for their developments. The institution shall go extra mile to assist states to reduce level of poverty, inequalities and unemployment. This type of institution shall be in the central ownership by member states who contribute nominal amount of monies equitably under the flagship of world economic development. The fact that a dollar is a world reserved currency creates a serious problem to countries whose currency is too far weaker to the dollar. In that regard, this institution area of intervention shall focus on the following; - Developing Countries must accept each other currencies without introducing exorbitant amount of interest when trading amongst each other - Currencies shall be a regional or continental responsibility so that when the economy grow in one country within the continent it shall have a positive impact to the countries in the same regions or continent - Noting the fact that the IMF and the World Bank creates their environment easy to countries on the basis of loosening policies and lowering the inflation rates, this institution must tighten its policies and protect employment and grow the GDP of member states to this institutions - The paradigm of credit risks shall be at the top of the agenda when countries trade with each other. - The IMF and World Bank trapped countries by tailoring policies that imposes high interest rates to lander, tailoring a strategic take over to countries that are unable to pay back on time or to further indebts them by locking them in deep credit. - This institution shall defend the territorial and sovereignty of every country that become a member state to the institution. All states that are involved in this institution shall be treated as owners of this institution. - All member states must be compelled to contribute and be bind by equal collaterals as a sign to show equal partnership *3. Regulatory policies for the International Cooperative Bank (ICB)* It is my view that if the IMF and the World Bank were operating in a most transparent and democratic way, countries would be developing in a high scale and we could be moving toward united world by now. The element of greed and maximisation of profit through exploitation of other countries that got introduced along the process compromised the original agenda the IMF and World Bank wanted to implement. The institution I envisage shall be a total different to the IMF and the World Bank and its members shall have equal rights in decision making. The resolutions for any policy perspective shall be reached on simple majority from participating member states to the institution. The main point to establish this institution is to take an advantage that many countries have got their necks deep in credit and it will be a good intervention to introduce a reliable system that resonate well with their conditions. If needs be this institution should also assist those indebted member states with outstanding amounts to clear their credits with the IMF so that they can begin to concentrate on their own institutional growth. Developmental policies that should be initiated by the institution shall never compromise the people, but they should put forward the living conditions of the people as a whole in particular the working class. The institution should not sponsor of finance wars and ammunitions to countries for coursing disorder unless it is of significant importance to do so in protection of humanity. In his Report tothe Second All-Russia Congress of Political Education Departments October 17, 192 V. I. Lenin had this to say “We say that every important branch of the economy must be built up on the principle of personal incentive. There must be collective discussion, but individual responsibility. At every step we suffer from our inability to apply this principle. The New Economic Policy demands this line of demarcation to be drawn with absolute sharpness and distinction. When the people found themselves under new economic conditions they immediately began to discuss what would come of it, and how things should be reorganised. We could not have started anything without this general discussion because for decades and centuries the people had been prohibited from discussing anything, and the revolution could not develop without a period in which people everywhere hold meetings to argue about all questions.” This reflects the commitment to develop the community and take it through societal development as there should be nothing about the people without the people. The involvement of people to their own development is the best thing to do because governments must serve the mandate of the people. If people are made aware of socio economic policies that are aimed to intervene in their social living condition, they positively play a significant role in growing the economy of the country. The main aim of this institution is to make South Africa a powerful economic house responsible for the livelihood of its citizens. *4. International Cooperative Bank* *4.1 Powers and Functions of the International Cooperative Bank* - Shall have powers to terminate a membership of non complying countries that form part of the ICB - Its function will be to strengthen the development of countries that are member to it by providing financial assistance based on request. - The regulation of the lending and the investment policies shall be centrally constituted and controlled by the ICB that shall strictly concentrate on qualifying lending and borrowing by countries within the coughers of the ICB with a primary aim of developing their states. It is critical to reflect on the intervention viewpoint brought to us to cover the role of cooperatives in employment creation as it has always been a major concern of the ILO and its constituents. The ILO Recommendation No. 127 of 1966 concerning the Role of Cooperatives in the Economic and Social Development of Developing Countries lists employment creation among the main objectives of cooperative development. *5. Brief outline of the idea to establish the International Cooperative Bank* The principal agenda that the International Cooperative Bank should execute is to encompass all opportunities that can ensure a country’s economy grow on the basis of creating a reliable cooperative economy that shall benefit all the people as oppose to the capitalist economy which benefits only few people who owns the means of production. The ICB must operate in a more different way as opposed to the IMF and the World Bank. Our role shall be to ensure that states participate in a direct trade with the ICB and its regulatory organs and that ICB shall be given responsibilities of organically training everyone involved within its system to promote the policy of each according to need and each according to ability. It is of significant importance to reflect that the hallmark of this process of establishing the IMF and World Bank was the conference in Washington, USA, which crafted the new rules for the return of neo-classical economic known today as neo-liberalism and as globalisation. The conference decisions are known widely as the Washington Consensus. As part of global institutional reform, the function and mandate of the 1944 Bretton Woods multilateral institutions (IMF/WB), Keynes’ twins, originally established to stabilise and facilitate lending for reconstruction of the global economy and to smoothen country’s balance of payments problems after WW2 were now evolved in firm alignment with the neo-liberal “consensus” following the Washington conference Looking at the past agreements such as Bretton Woods, what makes the Bretton Woods Agreement so interesting to us today is the fact that the whole plan for international monetary policy was based on nations agreeing to adhere to a global gold standard. Each country signing the agreement promised to maintain its currency at values within a narrow margin to the value of gold. The IMF was established to facilitate payment imbalances on a temporary basis. It is an obvious case that there is no equitability in everything that involves the IMF and the Wold Bank and this makes it difficult to vary and measure the economic development and the growth of the society. As we put forward a new advocacy of a reliable financial institution that should serve the interests of the people as a whole we need to acknowledge that Maynard Keynes system worked for 25 years. But it was flawed in its underlying assumptions. By pegging international currency to gold at $35 an ounce, it failed to take into effect the change in gold’s actual value since 1934, when the $35 level had been set. The dollar had lost substantial purchasing power during and after World War II, and as European economies built back up, the ever-growing drain on U.S. gold reserves doomed the Bretton Woods Agreement as a permanent, working system. By its character the ICB should foster to register an immense development to the people of the world as a whole. Its primary agenda must be to see a positive economic growth across countries that are member to it. Contest space occupied by US in bringing tight investment policies in favour of the working class and the poor, including the developing countries that suffered being squeezed by the IMF and World Bank. *6. How will it differ with the IMF and the World Bank?* The ICB should make a huge difference with regard to the manner in which it should conduct its business. It should put its member’s interest at the top of its agenda and ensure equitable contribution by its members as owners of the Bank itself. The ICB should differ with the IMF and WB in that it should have a direct contract with other economic entities such as Entrepreneurs, Cooperatives, and small scale farmers that are directly involved in doing business in our communities. It should differ with the IMF and WB in that it advocates the idea of transforming the property relations within the economy and creation of the Socialist system. Having gone through some fundamental questions relating to the perfect economy that could serve the people well, to me the current world economic system needs to change. The only change that could benefits the people is the one that bring to the fore people’s participation. Most of the people who are disillusioned about socialist economic system turn to make reference about the collapse of the Soviet Union and in most cases they do so out of context. The late General Secretary of the South African Communist Party Cde Joe Slovo took interest to develop the paper that speaks directly to this subject titled *“**Has Socialism failed?* <https://www.marxists.org/subject/africa/slovo/1989/socialism-failed.htm>*”* Comrade Joe Slovo remains a Communist, convinced that the future of humankind lies in the socialist development of society and the social ownership of property. He therefore feels compelled to explain what could have gone so terribly wrong as to bring about the events we witnessed on December 22nd and 23rd 1989 in Soviet Union (Russia) *7. Cooperative Development and Employment Promotion* Both governments and donors have promoted cooperatives primarily to improve the living conditions of the rural population through increased production; in other words, they aimed at improving the quality of self-employment in rural* areas*, but not at increasing the number of jobs or self-employment opportunities. The employment creation potential of cooperatives has been generally neglected, and cooperatives were seldom considered in employment promotion policies (including those prepared with ILO assistance). The reason for this may be that many governments did not recognize cooperatives as enterprises, but as some form of social or political organization. Moreover, governmental cooperative departments are usually placed under the ministry responsible for agriculture or rural developments which, as technical ministries, are not primarily concerned with employment promotion. *8. Conclusion* Several former socialist countries, however, have promulgated separate laws for different cooperative sectors. Despite the change of the political system, these laws remain in force in countries such as Ethiopia and Mozambique. Several West African countries have recently adopted specific laws on savings and credit cooperatives that, because of their nature, need special provisions and supervisory mechanisms. This is to suggest that if correct policies and laws are put forward there will be a huge different with regard to the economic growth. People shall be the one leading the programme for their communities’ development at all levels in partnership with economic formations amongst them such as cooperatives, and private business. Everybody must have a positive role to play for the development of the country including growing its economy by encouraging a participatory democracy. Please note that the analysis of establishing a reliable system such as ICB requires both the hypothetical study and empirical study. This only reflect an idea supported by some of the concrete collected findings that require to be developed further to the highest level looking at the current material condition. I intend to develop this analytical interest further within the same subject. *Written by Takalani Mmbengeni A National Chairperson of SANACO - Youth* *8. Reference:* 1. A., Wiggin, *Financial Market, November*, 2006 2. C., Hull, U.S. *secretary of state from* 1933 – 1944 3. www.sacp.org.za *Historical documents*, 1990 4. J., Slovo, *General Secretary SACP., “Has Socialism Failed*”? 1990 5. V.I, Lenin, *The New Economic Policy., October 17, 1921* 6. J., Schwettmann, *Cooperatives and Employment* * in Africa, * 7. Cooperative management Act 6 of 20013 -- -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. 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