Dealing with Global Financial Crisis: World Anti-Crisis Plan

IPS seminar endorses ‘World Anti-Crisis Plan’ to mitigate global financial crisis

Experts at a seminar held at Institute of Policy Studies on April 10, 2014, termed the ‘World Anti-Crisis Plan’ a comprehensive document that can be built upon to overcome the multidimensional challenges posed by the global financial crisis.

‘World Anti-Crisis Plan’ is a draft document to be adopted by the coming second UN World Anti-Crisis Conference which will be held in Astana, Kazakhstan, on May 21-23. The document proposes ambitious targets and strategies to tackle the economic and financial problems of the world. The efforts are validated by the UN.

The event titled “Dealing with Global Financial Crisis – ‘World Anti-Crisis Plan’” was chaired by Fasih Uddin, former chief economist, Planning Commission of Pakistan, and was addressed by Khalid Rahman, DG-IPS and renowned economists Sakib Sherani, Dr Naheed Zia Khan and Professor Dr Zafar Iqbal.

The sitting endorsed the plan as whole, saying that with some modification and improvement, the strategies suggested in it can help avoid a repeat of such crisis. It however was asserted that these steps could only mitigate the crisis, but not eliminate it entirely.

Experts, however, argued that what the global economy was confronted with, what they called, more than a ‘Financial Crisis’ as the term did not reflect the true impact of the failings and resultant implications. It was not only the failings of capitalism, but the failure has also exposed the shortcomings of markets, financial institutions, states, global governance and participatory democracy.

Sakib Sherani, Former Adviser, Ministry of Finance, Govt. of Pakistan asserted that the economic system which was built upon the “sanctification of debt over equity” and the “glorification of growth as a measure of progress”, has led to this global disaster.

He was of the view that “out of the box” solutions and alternative models were needed to deal with the catastrophe. He lamented that the global institutions were still are not able to step outside of their own constructs to provide an alternative model.

Fasih Uddin viewed the World Anti-Crisis plan as one of the most comprehensive document on the subject. He also offered some suggestions over the matter including the prioritizing and sequencing of proposed policy measures, defining of timeframe for the proposed tasks, assigning of responsibilities of implementation to the countries, and devising the monitoring mechanism for the implementation plans.

Dr. Naheed Zia Khan, Dean Faculty of Social Sciences, Fatima Jinnah Women University termed the current financial crisis as a tsunami with warnings. She submitted that the human society needs a structural change, especially in social capital, conservation of natural capital and production of human made physical capital in terms of both quantity and quality.

Professor Dr. Zafar Iqbal from FAST School of Management, Lahore, saw the need of redefining the prevalent financial structure and architecture which was responsible for the speculative measures that can go beyond control and thus create this financial crisis repeatedly in different forms.

He was optimistic about the potential in the Islamic finance and banking as a workable alternative model. He suggested employing the economic system that the Islamic finance and Islamic economic professionals have developed over time, as it has succeeded in developing certain contracts which can tie up the creation of money and process of lending to the real economic activity.

Khalid Rahman, Director General IPS emphasized that there were certain inherent weaknesses in the prevailing global economic and financial paradigm that, if left aside, would not let any positive results to show. Yet “good points in all of such programs that are emerging, may be adopted, strengthened and popularized”, he maintained.

The speakers unanimously agreed that the current global financial crisis was not merely economic but also a moral and ethical one in nature. They stressed on tapping, developing and building an alternative system upon the potential of economic ethics and values.