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Financial systems 'need alternatives' - AEPF chair

By Wang Zhuoqiong (China Daily)
Updated: 2008-10-15 07:17

The turmoil in the global financial markets has shown the importance of alternatives to major financial institutions, in the form of cooperative and people-oriented banking systems, experts and members of civil society have said.

"There should be new kinds of mechanisms for international development," said Heidi Hautala, chair of the Finnish Committee of Asia Europe People's Forum (AEPF), in a speech at the opening ceremony of the 7th AEPF conference in Beijing on Monday.

"There should be more alternatives to the dominating forms of economic globalization, which further increases gaps between winners and losers."

A man walks past financial services group Fortis' headquarters in Brussels October 14, 2008, Fortis NV shares slumped 63 percent as they returned from suspension after the group outlined a drastically reduced business structure and asked to be exempt from reporting forthcoming quarterly results. [Agencies]

Hautala, a member of the Finnish parliament and chair of the Committee of Legal Affairs, added: "The existing international financial institutions have not reduced poverty, nor have they stopped the ecological destruction of our planet.

"In fact, they are a significant part of the problem."

The forum, themed "For Social and Ecological Justice", has drawn about 500 people from key grassroots and activist networks, as well as nongovernmental organizations (NGOs) from Europe, Asia and China.

The forum is an inter-regional network of progressive civil society and social movements across Asia and Europe.

Since 1996, the AEPF has been organizing the biennial gathering of people from Asia and Europe, parallel to the official ASEM Summit Meeting that is scheduled to start on Oct 24 for this year.

Hautala also called on civil societies to play a larger role in solving the financial crisis.

"To build a strong economy, business needs support from a strong civil society," she said.

World leaders have options in supporting cooperative and people-oriented banking systems, she said, citing the example of the micro-credit bank founded by Professor Mohammad Yunus of Bangladesh, winner of the 2006 Nobel Peace Prize, as the best way to prevent fundamentalism and to empower women.

"We should have a solid financial system promoting employment and good livelihood for even poor people," Hautala said.

The current financial deregulation is also a crisis that is against the interest of the common people, said Charles Santiago, a Malaysian parliamentarian and member of the international organizing committee of the AEPF.

Santiago said developing countries such as China, India and Brazil should push for a new financial structure where China can play a leading role, offering a solution to the collapse of the global financial system.

Similarly, Walden Bello, the founding director of NGO Focus on the Global South, pointed out that the financial crisis showed the failure of globalization.

"This is the time for real regionalism to emerge," he said. "We need more space in this multi-polarized world."