The Foundation Stone Has Been Laid
For a New World Economic Order
by Helga Zepp-LaRouche
April 16, 2015
This article will appear in the April 24, 2015 issue of Executive Intelligence Review.
Here is Helga Zepp-LaRouche’s keynote address (delivered electronically) to a seminar sponsored by Executive Intelligence Review, in New York City, April 16, 2015.
Hello. I greet you.
Let me first express that I really would have liked much, much better to talk to you in person, and unfortunately, a little accident prevented me from coming, but I hope we can talk about these issues in this electronic way.
There is something very, very fantastic happening in the world right now, and those of you in America, who are dependent only on the mainstream media, may have absolutely no inkling of it, because the mainstream media are not reporting that a completely new economic system is emerging. It is emerging with extremely rapid speed. And more than half of humanity is already participating in it.
Now, the first system has been initiated by the leaders of the BRICS nations, at the Fortaleza summit in Brazil last July. And they proceeded very quickly to establish the New Silk Road and the Maritime Silk Road, and a whole system of relations with South America, with ASEAN countries, with African countries (Figure 1), and in the recent period, even with European countries. And this new model is basically establishing a completely new system of relations; it’s what Chinese President Xi Jinping often calls a “win-win” policy, or even a “win-win-win” policy, depending how many parties are participating in these projects. And it is based on the idea that, through the development of basic infrastructure, of scientific and technological cooperation, and an increase in connectivity among these nations, that this will lead to the mutual benefit of all participating countries.
Now, this annual summit of the Boao Forum [March 26-29] on the island of Hainanthe Boao Forum is the Asian equivalent of what normally takes place in Davos in Switzerland, except the difference is that in Davos, you have a lot of bankers and a lot of monetarists coming together, while this Boao Forum brought together many, many leaders, especially of Asia, who were all interested in real economic development, in infrastructure, and cooperation. And at this forum, President Xi Jinping announced what they are now calling the “One Belt, One Road,” which is simply another name for the New Silk Road, or, as we called it in the past, the Eurasian Land-Bridge, and announced a global perspective for development.
This includes huge infrastructure programs: corridors, high-speed railways, waterways, and ports. And this report was declared to be official policy by the National Development and Reform Commission, as well as the Foreign Ministry and the Commerce Ministry of China.
As you can see here (Figure 1), this is a vast, vast network of corridors connecting China, Central Asia, Russiaall the way to Europe. Then, another set of corridors from Central Asia, to West Asia, into the Gulf, and the Mediterranean. Then the 21st-Century Maritime Silk Road involves sea and land corridors from China, to Southeast Asia, to South Asia, to the Indian Ocean, and to the Pacific. Then other corridors go overland from China to Mongolia, to Russia; another one to Bangladesh, China, India, and Myanmar.
So, what goes along with that is a whole new system, a new world system, of banks and financial credit institutions, to finance these and other projects.
The World (Except the U.S.) Joins the AIIB
People were quite astounded about the sea change which recently took place when the AIIB [Asian Infrastructure Investment Bank] went into the final negotiations about who would be among the founding members, negotiations which concluded a couple of days ago. And lo and behold, the AIIB had 57 founding members.
Now the U.S. government, misjudging the situation dramatically, put utmost pressure on its allies, and also developing countries, under those circumstances, not to be part of the AIIB. And despite this heavy pressure from the U.S., the first country in Europe to join was, of all places, Great Britain, the firm ally of the United States. And when Great Britain joined, you had an avalanche of countries going in the same directionwanting to become founding members of the AIIB: Germany, France, Italy, Luxembourg, Switzerland, Austria, all the Scandinavian countriesand, Australia, South Korea, New Zealand, and many other Asian countries.
China was very emphatic to point out that, despite the fact that the AIIB obviously has been created as a supplement to the IMF and the World Bank, China does not want to turn the AIIB into a geopolitical confrontation with the United States, and they have reiterated, both from the government, and also in leading Chinese publications, many times, the offer that the United States and European countries should join the AIIB, the New Development Bank, and also the projects of the New Silk Road and the Maritime Silk Road. Because China is developing a new model of international relationships, which is all-inclusive, which is overcoming and superseding the concept of geopolitics, which, after all, was the basis for two World Wars in the 20th Century.
The New Development Bank, which is a similar bank, created by the BRICS last year, will be functioning in July, at the next BRICS summit, which will take place in Ufa in Russia. So, at that point, you will have two operational large infrastructure banks. But then you also have the New Silk Road development fund, which has $40 billion; the AIIB and the New Development Bank have initial capital of $100 billion eachbut that is just the beginning, starting capital. The New Maritime Silk Road Fund has $20 billion. But then also, the countries of the South Asian region, the SAARC countries, are planning to build their own development bank. The Shanghai Cooperation Organization is building a new bank.
And then, these countries have jointly decided to create something which is called the Contingency Reserve Arrangement [CRA]. Now this is a pool of currency reserves, of $100 billion initially, which was obviously a response to the speculation, conducted during the Asia crisis of 1997, where the currencies of Asian countries were speculated against, by speculators such as George Soros, for example; and in one week, they were driven down by 80%. And it was also a result of the 2008 near-meltdown of the financial system in the Lehman Brothers crisis.
What these countries of the BRICS and related organizations are now doing, is, they have created the CRA, to protect participating countries against speculative attacks, even new financial crises that are to comeand they are shortly to come. The CRA was also the reaction to the fact that the U.S. Congress absolutely refused to change the rules of the IMF and the World Bank, after the 2008 crisis.
These parallel financial organizations were characterized by Mrs. Denise Leung, from the finance center of the World Resources Institute, this morning on the German government radio, Deutsche Welle. This woman said: Development is absolutely not possible without the AIIB and the New Development Bank, because in Asia alone, there is a need for infrastructure investment, up to the year 2020, of $8.2 trillion.
Now, the entire investment of the World Bank, in 2014, was only $24.2 billion, and of the Asian Development Bank, only $21 billion. So, obviously, the AIIB, the New Development Bank, and all the other banks I named, have to fill this gap. And obviously, to have such independent financial institutions, will give the developing countries, also a much greater voice in determining their own economic policy to the advantage of their own population.
Eradicating Poverty Worldwide
The aim, explicitly stated by several BRICS leaders, is to use these banks to eradicate poverty from the surface of the planet in a very short period of time. In Asia alone, you have presently over 700 million people who are still living below the poverty level. Now, Prime Minister [Narendra] Modi has made several exciting speeches, in which he declared a national objective of India, to eradicate poverty from the Indian nation.
Also, President Xi Jinping has proudly announced, repeatedly, that the Chinese economic miracle, which, nobody can deny, is one of the greatest miracles in terms of economics ever in the history of economiesbecause China was able to have an economic development in 30 years which most industrial nations in Europe, in the United States, and elsewhere, needed 100 or even 200 years to accomplish. And Xi Jinping has announced that that kind of development, which has now transformed the poor population of the coastal regions and the southern parts of China, to bring that into the inner regions, and into the Western parts of China, which are mostly desert, and therebyit’s not so easyto use this Chinese economic miracle as the model for the New Silk Road for every country that participates in these projects, to repeat exactly what China has accomplished.
The Neue Zürcher Zeitung, which is the major Swiss financial daily, had, this morning, an article with the headline, “Gold Rush Mood Thanks to the New Silk Road, Investors Are Rushing To Buy Stocks in Chinese State-Owned Enterprises. They Are Investing in the New Silk Road.” I have to say that there is a certain amount of confusion in the editorial board of Neue Zürcher Zeitung, because they are looking at these developments with the spectacles of monetarism, but obviously, this is not what this is at all, because the AIIB, the New Development Bank, and the other institutions are credit institutions, and are not part of the casino economy of Wall Street, or City of London, or Frankfurt, for that matter. But they go very explicitly back to the principles of the first Secretary of the Treasury of the United States, Alexander Hamilton, who created the first National Bank, and with that, a credit-financing institution for the real economy.
And that first National Bank, that credit system, was the basis for the gigantic industrial revolution which occurred in the United States. And it was the policy to which good American Presidents always returned, such as Lincoln, with the greenback policy; or Franklin D. Roosevelt, with the New Deal, and the Glass-Steagall separation, and the Reconstruction Finance Corporation, which happened to be not only the motor for the United States to overcome the Depression in the ’30s, but it was also, in the form of the Kreditanstalt für Wiederaufbau, the basis for the German economic miracle, in the postwar reconstruction of Germany.
This was also the basis of the proposal by Lyndon LaRouche to create an International Development Bank, which he made in 1975, and for which this organization has campaigned practically in all the years since. And we have now the development that this idea, to have a bank which is only there to finance development, is coming into reality.
The Casino’s About To Blow
This is extremely urgent, because the trans-Atlantic region is based on a completely different idea, namely, the profit-maximization of the casino, and that is totally bankrupt, and it is about to go bust.
The recently published Beige Book of the Federal Reserve, which is estimated to reflect the complete denial of reality by European economists, in fact, pretends that there is an upswing in the United States, but what it shows, the real figures showand these figures are still manipulatedis that you have a collapse of the real economy in the United States. The New York Fed’s Manufacturing Index, which measures manufacturing activity in New York State, went down to negative 1.19 points, from 6.9 points in March. The new orders index went down from negative 2.4 points, to negative 6.0. The employment index collapsed from 18.6 to 9.6%. So, even by the fraudulent statistics of the Fed, the real economy is shrinking.
But the real crisis is that the too-big-to-fail banks have a derivative exposure which is today 40-80% larger than in 2008, at the point of the collapse of Lehman Brothers. And this system could detonate at any moment.
For example, if the Fed would increase the interest rate just a tiny amount, that derivative bubble would, almost certainly, explode. And if the European Union continues its hard line against Greece, a policy which is supported also by German Finance Minister Schäuble, and drives Greece out of the Eurozone, which is now on its wayfor example, Standard & Poors just downgraded Greece from a B- to level CCC+, which is already junk bond level.
Therefore, in reality, we are looking at the upcoming explosion of the financial system of the trans-Atlantic sector, and these new banks are actually the lifeboat for a sinking Titanic.
The problem of the trans-Atlantic sector could be solved very easily, if the United States would go back to the Glass-Steagall separation of the banks, which was introduced by Franklin D. Roosevelt in 1933, and repealed only in 1999. That, by the way, makes the Presidential campaign of the pre-Presidential candidate Martin O’Malley the most important campaign, because he has said that the most urgent action he would take, if he were to be elected to the White House, would be the implementation of Glass-Steagall: Protect the commercial banks and separate the investment banks, and do not finance them anymore through quantitative easing, or through so-called rescue packages, and they would go bankrupt, if they would be forced to rely on their own system.
And there is a connection between the pending collapse of the Wall Street banks, the City of London banks, and other related banksand the increasing war danger, which we have discussed many times. The Empire collapse is what is driven by the pending collapse of the banks, and the war danger in Ukraine and the Middle East comes from that.
Therefore, it is a life-or-death question of civilization, that we get the United States, and the European nations, to join with the BRICS, to join with the New Silk Road, and join the “win-win” perspective, as a conscious war-avoidance policy. Because if all the countries of Europe, the United States, and the BRICS countriesto which, for example, Russia belongsare working together in these large projects, then, and only then, can you overcome the reason for war.
Because war has always occurred as a result of geopolitics, and we have to get the United States off the idea of the Project for a New American Century doctrine, which was introduced by the neocons at the end of the ’90s, which is the idea that they will not allow one nation, or a group of nations, to ever become stronger than the United States.
The California Drought: A Nazi Policy
So, therefore, let’s look at the reality of the situation. Not only is the trans-Atlantic sector about to experience a bigger blowout of the system than in 2008; the most dramatic situation we have right now is in California, and in the entire Southwest of the United States, where you have a prolonged drought, and a huge water shortage.
On the 12th of March, there was an op-ed in the Los Angeles Times by J. Famigletti, who is from the NASA Jet Propulsion Laboratory; he said that California today has water supplies for only about one year left in its reservoirs. You can see here on this picture (Figure 2), the drought emptying the reservoirs and also reducing the snowpack, which means there will be no water flowing into these reservoirs and other water systems. And what was the reaction of Governor Brown? About a week ago, he announced a mandatory cut of water usage of 25%, except for agriculture, and fracking, this completely insane method of production of shale gas and oil.
Already over 500,000 acres remained unplanted in the last year, and it probably will be more than 1 million acres, which will not be used for agriculture this year. Several towns in California are already out of water. And soon, you will see a migration of people out of the largest and most productive state in the United States.
So, when we, about a week ago, presented in the state legislature in Sacramento, the revolutionary new concept of how to deal with this water crisis, which has been worked out by Ben Deniston and Lyndon LaRouche, with the science team he’s working with, we had a very unusual, shocking experience. When we presented this revolutionary proposal of Ben Deniston to Mr. O’Connor, who is the principal consultant to the State Senate Committee for Natural Resources and Waterand we went there with the expectation that they would be happy to find people concerned with solving the water crisisthe reaction was a complete hysterical denial that there were water shortages before, a cyclic development of weather patterns over thousands of years, that the drought is not the result of anthropogenic activities of mankind. He completely freaked out.
And what Ben Deniston had proposedhe will elaborate this later on himselfis that you can have a combination of measures, like desalination of ocean water, with the help of nuclear energy, in the tradition of what Roosevelt did with the Tennessee Valley Authority, like managing and changing the Colorado River, and similar proposals. But also you could revive aspects of NAWAPA [North American Water and Power Alliance]that is, bringing down the plentiful water from Alaska and Canada, along the Rocky Mountains, with a system of canals all the way to Mexico. Or, use the fact that 90% of all precipitation does not occur over land, but over oceans, and that you could use the ionization of moisture in the atmosphere, over the Pacific Ocean, to develop more water.
Recent studies focused very much on the high-energy galactic, cosmic rays in controlling the ionization of the lower atmosphere, and that seems to influence the cloud formation, and is also catalyzing the condensation of water vapor in the atmosphere. That method has already been tested and applied by several countries. But it was very clear that this Mr. O’Connor had absolutely no interest in even listening to these proposals. Then, by reviewing what the problem was, we foundwhich we had already known before, but it came now in the context of the reduction of the water use in Californiathat it is crystal clear what the intention is.
The same too-big-to-fail banks, which are about to blow, including the different members of the Bush family and the American multi-billionaire T. Boone Pickens, all of these people had invested, in the last 5-10 years, enormous amounts of money into everything that has to do with water: land which is over aquifers, lakes, but also water pumps, chemicals to purify water, membranes, bottled waterjust everything which has to do with waterand not only in the United States, but all over the world.
So it is very clear that what they have been trying to do is to corner the water market, in order to speculate on the scarcity of water, on rising prices, totally disregarding what would be the effect of depopulation, of destruction of agriculture, of increase of food pricesand actually killing people.
And there’s no question that this is a Nazi policy, because you see the same support of Nazi policies in Ukraine. You see it in the absolutely anti-human policy of the Troika in Greece, destroying one-third of the Greek economy; and you see it in the absolutely horrendous condition of the developing countries.
Now, the consequence which these people take into account, is the death of millions and millions of poor people.
Major deserts on the planet today
Here you see the world deserts (Figure 3), which actually grow from the Atlantic Coast of Africa, all the way through the Sahel Zone, the Sahara, the pan-Arab peninsula, the Middle Eastall the way to China, and naturally in the Southwest of America. But there are two completely different approaches to how you deal with that.
You have the speculation on the scarcity of water, on the side of Wall Street and the City of London, and other speculators.
China and India: The Counter-Example
But then if you contrast that with what China has been doing, China has, in recent years, developed the two largest water projects in the world (Figure 4). There is, on the one side, the Three Gorges Dam, which changed the water of the Yangtze, and has turned this into the largest power-production facility in the world, producing 22.5 gigawatts per year, and it has protected thousands of people from drowning every year, and established efficient flood control. And secondly, you have the South-North Water Transfer Diversion Program, of which two of the three parts have already been completed.
Now, the Eastern Route of this project, which brings water from the very water-rich spring region of the Yangtze River, to Anhui and Shandong and Jiansu provinces, filling up, on the one side, the Yellow River, and using irrigation from there. And then, secondly, the Middle Route, which brings water to Beijing and Tianjin. These two routes are already bringing large amounts of water to the dry areas, while the Western Route is still in the phase of planning.
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But China is not the only country that is taking this productive approach. At the recent SAARC summit, Indian Prime Minister Modi presented a similar program for India. It is the idea of linking the Sharda River, which flows in the Himalayas, and bring it north to south along the India-Nepal border, and bring waters of the Yamuna River, which goes from west to the east, into the Ganga [Ganges] River Valley.
And all of this goes back to the Indira Gandhi National Water Development Authority, which she established in 1982. This was the time when we were working with her, together, on a 40-year development perspective for India. And this was not carried out, because of her assassination, but it was a gigantic project, which had the idea of having 30 rivers linked through canals, creating 3,000 storage structures, projects which would create 34 gigawatts of hydropower, which would have provided 35 million hectares of land for agricultural use. It would have transferred 175 billion cubic meters of water per year, and massively increase the food production, and protect the population against floods and droughts.
Prime Minister Modi has revived all of this, and he has created a task force on the interlinking of these rivers. He announced plans to convert 101 rivers into transport channels, which will cut transport costs by 30%, and increase the capacity gigantically. That goes together with several desalination plants on the coast of Tamil Nadu, and it also involves a plan to connect 14 rivers from the Himalayas to 16 others across the Indian peninsula, adding 35 million hectares of irrigated land, and 34,000 megawatts of electricity. That is three times as much as you need to provide electricity for New York City.
Obviously, there are many, many areas in the world which need the approach taken by China and India, and which is lacking right now in California.
For example, the same approach must be taken for the Aral Sea, which has shrunk to only 5% [of its former size]. This is creating immense tensions between Tajikistan and Kyrgyzstan, which have access to several rivers before they flow on to Kazakhstan, Turkmenistan, and Uzbekistan, and naturally tensions exist between these countries.
The Transaqua Plan
This approach must be taken to Lake Chad, which has shrunk to less than 10% of its previous levels, and for which we have proposed for a very long time, the Transaqua plan (Figure 5), which has been worked out by the Italian physicist Dr. [Marcello] Vichi, which has the idea of taking the abundant wateractually, too much waterfrom the Congo River, and bringing it up through a system of channels and canals into Lake Chad, which would transform the life of millions of people. Obviously, this is not an option, but a bitter necessity.
Because right now, we hear every week, the horrendous reports about thousands of people trying to flee across the Mediterranean, from Africa, and also from Syria and Iraq, and many hundreds of them are drowning every week. And the EU has nothing better to do than to chase these people back, and to try to prevent them from coming, which underlines once more, the complete moral bankruptcy of the EU.
The World Land-Bridge
Now, the World Land-Bridge: This proposal, which we have produced in a study of over a year’s duration, and which we published at the end of last year. This is a 370-page study, which not only outlines all the future projects, the tunnels, bridges, corridors, etc., which are needed to turn the present world situation into a coherent connected World Land-Bridge; it also has a lot of the scientific conceptions provided by the scientific method of Mr. LaRouche, of physical economy, of why an increase in the energy-flux density in the production process, is the absolutely necessary way to go; and why only with these principles, can you provide food and livelihood for the increased population in the world, and the increase in the relative population density is the law of the universe. And all of that you will find in this report.
If you look at the various projects (Figure 6), which I only want to identify here very, very briefly, it is a network of bridges, tunnels, and canals connecting the five continents of the world, actually turning it into a coherent world transport and infrastructure system, so that in a few years, you could travel, for example, from the southern tip of South America, by maglev train, all the way up through the Americas, through the Bering Strait, all the way to Cape of Good Hope in Africa, or to Indonesia, if you want to take a different route; and that would be faster than to go by ship presently.
These projects include, for example: the second Panama Canal, which has started to be built in Nicaraguathis is here, number 1 on the map (Figure 6). This already started last December, with the help of China. It’s a 278-kilometer canal. Then, number 2, is the building of the Bering Strait tunnel (Figure 7). This has been recently proposed by the head of Russian Railways Vladimir Yakunin, which is to built a fast railway system from London all the way to the Bering Strait, and from there, to New York. And that has been adopted as the official policy of Russia.
The Bering Strait Tunnel
Now obviously, what is lacking right now is the American commitment, but I think that that is what we are campaigning for, to be adopted.
Number 3 on this map (Figure 6) is the tunnel connecting the Sakhalin Island with the Russian mainland, which is supposed to be a tunnel of 7.3 kilometers. Number 4, the Sakhalin-Hokkaido tunnel, or bridge, which will be 45 kilometers. Number 7 is the tunnel connecting the shores of Bohai Bay, shortening the distance to 100 kilometers, connecting two Chinese cities, Dalian and Yantai. Number 10 is the building of the Kra Canal, which is supposed to be an alternative to the Malacca Strait, which is completely overworked. Number 12 is the expansion of the Suez Canal, which is happening at a very fast speed, under the leadership of the new el-Sisi government in Egypt, which has completely transformed that country, and caused total excitement among the population.
This is the European extension of the Eurasian Land-Bridge (Figure 8), a part of the World Land-Bridge, which we produced in 2012, when it became clear that the policy of the Troika transformed all of Southern EuropeGreece, Italy, Spain, Portugalinto economic desert zones, reducing the real economy of Greece, for example, by one-third, causing two-thirds unemployment of the youth, increasing the death rate, increasing the suicide rate. The same picture for Italy and Spain and Portugal. And it was the idea to extend the New Silk Road/Eurasian Land-Bridge into Spain, into the Balkans, and then from there, to build bridges and tunnels into Africa, and connect it with the extension of the New Silk Road into Africa.
This is all in the documents of the World Land-Bridge [The New Silk Road Special Report], and I can only advise you, you should acquire this report, because this is the blueprint for the next decades of human civilization.
The Principles To Be Followed
Now, Xi Jinping announced at the Boao conference the principles of this new policy, which basically are the five principles of the Bandung Conference of the Non-Aligned Movement from 1955. It is in complete cohesion with the UN Charter. It is based on respect for international law. It is the idea of non-interference, respect for the sovereignty of the other country, the respect for the difference in the social system of the other country, and to base the policy on the maximum development of the otherwhich happens to be also the principles of the Peace of Westphalia, and international law.
Xi Jinping made a speech on that occasion, where he said, “We have only one planet, and countries share one world. To do well in Asia, and the world, we cannot do without each other. What China needs most is a harmonious and stable domestic environment, and a peaceful and tranquil international environment. Turbulence or war run against the fundamental interest of the Chinese people. China has suffered from turbulence and war for more than a century, since modern times. and the Chinese people would never want to inflict the same tragedy on other countries, or peoples.
“History has taught us that no country that tried to achieve its goal with force ever succeeded.”
The proof of that, obviously, is the condition of Iraq, of Syria, of Libya, of Ukraine, and many other countries, in Africa, for example.
What we have to accomplish, therefore, is to make an all-out effort to convince the United States and the European nations that they should join with the BRICS, and with the New Silk Road policy.
I believe that we have come to a point in human history, where either we bring the political and economic order into cohesion with the real laws of the universe, of the physical universe, or we are threatened with extinction in a nuclear annihilation. However, I think that in all great traditions, you have this idea that the laws of the universe must be a guidance for our political order on the planet.
You find that idea beautifully developed in the Confucian tradition, of 2,500 years of Chinese history, the idea that politics must follow the Mandate of Heaven, that there must be a harmony of all nations based on the idea of Love, which is the Confucian notion of ren, and that each nation must fulfill its rightful place, and its rightful task in this alliance, which is the notion of li.
That same idea you find in Hinduism, that the cosmic order must be implemented on the planet, in the political order. You find it also in the Christian humanist tradition of European culture, of which, after all, America is a part. It’s based on the idea that concordance in the macrocosm can only exist if all microcosms develop in an appropriate fashion and way, promoting the interest of the other as if it would be their own.
So, I think we have an unbelievably optimistic situation. It is full of dangers. We are threatened with World War III, very immediately, but the solution is there. I mean, if we get the United States to really become a republic again, as it was intended by the Founding Fathers, as it was established by Alexander Hamilton and the idea of a National Bank and a credit system; as it was promoted by John Quincy Adams, who had the idea that America must be a republic in an alliance of sovereign republics; as it was reconstituted by Abraham Lincoln; and by Franklin D. Roosevelt, and as it was echoed by John F. Kennedy.
I think we have to revive that American tradition, and then I think Europe will follow, because, as you could see with the rush into the AIIB, and the excitement about Modi, about China in general, in Europe, I think we could really turn the tide. And I want to ask all of you, to join in this effort.