The key out of crisis

Nursultan Nazarbaev

President of Kazakhstan


The global world crisis which is shaking the countries and continents today is a special phenomenon unknown to mankind ever before. It is definitely an unprecedented phenomenon which does not have its analogy in world history and which is cardinally changing the world order with all its economic foundations. That is why for its analysis, understanding and for overcoming it a totally different approach is required which should reexamine all the old dogmas and stereotypes.


In this connection it would be unproductive to look for extremities and guilty persons. At this time of crisis it is more important to concentrate on finding out the inner defects of the system which have led to such large-scale cataclysms, and it is even more important to find out ways for their total eradication. For doing so one should have the courage to admit that we are standing at the threshold of creating a radically new model of world economy, politics and global security which has been built up in a different way.


There is no other choice available to us, if we really intend to utilize effectively this unique opportunity of overcoming the shortcomings of the Old World and building up a New one. It is obvious that this requires within a short period of time colossal efforts on the part of entire world community, and mobilization of intellectual and financial resources. We need to develop a radically new logic and work out new general “laws of movement” concerning this transition which we can provisionally call as the World of Global (or Great) Transition. Let us first mark out the basic reasons of this global crisis and its sources.


Deep-rooted global defect

1500 years ago a great thinker of Eurasia had said: “External strength is the fruit of inner power.”  We can slightly rephrase this thought and say in definite terms that “External crisis is born out of internal crisis.”

Obviously, the present global crisis is not at all a natural calamity, it is neither a result of accidental coincidence of circumstances, it is a natural external consequence of some deep-rooted internal defect.

Unless we are able to clearly define and outline this global crisis, all our efforts to rectify the world currency and finance system with which the present crisis has actually begun, will have only a cosmetic character. In such a case the unrectified defect will lead to new crises in future also with accruing frequency and with more serious consequences.

It so happened that the whole of our world has somehow unexpectedly and imperceptibly got into the tunnel of global crisis from where nobody is able to see where is the "exit".

The crisis has taken place, probably, because we still look at the today's world, as well as at the future New World, through the prism of old tools of thinking. But to start radically updating ourselves, we have to first update our entire thinking. Accordingly, it is necessary to update all the concepts, categories, theories, plans, concepts of thinking and the terms which are used to designate the facts and the phenomena of the New World.

What underlies the development of the whole world? The world capital as an ever reproducing global wealth is the prime mover of its development. And what underlies this capital? The answer is – the system of world currency. And what underlies the system of world currency? The system of world currency is run by the mechanism of its generation and circulation – the laws, procedures, issuers, channels, users etc.


Seven simple questions

Radical updating of our thinking can begin, for instance, by giving clear-cut answers to the following seven simple questions wherein lies the very essence of rehabilitating the system of world currency. These questions bring out this essence in a most accurate and radical manner.

1. Is the de facto existing world currency de jure lawful? It is obvious that in the absence of an international law on the world currency signed by Heads of majority of the countries and ratified by the majority of parliaments of these countries one can not talk about such a level of legality in this matter.

It would be more correct to characterize the existing world currency as "pre-legal" because it de facto appeared before any global law of world currency which could have given it legality de jure.

That is why the currency of the New World should exist on the basis of an international Law of World Currency signed by the Heads of majority of the countries of the world and ratified by the majority of parliaments of these countries. Here one thing is clear that it would be unproductive to use national currency of any country of the world as world currency. This law should define in very clear and unequivocal terms the essentially supranational and interstate status of this world currency and principles of issuing it by specially constituted World Issue Centre. Such a system could really become the basis for an absolutely lawful and legitimate world currency being adopted for the first time in the history of mankind.

2. Is the procedure followed by the issuer of world currency truly democratic? It is absolutely clear that none of the peoples of the world are participating in either taking decisions, or in the activity of the issuer of world currency. That is why the procedure of activity of the issuer of world currency of the Old World is not democratic from any angle or point of view.

In this connection all the main subjects, i.e. the users of the new world currency could create, according to the law of world currency, democratic bodies for controlling its issue and the issuers, and such bodies should operate strictly according to democratic procedures.

3. Is the mechanism of balance of a supply and demand of world currency is competitive and free?

It is quite obvious that the world market of world currency is not competitive and cannot be recognized as such until international institutions have been created which will be responsible for setting and supervising the rules of competitive activity of all the participants of this market.

This type of obligatory competitiveness could be ensured and be strictly supervised by a special inspection body, such as, the World Antimonopoly Currency Committee.

The existing market of world currency obviously does not provide equal rights to all its possible issuers. It is well-known that in a free market any privileges for any groups of sellers, as also overt or covert restrictions on purchasing power and goods exchange function of the currency which is used as world currency are absolutely ruled out. Apparently no such phenomenon has been observed, and this market is, obviously, not a free one. The market of world currency could be supervised under the law by a sort of, say, World Committee on Market Freedom. In this absolutely free market no group of emitters or sellers of world currency should enjoy any privileges.

4. Is the world currency market civilized?

In a civilized market the rules of the game are decided and observed by all on the basis of a general agreement between all the participants (the sellers and the buyers) without harming anybody’s personal interests. It is quite apparent that in the market of world currency nothing of this sort is being observed. Hence, today’s market of world currency market can not be called as civilized.

In the market of the new world currency the rules of the game should be legally decided and observed on the basis of a general agreement between all its participants (the sellers and the buyers).

5. Can the system of generation and issuing of world currency be controlled by its main user-subjects (countries, companies and citizens) and the world community as a whole?

No, it does not allow itself to be controlled either by any groups of its main user-subjects, or by the world community as a whole.

In this sense the system of issuing of world currency is absolutely uncontrolled. All the main user-subjects of the new world currency (countries, companies and citizens) should have the right to create permanently operational instruments for controlling the generation, issuing and circulation of the world currency with special provision being made for such instruments in the above-mentioned proposed law. The activity of the issuer should also remain within the control of all the three branches of power: the legislature, the executive, and the judiciary.

6. Is the system of generation and issuing of world currency answerable to its main user-subjects (countries, companies and citizens) and to the entire world community? The issuers of world currency are not at all answerable either to any of its main user-subjects or to the world community as a whole. In this sense the issuers of world currency are absolutely irresponsible, and this is the reason for the global economic crisis.

All the legitimate and lawful issuers of world currency should be fully answerable to its main user-subjects (countries, companies and citizens) and to the entire world community for their actions (or inactions). This is legally and practically possible only through a body like World Currency Arbitrage.

7. Is the system of world currency effective and result-bearing, that is to what extent the results of its work are in consonance with the goals of development of mankind and the world as a whole?

Practical results of working of the system of world currency have now put under threat the very existence of the prospering world capital and a stable world development (as well as the existence of a uniform world currency). This is clear shows that the present system has proved to be totally ineffective.

Actions of the issuers of the new world currency should fully and adequately correspond to the key goals and values of the development of the world and mankind. The practical results of the working of this new system of world currency should be fully in consonance with the highest goals and objectives of sustainable development and prosperity. These principles should form the basis of the entire system of new world currency, and also of the system of regular measurement and correction of its efficiency.

Honest replies to these seven simple questions make the question of suitability of the existing world currency to the challenges of the new century purely rhetorical.

From the middle of the last century our world has undergone radical changes, and the tempo of these changes is ever increasing day-by-day. The essence of the mechanism of generation and circulation of currency which is being used as world currency has remained just unchanged, and the tempo of its updating has miserably failed to cope with the tempo of changes taking place in the world. In other words, the system of world currency became clearly and irrevocably obsolete long back, and this has been proved by the global world crisis.

The entire mechanism of the new world currency system should be built up on the basis of a special system of anticipatory monitoring of future challenges of the century, the world and the mankind and on the seven simple principles mentioned  above. Only then the new system of world currency can always remain up-to-date and faultless, and be a productive source of sustainable development of the world and prosperity of the whole mankind rather than being a source of global world crises.


From where and whereto are we going?

To begin with, let us remind ourselves that till the time of the present crisis the real engine and heart of the Old World was the world capital which was based on the world currency that was suffering from global sevenfold genetic defect.

We are in the habit of calling this world as world capitalism. Though we very well understand, it would be more appropriate and fair to call that defective capital as “defectal” because it has been operating with a defective currency.

Recently hundreds of billionaires all over the world have themselves practically experienced the real defects of their illusory capital when just within a few months their "the defective capital" suddenly came falling down ten times. Now they themselves clearly see that it is “defectal”, and not “capital”.

The engine and heart of the development of the future New World would be some radically new world capital. To be more precise, we can say that it would be a self-growing world wealth based on a new faultless world currency. We may have to search for some other, more appropriate name for this radically new world wealth.

The ancient Greeks designated the highest stage of development by the beautiful word "аcме". Our descendants will in future pick up a correct name for this new fault-free and higher form of currency. But now it is quite clear that the new name could include this highest quality, i.e. "аcме": for example, acme-capital, or  "acmetal". And then this future set-up of a radically New World driven by such a radically new world "acmetal", could appropriately be called as ‘akmetalism”, and not capitalism.

A rather unconventional approach of this kind with a new designation for the new stage of development of the future world will provide us with a practical opportunity to prepare ourselves in a better way when we will be faced with this new stage of development, and we will be able to comprehend and understand more deeply the real essence of future updating of the world. And the most important thing is that we shall have in our hands a new tool of our updating and navigation with the help of which we will be able to practically determine and identify the New World so that we shall find ourselves in a position to perform our tasks confidently.


What is our path to the future?

We may use “transition” as the keyword for defining the new qualitative stage of the growth of our world where we have just set in our foot. Accordingly, this new kind of the transitional world wealth based on partially faultless world currency, may be, for the time being, called by a different name, say “transital”, rather than  "akmetal". Similarly, the period of transition having a world financial infrastructure of a new type and quality may be designated as "transitalism", rather than calling it "akmetalism". The main task and mission of this stage is to prepare conditions for harmless transition of the whole world from the old seven-fold defective currency to a new seven-fold faultless system of world akme-currency.

The most important thing is to remove (or at least to redistribute) the world load from the old defective system of world currency by transferring it to the system of regional and continental Issue Centres for regional supranational inter-state currency accounting units.

The laws that operate in the world as a whole are applicable at regional and continental levels too. Just as no national currency can effectively function as world currency, similarly at the regional level, instead of national currency, only a supranational interstate currency-unit of account can function as world currency which is issued by a supranational interstate issue centre.

In this connection it may be mentioned that as far back as the year 2003 Kazakhstan had taken the initiative within the Eurasian Economic Community (EurAsEC) to introduce a uniform supranational interstate currency-unit of account which was proposed to be named as "altyn".

The process of working out and creating regional supranational interstate units of account is not new. Such a process has been going on in the world for several decades. The first beginnings were made in the form of Ecu - the European currency-unit of account which, in due course, was completely transformed into a full-fledged European Supranational Currency – the Euro.. We notice that similar processes are presently going on everywhere - in Asia (Acu - Asian Currency Unit), in the Persian Gulf region (Dinar or, probably, Haliji or Juman), in Latin America (Sucre– acronym of Sistema Unitario de Compensacion – under the organization ALBA).

Such tendencies are also noticed in the African continent where preparations are being made to introduce Afro.

All these processes leading to integration of regional currency are, in essence, important landmarks in the development of the regional centres of "transital" worldwide. It is interesting to note that preparations for introduction of regional supranational units of account had started in different regions of the world long before the beginning of the present global crisis. As a matter of fact, this was the beginning of creating kernels of development of regional-continental "transital" on the basis of the formation of regional issue centres of supranational transitional currencies. In other words, preparations were already being made for the next stage of self-updating by forming regional centres of issuing of supranational transitional currencies, long before the world was plunged into the present global crisis.


Noah’s Ark of capital

Any subject or owner of the old "defective" capital will be able to quickly grasp his position in this world by the following extreme point of view: today the whole of our world is slowly but surely plunging into the abyss of the great deluge of global crisis. In such a situation "transital" is a sort of Noah’s Ark of capital for rescuing the assets from this great deluge of global crisis. Therefore, all the concerned persons would like to think of converting their assets into "transital before it is too late.

Only this Noah’s Ark of capital can save the assets and deliver them fully and safely to the New World "akmetal".

Kazakhstan together with its partners of regional and continental integration (CIS, EurAEU, CAU and SCO) has been a part of the global trend of the first quarter of the twenty-first century which is reflected in the formation of regional integration organizations. All of them with different degrees of their preparedness have the potential to become regional zones of transital having their issuing centres for interstate supranational currency-units of account.

Of course, Kazakhstan together with its partners in EurAsEC and SCO is ready to create step by step and gradually favorable conditions for creation of a Regional Issue Centre of a new type of currency which could take upon itself the functions of a Eurasian Supranational Unit of Account and it could be called as ESUA which is an abbreviation of the above-mentioned unit of account.

Owing to the special and unique composition of its issuers (the counties of EurAsEC, SCO, and nearby India and Pakistan) such a currency may be able to simultaneously adjust itself very closely and organically with the European zone of Euro, as well as with other regional zones of supranational currency-units of account. The highly favourable geographical location of the region and proper consideration of the interests of regional and continental transitals could provide a unique opportunity in the future when for this purpose, on the basis of ESUA, objective preconditions for creation of a new intercontinental transitional currency will have been created and which will bring us closer to the future world "acme-currency".

However, at present, when we are facing global world crisis, even this appears to be insufficient. The reason behind this is that together with the formation of a worldwide network of the regional-continental centres in the form of Transition (they should take over the burden of the defective system of the old world currency) all the world leaders should make parallel preparations for future transition of all the countries of the world to the new faultless system of new world acme-currency which is going to become the nucleus and heart of the future "acmetalism".


The plan of radical updating (PRU)

Our world of Transition does not have much time and resources for making preparations for this historical transition. In fact, planning and construction of a new Noah’s Ark of capital – the "transital" – should have begun earlier. Unless all the leaders of the world right now start preparing for practical transition of the whole world from an era of partially defective "transitalism" to the future world of "acmetalism", the question of a sustainable development and prosperity may have to be postponed for several decades.

These questions should form the agenda of all the leading political and economic bodies, the Summits and world forums - the UN Security Council, the Special Session of the United Nations, "G-8", G-20, the World Economic Forum at Davos, and so on.

In order to start the practical solution of this problem a clear-cut Plan of Radical Updating needs to be prepared taking into consideration all the above-mentioned approaches. We have to understand that in the present time no organs, organizations or Summits can be considered productive and fruitful unless they themselves develop and put into practice their plans of radical updating. This very updating as a transition from the old world "defectal" to the new world "transital" should become a global trend of the first quarter of the twenty-first century.

However, any such plan of updating of the subject of any level or region, as also of the world as a whole, cannot prove to be effective if it lacks the key points of transition from the old defective system of world (as well as regional) currency to the new stable and effective transitional currency.

Such a plan of updating should also propose key technologies for conversion of old unstable and defective currency into the new system "transital"; it should also work out a scenario for creation and development of regional issue centres of supranational regional transitional currencies. In order to make the plan effective, it has to provide for concrete measures for extending help to all the key political and social subjects of all levels in the matter of transition of the nations, the peoples and the countries from the old set-up of defective capitalism to new the type of set-up of "transitalism".

Radically new approaches to the analysis, understanding and practical self-updating of the world at the time of global crisis, as stated above, can serve as a uniform basis for the presentation, discussion and practical solution of such issues at all levels and in different bodies in a uniform systemic, constructive and positive manner.

Besides making such conceptual contribution Kazakhstan can also make several other most diverse organizational contributions for solving these problems.

Kazakhstan is ready to practically organize international forums at the highest level for coordination of efforts of all the regional and continental centres and subjects of "transital" of the whole world. We can carry out joint research and planning of global and applied scenarios concerning the successful and timely completion of this initial stage of world "transitalism"; and we can also jointly calculate the trajectories of practical transition to the future world of "acmetalism".

By creating a Eurasian centre of transition, the EurAsEC and SCO countries could become the initiators of accelerated development of transitional currencies and "transital" not only in Eurasia and other continents, but also all over the world. For example, the countries EurAsEC, and, also probably, the countries of SCO could prepare and push forward in a coordinated manner a global initiative on the Plan of Radical Updating in the international and world bodies, organizations and forums.

It is rather interesting that in the beginning of January this year in Paris at the Summit meeting "The New World, the New Capitalism" the leaders of the European Union discussed similar problems, but in a slightly different perspective.

Is it not possible for the trio of EurAsEC, SCO and EU to examine the possibility of a world-wide discussion and pushing forward the initiative on Plan of Radical Updating? Judging by the materials of the discussions held in Paris, and also of such discussions at similar forums in other countries, it can be said that we all are speaking approximately in the same language and about the same problems, even though some of us may be living in different continents.


A unique experience of updating

With every passing month and every passing day the growing global crisis is opening up before us more and more unique and surprising opportunities of self-updating, and at the same time it is leaving us with less and less time for practical realization of these rarest opportunities.

Never before has our world got such unbelievable possibilities of self-updating which it could put into practice for the sake of its future.

Certainly, while talking about the possibilities of the role of regional integration organizations in overcoming the present global crisis, we do not have the right to leave out our national governments and exrmpt them from the responsibility of their duties and for their sluggishness? During the last two decades the CIS countries have earned such a unique experience of transition and updating which other countries of the world may not be possessing. They should fully make use of their previous experience of “crisis”, or to be more correct, the experience of “crisis management”. Like all other newly independent states, Kazakhstan had to time and again go through most trying periods. After the disintegration of the Soviet Union we have practically experienced the pangs of updating, and have passed through extremely difficult and painful reforms. We were faced with the problems which appeared to be beyond solution. Finally we have come out victorious. Why can’t we do something similar now also to become victorious once again?

It is all the more possible because now for this purpose there are more resources and opportunities. More than ten years ago we had started to build up a special National Reserve Fund out of the revenues coming from export of raw materials. This Fund was created for the development of human dimension, for savings for future generations, and for the purpose of stabilization in times of crises. And now this Fund is functioning in full measure by providing adequate support for the implementation of basic economic and social programmes in a perfectly dynamic manner.

It is absolutely clear that it is beyond the capacity of any one to singly cope with global problems of the present times. That is why we have always advocated integration, global as well as regional integration. And this is one of priorities in the direction of our anti-recessionary measures.

That is the reason that we are now engaged in giving a practical shape to the initiative of preparing the Plans of Radical Updating at global, regional and all other levels.

This will give a chance to the whole world to pass through the transition period faster and more effectively. At the same time adequate preparations must begin for stepping into the New World of "acmetalism" which has become inevitable for the mankind, irrespective of by which name it is going to be called finally.


Who needs it and for whom is it beneficial?

On the basis of this global initiative of the Plan of Radical Updating the United Nations could begin working on reexamination and significant revision of the Agenda of the Third Millennium. This is extremely necessary in the interests of ensuring timely and qualitative transition of the world and mankind from the old world set-up of "defectalism" through the new set-up of "transitalism" to the radically new set-up of "acmetalism".

The PRU is required for all as a practical navigator on the path of overcoming the crisis. It is a necessary requirement for all the subjects of world development - the countries, the multinational corporations and the international organizations - for the planning and realization of their effective self-updating.

It is also required by all the subjects of real economy – the state and private enterprises, firms and organizations - for practical assimilation of the principles of world "transital" based on the new world transitional currency.

The transitional world needs radical innovations not only in science and industry, but also in the spheres of world finance and currency. The PRU will give to all the subjects of world currency and finance system a practical tool for coordination of efforts on innovative development of new world currency and finance infrastructure and architecture.

The PRU can bring countries and people closer to each other, rally them together on the basis of common interests of prosperity; it will promote creation of new mechanisms of a safe and secure world. It will have a very strong financial and economic foundation built up on a new least defective world currency.


The new key market of the world

For almost half a year all the leading world subjects of different calibre, level and quality have been trying to look for and formulate different kinds of prescriptions for coming out of the crisis. With their efforts a new global, but very specific market has almost been formed. It is the market of global prescriptions and plans of relief from world crisis, the market of "keys" for taking out of the crisis. At present the demand for this market far exceeds its supply. Apparently two sectors - wide and narrow sectors - have been formed there.

The wide sector is the sector of decisions and prescriptions concerning superficial, cosmetic repair of world currency and finance system. The narrow sector is the sector of global prescriptions of radical treatment and correction of deep genetic defects of our world. Our proposed Plan of Radical Updating is a global prescription for radical treatment of global world defect. The PRU can be called a new commodity of the narrow sector of the world market of "keys" for taking out of the crisis.

The Plan of Radical Updating is, possibly, the first global key to the solution of the problem of radical updating being faced by us due to the world recession. While “transiatl” which is under formation is really the Noah’s Ark of the capitals, the PRU being proposed by us may be considered as the first outline for construction of a new Noah’s Ark. If the first Eurasian Centre of “transital” is created in the near future, then it could quite possibly also become the first centre of this new rescue building.

Such an approach is highly beneficial for the whole world. The whole world has together plunged into the global crisis, and it is the whole world which can turn this global Key to take the world out of this crisis.

All this depends only upon us.