By Amyra El Khalili *
No problem can be solved by the same state of consciousness that generated it. It is necessary to go further. I think 99 times and discover nothing. I stop thinking, dove into a great silence and the truth is revealed to me.
The international financial system is in crisis, it faces serious credibility problems due to fraud and corruption reported since 2008, with the subprime scandal, with the bankruptcy of the Lehman Brothers bank, pyramid operations, with the dismissal of bank executives for manipulating the calculations of the Libor rate (2012), among other speculations.
The Peoples' Summit, a parallel movement to the RIO + 20, has not positioned itself against this neoliberal model exclusively for ideological reasons, but for facts proven to exhaustion and its tragic consequences against indigenous peoples, traditional peoples, peasants and vulnerable people, and against environmental degradation and devastation.
If it was that neoliberal model, rooted in savage capitalism, that was responsible for the environmental crisis and social exclusion, how can that same model be the solution to the problem?
Theorist Roger Babson, in September 1929, set the famous prediction - "sooner or later the crash will come, and it could be tremendous" - and has been ironic, discredited and attacked by the Wall Street guardians. In October 1929, the newspapers highlighted this news: “Bankrupt! An unstoppable wave of sales plunges the stock price, causes panic on the New York Stock Exchange and leads millionaires to bankruptcy. Where is the economy of the richest country in the world going? "
The economist Luiz Gonzaga Belluzzo, in an article "Geringonças teóricas" (theoretical gibberish) (Carta Capital, 2012) analyzed: "In the 1980s and 1990s, in academia and in public debate, few were those who dared to disagree with the virtues of liberalization and financial deregulation, presented as the most efficient way to allocate resources. Almost in unison, the economists accused the death of the old age and inefficiencies of interventionist policies in the credit and capital markets ”.
When gamblers sign contracts with securities and merchandise dealers, they agree with the clauses of the contracts, including that they know they are trading in risk markets. There is no way to argue afterwards that they have been "cheated", as the contracts are rigorously standardized to avoid any possibility that financial agents suffer possible losses.
In derivative markets (asset derivatives), operations are instantaneous and, in many cases, to minimize risks, they need to work (buy and sell contracts) with other assets. Then the complex financial gibberish arises.
The derivatives market in Brazil is relatively new, thirty years old, started in 1986 on the Mercantile and Futures Exchange (BM&F). I started with the first brick of the BM&F until I reached the environmental asset markets. Today I am extremely critical when it comes to the financialization of world economies triggered by derivatives.
Financing is part of an economic policy that allows you to start business, buy or produce goods and services, paying your debt in the long term. Unlike the economies of developed countries, in this Latin American and Caribbean continent, we are faced with high interest rates, considering that here the calculator adds, decreases, multiplies, divides and exposes, that is, it does five mathematical operations. We use compound interest when the capitalists' calculator on the affluent side of the planet uses four operations with linear rates (simple interest).
This is the principle of "financialization" - add to that account other artifacts, such as insurance rates, risk analysis, portfolio consultancies, brokerage, stock market fees, accounting, taxes - and add to all that the rates of interest with the alphabet soup. That is what they call “: financial management of the thing”. In this way, the cost of financing is very expensive to sustain the entire industry built around “financialization”, without counting on the structure of credit supply, validation, certification and consultancies for pyrotechnically complicated environmental projects.
Finally, indigenous people, riverine peoples, quilombola, poor and vulnerable have no competence to take care of what is peculiar to them: their natural environment. Who is prepared for the difficult task of doing the “financial management of the thing”, with the apparatus around these new ways of guaranteeing the contribution of resources and deposits to implement such public environmental policies, in addition to the bankers and their indicated consultants and Researchers, manipulated with their conclusions by commission, are some NGOs.
The “financialization” demonstrates the complexity with which socio-environmental financial projects are developed vehemently defended by the doctrine of the Green Economy as the only alternative to save nature from human profits. And for that reason it was also harshly criticized by the Peoples' Summit during the RIO + 20.
There are reports from specialists in international finance, such as the Munden Project, which concluded that, among other factors, the intermediary agents are the greatest beneficiaries of the carbon market replicated with REDD (Reduction of Emissions from Deforestation and Degradation) and its variables, much more than the communities to be served with the protection of nature. There are various reports from the World Movement for Tropical Forests (WRM) that didactically clarify how the carbon market in Northern countries and its consequences for local communities and forest peoples works and why it is controversial.
Interpol published, in June 2013, the “Guide to carbon crime”, an alert guide to investors about fraud and stelionates in emerging markets for environmental assets. Among the most frequent crimes: fraudulent manipulation of measurements to obtain more credits; sale of credits that do not exist or that belong to other people; disclosure of false information about potential environmental and financial benefits; fiscal fraud; Internet credit theft and money laundering.
The theft of indigenous lands must also be considered as an evolution of the engineering of crime against peoples and the environmental and cultural heritage of humanity. The Redd Monitor site tracks and records the most controversial facts that proliferate with the voracity of making easy money through these financial mechanisms.
Therefore, when refuting the critics of the financial package, which they call "Payments for Environmental Services" (PES), with their correlated economic instruments, arguing that they do not know (the critics) how things work and do not understand verses at all. nothing, they really try to hide, like the ostrich that buries its head, the size of the masterful diamond that is announced with the deception of the Green Economy.
There are also reports that show the unhappy results of these controversial public policies adopted by some governments, running over the stage prior to legislating, that is, consulting society to find out whether or not it agrees with the public policy in question. I mean, the legitimate public consultation. Not that practice that usually convene last minute meetings and, preferably, with the conclusion already duly agreed with some NGOs, with the territories to be exploited previously combined and the values correct.
Afterwards, the disguised people can only agree and then, beware of whom to criticize! He does not know anything, he does not understand anything or he did not participate in anything. On the other hand, the well-known profiteers of the financial market call the critique of "conceptual inconsistency", purposely confusing one thing with another through the practice of surreptitious conceptual siege. When they appropriate the ideas of others, they leave them empty of their original content and fill it with spurious content.
But please, let's be honest: the carbon market has become so sophisticated that it inspired, in tow and in the same molds, the formation of other markets, such as compensation, legal reserve, credits to receive, liabilities turned into assets, among other impressive creatives. Complicated thing even for those who know in depth the commodities and derivatives market. It seems very intelligent, but we must not be deluded: it is a “cover-hole” of the losses suffered in other international markets. To try to contain the financial bubble triggered by subprime and derivative operations, they are looking for new ways to attract resources.
There are many companies that sell carbon credits and offsets from areas of Brazil and all of Latin America and the Caribbean abroad. The Amazon biome, in its entirety, is the most coveted for the attraction it exercises in the minds of foreign peoples and potential land investors, for its forest wealth, for biodiversity, for minerals, fresh and underground waters. There is suspicion that the millions of hectares offered abroad, it is probable that some entire states have been sold, without exaggeration, with only accounting and delivery remaining.
This type of business is called a “short sale”. It is when it is sold in the commodities and derivatives market without having the asset for future delivery. Then you run to buy in the spot market (cash) to honor the operations. When that happens, the movement is called a corner (means to corner). The seller (short) is forced to buy for the price that is on offer in the market: likewise, he cannot find liquidity to buy what he sold without having it to deliver.
At the same time, some governments, more concerned with elections than with the risks and disastrous results of these agreements, continue to do so with international financial institutions and foreign companies. This is how a kind of “environmental subprime” is produced: putting debts, credits, both good and bad, in a single package, transforming liabilities (pollution, chemical waste, toxics, among others) into environmental assets and putting the account of the “Receivable” (to be received) for future generations to pay.
It is not by chance that the Brazilian Constitution is being dismantled to make this offensive on the land viable, while at the same time military bases of imperialist powers are being installed on the continent and conflicts over land possession proliferate with confrontations and assassinations of activists, community leaders and resistance journalists.
For these reasons, we investigate possible fraud in advertising the sale of these credits. We act to expedite the complaints and continue to collect rigorously from the public power and the inspection bodies, despite those who refute our criticisms. Even because we don't know anything, we don't understand anything and we don't participate in anything!
In this sense –in that of making money with the service of others (nature), militarizing and financializing it, this is how this new “environmental subprime” is produced - that in fact they are pioneers.
EL KHALILI, Amyra. Green Economy: Or subprimeenvironmental. Forum of Urban and Environmental Management (FDUA), Belo Horizonte, a. 12, n. 69, p. 9-11, May / Jun. 2013.
LANG, Chris. INTERPOL: Intangible carbon markets at risk from criminal networks. Access on: Aug 8. 2013. Captured at: May 28. 2017, here
EL KHALILI, Amyra. Environmental commodities and carbon metrics, here. Access on: 17 fev. 2017. Captured on: 17 fev. 2017.
EL KHALILI, Amyra. What is meant by financialization of nature? here. Access on: Apr 29. 2016. 2017.
* Collaborator of Dialogues del Sur. Amyra El Khalili is a professor of socio-environmental economics and editor of the Movimiento Mujeres por la P @ Z! and Alianza RECOs - Community Cooperation Networks Without Borders.