Russian anti-narcotics chief Viktor Ivanov Invokes Glass-Steagall, Calls for New Global Financial Architecture

Russian anti-narcotics chief Viktor Ivanov has again asserted that only through a radical top-down transformation of the current global financial architecture can the world succeed in winning the war against the international drug cartels.

Speaking to the Argentine Council of Foreign Relations in Buenos Aires, Ivanov repeated the assertion he has made before that a Glass-Steagall-type separation between commercial and investment banks is the first step to combating the international narcotics trade and restoring the sovereignty of nation states, to be accompanied by a global system of fixed exchange rates among currencies, and long-term credit allocations for high technology infrastructure development.

Ivanov said:

“There must be a change in the current global financial architecture: in particular, a separation between commercial and investment banks for the defense of credit operations against speculative ones, support for stability in the exchange rates of national currencies, and allocation of long-term targeted credits for infrastructure development. In particular, there needs to be a collective appeal from the heads of state of the countries that are suffering from the drug trade, on the necessity of introducing these measures.”

This new financial architecture, Ivanov declared, must replace the existing world monetary and financial system, which is the main cause for the spread of drug trafficking on a global scale, saying that the current system was built on the ruins of national economies, forcing them into backwardness by sucking their resources and depriving them of the right to sovereign economic development. He identified a three-tiered program by which nations must reclaim this right to the sovereign development of the state:

“The first level is the creation of the infrastructure needed for organizing advanced agriculture, including the formation of stable markets, a low-interest credit system for peasants, technical and technology support for agriculture (scientific and industrial seed-farming, fertilizers, and agricultural machine-building), a system of teaching and training for agronomists and other agriculture professionals, as well as tough protectionist measures to defend peasants who are growing legal crops.

“The second level is the creation of conditions for employment diversification, in order to reduce the portion of families whose welfare directly depends on succeeding in agriculture; in particular, this means forming a national high-technology industrial sector into which the population can be drawn. An example is Malaysia, which has turned from a backward agrarian country into one of the leading high-technology countries in a few decades.

“The third level is the sovereign development of the state, endowed with financial and credit independence. Nations must have the right to sovereign development. The existing world monetary and financial system, which was built on the ruins of national economies and by sucking their resources, is the main reason for the spread of drug trafficking on a world scale.”

Ivanov’s demands for a new global financial architecture echo what he presented last November in a speech to the Center for Strategic and International Studies in Washington, in which Ivanov asserted that the only way to “liquidate global drug trafficking” would be through a “drastic transformation of the international financial system” based on the logic of Glass-Steagall and accompanied by a shift to an “economy of development, where decisions are based on development projects and special-purpose credits”. Both Ivanov and Antonio Costa, recently the executive director of the United Nations Office on Drugs & Crime, have stressed that the current international financial system could not continue to exist without the flows of illegal liquidity associated with drug money laundering, and that the only successful way to combat the narcotics trade is through a complete restructuring of the financial and economic architecture of the world.

For coverage of Ivanov’s speech to CSIS, click here.

For interview with Antonio Costa in EIR, click here.

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