 |
 |
 |
Home | SchNEWS OF THE WORLD Argentina SpecialUnder The Wheels Of CommercePayback TimeLast year, as the country slipped into total crisis and it looked likely it was going to default on its eternal (sic) debt, IMF conditions dictated that the government should make massive cuts in public spending. State workers’ salaries were cut by 13%, as were state pensions, in yet another round of austerity measures which helped to push people’s patience right to its limit. Argentina has paid and paid for its addiction to IMF ‘assistance’, and it looks as if it will be paying for years, in ways it never thought possible. The deployment of Argentinean troops to the Gulf War and to Bosnia are examples of favours called in by the USA, as is the training of Colombian airforce pilots in Argentina. US and Latin American troops, commanded and financed in Washington, have carried out exercises in Argentina without Congress’s approval, and despite this being in violation of Argentina’s constitution. Argentina is about to vote, for the third time, against Cuba’s
human rights record at the UN, this time as a proposer of the motion.
It has promised Washington to ‘work for the liberty of the
Cuban people,’ to the disgust of the Argentinean people and
Fidel Castro, who has yet again called the government ‘yankee
boot-lickers’. Another member of the Cuban government expressed
sympathy for Argentina, locked in to ‘carnal relations’
with the USA, for the way the USA is ‘humiliating and pressurizing’
Argentina while denying it the funds to resolve the situation imposed
by ‘the dogmatic imposition of the neo-liberal model’. Silver TonguedBuneos Aires - once known as ‘the Paris of Latin America’ has now sunk - along with the rest of Argentina, into what has been called Latin Americanisation. “It used to be the jewel in the crown, but now has all the same problems of poverty as the rest of the continent.” So who’s made us cry for Argentina? International Monetary Fund, come on down. Argentina has for the past two and a half decades been the IMF’s star pupil. It sold off everything, down to its “grandma’s jewels,” with foreign firms taking over key sectors of the economy and the utilities. Companies like French multinational Vivendi Universal, which in 1995 bought most of the water system before sacking staff and raising prices, up 400 % in some areas. Or the Spanish oil company Repsol, which snapped up the state-owned YPF, sacked thousands of workers and turned the only oil company in the world not making a profit, into a money-spinner estimated to have taken $60 billion out of the country. Or the Spanish Telefónica, which bought up most of the privatised telephone system for a bargain basement price, then whacked up the prices to way above those paid anywhere else in the world and made a tidy profit of $2 billion in its first year. Argentina obediently deregulated its markets and tried to make its workforce more ‘flexible’ (meaning you work longer for less pay.) It has jumped through all the IMF hoops, with promises of prosperity at the end of them, yet now finds itself with a $150 billion dollar foreign debt, with 30% of its GDP going every year to pay off interest payments alone before December, and is still paying part of it despite having defaulted. Loan SharksThe first IMF loans were to the military junta in 1976 and since then, this ‘debt’ has been paid off by the Argentinean people many times over – and not just in pesos. Argentineans used to call their country the bread-basket of the world, and say that in a country bursting with natural resources and a huge agricultural sector, nobody ever went hungry. But now 40% of the people live below the poverty line and up to a hundred die every day from poverty-related illness, with food parcels and medicines now arriving from Spain and neighbouring Brazil. In a ruling two years, ago a federal judge summed it up. “Since 1976 our country has been put under the rule of foreign creditors and under the supervision of the IMF by means of a vulgar and offensive economic policy that forced Argentina down on its knees in order to benefit national and foreign private firms.” Despite the economy being in free-fall, two documents leaked to investigative journalist Greg Palast show that, for the deluded economists at the IMF, what the country really needed to get it back on its feet was even more structural adjustment! So it’s more cuts for state pensions, salaries, unemployment benefits, education and health, all of this ensuring that the burden of this so called ‘adjustment’ falls, as ever, on those who can least afford it. Anoop Singh, leader of the IMF delegation currently in the country, admitted it was “the worst economic crisis any country has had.” Then promptly listed a new set of demands Argentina must implement immediately before they even get to see how much ‘aid’ they’ll receive. In a veiled threat he commented, “without an IMF agreement, it will be very difficult for Argentina to recover.” Since 1983 there have been nine IMF stabilisation plans in Argentina, ‘helping’ the country out. But it’s not just the IMF that wants more adjustment. Other financial institutions are still licking their loan shark lips, saying Argentina’s crisis should not be seen as an obstacle but as an opportunity because, the reasoning goes, the country is so desperate for cash it will do whatever the IMF wants. “During a crisis is when . . . Congress is most receptive,” explained Winston Fritsch, chairman of Dresdner Bank AG’s Brazil. Meanwhile, a couple of Massachusetts Institute of Technology economists writing in the Financial Times, go even further. “It’s time to get radical…(Argentina) must temporarily surrender its sovereignty on all financial issues . . . and give up much of its monetary, fiscal, regulatory and asset-management sovereignty for an extended period, say five years.” When Greg Palast interviewed the former chief economist, Joe Stiglitz - fired by the World Bank for questioning its economic wisdom – Stiglitz told him about ‘IMF riots’ “Everywhere we go, every country we end up meddling in, we destroy their economy and they end up in flames.” He went on to tell Palast that the IMF even plan for riots, because as the people revolt, capital drains out of the country (helped by IMF inspired abolition of currency controls) and whoever’s left in charge has to go begging back to the IMF for more money. They don’t mind handing some out, as long as the country agrees to even more demands, and they turn a blind eye as politicians fill their pockets in return for their compliance. On Tuesday the IMF did just that, agreeing to give Argentina $5 billion of its promised, frozen $22 billion loan programme. And where will that money go? To where it’s really needed – paying the interest on the debt. The debt gets bigger, the cuts get harsher – and the money doesn’t even have to leave Washington. The people of Argentina know the IMF aren’t there to help them. The only people the IMF dish out their dollars to are those who in their view really need it; the banks and big business, the rich and the powerful. For them, the Argentina experiment has been a stunning success – Shame about the people though, eh? * Greg Palast’s ‘The Best Democracy Money Can Buy’
(Pluto Press, 2002) www.gregpalast.com
|
And there’s more to come for Argentina. On January 12th, the
New York Times reported US Secretary of Defense, Donald Rumsfeld,
as saying the US might be willing to financially assist the Argentinean
government, if they were permitted to install military bases in
Tierra del Fuego, the southernmost tip of the Americas. The governor
of the province has secretly authorised bases, where the US will
be allowed to detonate underground atomic bombs – but only
for ‘peaceful ends’. So that’s alright then.