Argentina’s Meltdown is a Result of, and Protest Over, IMF Policy

Yesterday’s front-page New York Times article on the escalating political and economic meltdown of Argentina, like most U.S. media accounts of that crisis in past weeks, was an exercise in deception by omission. The phrase “International Monetary Fund” did not even appear in the Times article, but it’s hard to find a more important factor in the economic disaster now unfolding across Argentina.

01.02.02

Yesterday’s front-page New York Times article on the escalating political and economic meltdown of Argentina, like most U.S. media accounts of that crisis in past weeks, was an exercise in deception by omission.

By keeping its lens tightly focused on the unfamiliar names, institutions, and procedures of domestic Argentinian politics, audiences here are left with little information as to how the crisis developed, why it has developed, and what it means for desperately poor third world countries — and their corporate slumlords — throughout the world.

The phrase “International Monetary Fund” did not even appear in the Times article, but it’s hard to find a more important factor in the economic disaster now unfolding across Argentina.

As in most of those countries, the IMF-preferred policies — slashed social spending, reduced tariffs, reliance on exports, and devalued currencies – – worked very well in enriching Argentina’s corrupt economic and political elites (as well as foreign investors, which was the whole point); but it has made an already tenuous economy worse, not better, for ordinary Argentinians.

As the economy worsened and Argentina’s government was left with less tax revenue, and therefore less money to meet debt payments, it went back to the IMF in August, reaching agreement on a new $8 billion bailout with the usual escalation of draconian “Structural Adjustment Programs” (SAPs) policies attached.

The agreement, and the failing economy it was supposed to fix, sparked massive daily demonstrations of tens of thousands of people, in cities across Argentina, for weeks in August.

That cycle repeated itself by early December, when the failures of August’s Reforms (
http://www.workingforchange.com/article.cfm?ItemID=12529
) had led Argentina to negotiate for another $1.3 billion in assistance.

By this point, Argentinians were fearful that a currency devaluation would wipe out their lives’ savings.

When some mounted a run on banks on Friday, November 30, over the weekend the now-departed Finance Minister responded with a series of extreme and in some cases unprecedented steps: limiting bank withdrawals and movement of money out of the country (by individuals, but not businesses), and demanding that the country abandon its currency entirely and transform itself into the world’s first modern cashless society.

The resulting, enormous nationwide street demonstrations promised to make the country ungovernable. President Fernando de la Rua, his vice president, and his entire cabinet resigned and literally fled the seething masses of the capitol city on Dec. 20.

Then, last weekend, the interim opposition party regime that replaced de la Rua — and that had frozen foreign debt payments and lifted some of his regime’s more onerous steps — also fell.

The Argentinian public’s hostility to just about any potential government is rooted in a number of factors.

Two of the most obvious are: One, its distrust of the rampant cronyism and corruption that permeates the country’s interchangeable political and economic elites.

Two, anger that the imposition of foreign demands — not just for usurious chunks of the country’s wealth, but to dictate domestic economic, social and political policies — will force any government, regardless of its lofty words, to wind up financially crushing its own people to appease New York, London, Tokyo, and D.C.

This is a familiar story throughout the capitals of the Third World.

What is new is that the people of Argentina — the wealthiest country in South America — have fought back, not merely against one or another political party, but against the entire system of foreign debt, resource extraction, forcibly opened markets, and economic colonialism that is steadily widening the gap between rich and poor throughout the world.

In U.S. media, the heavy but largely invisible hands that write the rules of this system of global capital are widely being critiqued for having “overplayed their hand” or “gone too far” in Argentina — like beating your slave and finding out he died, having not properly absorbed the lesson of the desirability of working still harder.

While media accounts here focus on finding a new government for Argentina — with the subtext (as with Afghanistan) being that it can be elected or not, so long as it respects the rules laid down up north — for much of the world, the current system of debt, exploitation, and misery, not one or another set of Cabinet ministers that implements it, is what must be replaced.

This, of course, is precisely the same agenda that has inspired young activists in two years of street demonstrations from Seattle to D.C. to Quebec to Genoa.

The difference between Genoa and Buenos Aires is the difference between being horrified by principles and being unable to feed your children.

It’s the difference between breaking a window at Starbucks and going home, in Seattle, and staying until you overthrow the government, in Buenos Aires.

[ also see related items:

General Strike Against Austerity Measures Paralyses Argentina – http://www.theexperiment.org/articles.php?news_id=1445

80,000 March Against IMF in Argentina – http://www.theexperiment.org/articles.php?news_id=355

Genoa protester tells of beatings, abuse, retinal scans by cops – http://www.theexperiment.org/articles.php?news_id=1443

FAIR ALERT: Media Complacency Normalizes Assaults on Genoa Demonstrators – http://www.theexperiment.org/articles.php?news_id=1444

WTO 101: A dissident overview of the World Trade Organization – http://www.theexperiment.org/articles.php?news_id=927 ]

Author: Geov Parrish

News Service: WorkingForChange

URL: http://www.workingforchange.com/article.cfm?ItemID=12573