George (below) and Keith make it all sound so easy and antiseptic, but of course, there are people and history involved. Argentina is only some 15 years from the "Generals", and the Mothers of the Disappeared are still haunting the Plaza de Mayo--the social chaos and "sorting out" will almost certainly be done within a context where those forces are allowed some sort of re-emergence.
What was striking to me as I visited for a short time, was how "developed" everything looked--rather more like the South of Spain than any part of the Developing World that I've visited in the last few years and so all this is happening in a country where the resemblance to Canada is more than passing. One is immediately called to the question, could it happen here, and if not, why not? What is also so striking is the absence of useful alternatives--something which is particularly destabilizing since the status quo is not an option. The free market Neo-Liberal folks have done their stuff for the last ten years and what we see is the result. Of course, the problem was the political culture of corruption and so on, but surely the folks in the IMF have some cultural anthropologists/political analysts (even people who read Time Magazine regularly) on staff. That hasn't changed--as I recall in fact, one of the arguments for marketizing everything is so as to eliminate corruption by moving all transactions into the open market. But what is of equal interest is the apparent lack of any useful ideas from the critics of Neo-Liberalism--okay guys and gals post-Seattle/post-Genoa/post-Quebec City--we have a real life system break-down precisely as is implicit in some of the more intelligent anti-WTO critiques. So now what? Does Argentina go it alone, cutting its ties with the international money lenders, developing a monetary script that only has value internally? Hmmm, that might have worked in the early 19th century but apart from selling steaks and home grown vegetables, my guess is that not much economic activity will survive for very long in the absence of spare parts, product replacements, international telephone connections (or would those be kept in dollars as per most of Africa) and the normal ebb and flow of international inter-penetrations. Supply chains for most advanced products are now mostly internationalized (which means in practice the design/development/financial control rests with the hub and the sourcing assembly is globally distributed on a least cost supplier basis). Not many Toshiba's, GM's, or Nokia's based in Argentina at last reckoning. Does Argentina re-nationalize--hmmm, what does it renationalize? Probably a good idea to start with the roads, but without foreign capital and with only one road system that might break down really quick and any benefits that might accrue from making the roads re-accessible to the population would be too long term to matter much before things degenerate into barbarism. But then what? There are those pesky supply chains again. Quite honestly, I don't have any answers, and so I'm personally fascinated to watch this play out and hoping that my friends and the people in Argentina don't have to live through an immense suffering to help the rest of us figure out where it is possible to go from here. Mike Gurstein -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]] Sent: December 30, 2001 7:40 PM To: [EMAIL PROTECTED] Cc: [EMAIL PROTECTED] Subject: Re: LA Times: Argentine Crisis May Prompt the IMF to Change Ways Argentina problems. Mr Gurst's posting of an article and comment Without the dollar/peso link that makes debts denominated in dollars, the usual course would be to arrange a restructuring of debts - some portion forgiveness, some redefined as to amount or term, and some extended in time. But not only the link to which Mr Gurst refers but also the general concept of sovereign immunity - that the IMF cannot do more than privately suggest what may be the right course to follow in budget and economic policy - is standing in the way - - - of what? If the IMF says 'NO' the country goes down the tubes with, perhaps, political upheaval; if the IMF says publicly 'You should not do THAT', then there maybe political upheaval, particularly if there is an election on the immediate horizon and the internal cognoscenti and outside world will take their money and run, leading, again, to upheaval. These options, however well disguised, seem to me to be the ones available so long as the IMF is constituted as currently. Owned by all countries and using a collegial vote with few abstentions, all countries have an interest in NOT rocking the boat - the vote, here - because they may become needful in the future. The institution does NOT work like a normal lender, everybody, in due course, will get some jam if they need it. But the proper approach is, in my mind, 'jam yesterday; jam tomorrow, but no jam today' (see! We all can learn from the classics!). On the other hand, let the country crash, have its political upheaval - with due cautions not to export their troubles through war on others - and let the mess sort itself out. Perhaps those with selected dollar debts might get some accommodation, otherwise they better not travel to the countries where they owe money. The owners of the dollar debts outside of Argentina can either write them off and take a local tax loss, or sell them for a fraction of their current value. How about all this? ___________________________________________________________ hosted by Vancouver Community Network http://www.vcn.bc.ca
