from: [EMAIL PROTECTED]
subject: IMFing Argentina
Subject: [CubaNews] imfing argentina
Reply-To: [EMAIL PROTECTED]
1-2-02
ARGENTINA GOT IMF'D
"Why did people riot in Argentina?" my teenager asked.
"Do the International Monetary Fund, Neo-Liberalism and the US
government relate to the situation?"
Well, I began, US government officials have acted as
missionaries for a system known as neo-liberalism, not to be confused
with Jesse Jackson's politics. The neo-liberal order pushes
governments to seek foreign investment as their top priority. To make
their country attractive to greedy, multinational entrepreneurs,
governments cut subsidies to the poor and spend less on social
services. They devalue the currency so workers must spend more hours
working. Say a loaf of bread used to cost $1. By devaluing the
currency, the bread essentially doubles in price meaning the worker
has to twice as many hours to buy the same loaf. Governments also
reduce import tariffs so foreign goods can enter the country without
penalty, which hurts local manufacturing and helps large exporters.
Finally, they privatize public wealth.
"Huh?" She said.
"Governments sell public property like railroads,
roads, utilities, natural resources etc to private companies, who then
exploit them to the max, allow them to deteriorate and then, often sell
them back to the state for much less than they paid.
"Wow," she said. "Who designed such a system?"
The idea dates back to the 19th Century, I said, but
IMF economists revived and promoted this so-called free market model
so that third world countries could "develop" and become like the US
and Europe.
"So," she concluded, "development didn't happen the
way it was supposed to?"
Not in Argentina, nor practically anywhere else in the
third world, I said. You see, the IMF wanted to insure foreign
investors, so they advised Argentine leaders to peg their peso to the
US dollar. But the peso was worth less and by pegging it to a higher
valued currency, they raised the price of imported goods and made
their own exports expensive as well. And they urged ever more
austerity for the poor. Also, one must always take into account
corruption.
"So," she said, "workers sacrificed for an economic
experiment that couldn't work -- except for those who made big profits
by speculating and having their bets secured?"
You got it, I said. So workers rioted and overthrew
the government. Now, a new government has to decide: should they favor
the propertied classes and let them take their money out of the bank
in dollars, or help the working class that thinks it has won what we
call entitlements, like social security benefits, health plans etc&
"What's gonna happen?"
Well, Argentine events will hurt Bush's "Free Trade
Area of the Americas" hallucination and we'll probably see populist
and maybe even fascist like politics in Argentina. One things is
certain, the Argentine workers and middle class are mighty unhappy.
"I understand," she said, "they really got IMF'd."
Saul Landau is the Director of Digital Media and International Outreach
Programs for the College of Letters, Arts and Social Sciences
California State Polytechnic University, Pomona
3801 W. Temple Avenue
Pomona, CA 91768
tel: 909-869-3115
fax: 909-869-4858
http://www.saullandau.org
_________________________________________________
KOMINFORM
P.O. Box 66
00841 Helsinki
Phone +358-40-7177941
Fax +358-9-7591081
http://www.kominf.pp.fi
General class struggle news:
[EMAIL PROTECTED]
subscribe mails to: [EMAIL PROTECTED]
Geopolitical news:
[EMAIL PROTECTED]
subscribe: [EMAIL PROTECTED]
__________________________________________________
