(Although Roger Burbach explains Nestor Kirchner's taking on the IMF in terms of Piquetero pressure, it is of some significance that he (and they) give him critical support. This probably reflects a willingness to engage with reality, now that a number of Latin American heads of state are showing some independence to one degree or another. This is a healthy turn in my opinion. Burbach is an interesting figure. His "Fire in the Americas" was a brilliant attempt to apply the lessons of the Sandinista revolution to US politics. I was so impressed with it when I read it that I bought ten copies and sent it out to people I knew from the SWP. I think that Roger became somewhat disoriented in the 1990s under the influence of a kind of Chiapas postmodernism that was sweeping the left. At the core of this trend was an almost anarchist distrust in the state, accountable no doubt to the collapse of the USSR. In a way it reflected the disillusionment that set in after the defeat of Daniel Ortega in the 1990 elections. Roger lost the use of his legs after a terrible accident while surfing in the Pacific off the coast of Nicaragua, but this has not stopped him from being an effective spokesman for the Latin American revolution in all its forms.)
Argentine President Faces Off With IMF by Roger Burbach Znet, February 20, 2004
Buenos Aires. President Nestor Kirchner of Argentina is emerging as the leading nemesis of the International Monetary Fund and the private financial speculators in South America. Assuming office in May 2003 with less than a quarter of the popular vote, he now enjoys 85% support in the opinion polls due in large part to his determination to take on the neo-liberal policies that lead to the country's economic collapse in 2001-2.
During the crisis Argentina defaulted on portions of its international debt that stands at over $140 billion. Kirchner has now thrown the G-7 nations, the leading capitalist countries, into a quandary with his declaration that the private investors who bought about $50 billion in government bonds in Argentina in the 1990s will receive only 25% of the face value of their bonds. Kirchner argues the bondholders gambled on Argentina during the heady days of the corrupt, neo-liberal government of Carlos Menem, when some bonds paid upwards of 30% annual returns. Caring little about what these exorbitant rates meant for the Argentine people, the Kirchner government argues the bondholders should now reap the results of their speculative adventures that helped fuel the boom and bust of the Argentine economy.
During 2002 and 2003 the IMF, the World Bank and other international financial institutions lent new funds to Argentina in hopes of keeping the country from opting out of the international financial system. There were even signs that some of the lending institutions were backing off from their history of enforcing dramatic cutbacks in basic social programs and balancing the budget on the backs of the poor. In early 2003, the Inter-American Development Bank lent $1.5 billion to help shore up the country's social programs, including the special government payments of about $50 a month to the heads of household who were unemployed. Due in large part to the government's decision to insist that the domestic economy came first and that social spending needed to be increased, the country's economy in 2003 grew at 7.5% percent after having contracted by over a quarter in 2001 and 2002.
However just last week the finance ministers of the G-7 nations who meet in Monterrey, Mexico, insisted the government must "be more flexible" in its debt renegotiations with the private bondholders. Beholden to the financial and political dictates of the G-7 countries, the IMF and the World Bank are both pressuring the government to change its approach. The IMF called the Economics Minister, Roberto Lavagna, to Washington to renegotiate the release of a loan for $8 billion later this month while the World Bank has already held up a loan for $5 billion that was scheduled for release on February 11.
The government however is giving few signs of budging and has hinted it may even suspend debt repayments to the IMF and the World Bank. On February 4, Lavagna released a report pointing out that these institutions continued to drain the country of financial resources even during the midst of a severe economic crisis. In 2002 and 2003, they lent $9.3 billion to the country while collecting $16.6 billion in old debt. In other words due to the repayment demands of institutions like the IMF and the World Bank the country suffered a net loss of over $7 billion.
full: http://www.zmag.org/content/showarticle.cfm?SectionID=41&ItemID=5014
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