(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
Louis Proyect
Marxism list: www.marxmail.org
