Argentinians are getting ready for another war with the neoliberal forces of destruction as the IMF nightmare is about to return
As Manuel E. Yepe, professor at the Higher Institute of International Relations in Havana, wrote back in 2016, in Argentina, the newly-elected president, Mauricio Macri, moves forward the implementation of his “democratic model” with a brutal demolition of all the advances the nation had made after the collapse it suffered as a result of the neoliberal economic and political crisis from which it had been rescued by the consecutive popular governments of Nestor Kirchner and Cristina Fernandez de Kirchner.
Cristina Kirchner, also made some important moves towards a stronger cooperation with Russia, which was something unacceptable for Washington's hawks. Not only for geopolitical reasons, but also because Argentina could escape from the vulture funds that sucking its blood since its default. This would give the country an alternative to the neoliberal monopoly of destruction.
The US big banks and corporations would never accept such a perspective because the debt-enslaved Argentina is a golden opportunity for a new round of huge profits. It's happening right now in eurozone's debt colony, Greece, always with the help of the IMF, one of the primary tools of the global neoliberal regime.
Argentinian writer, journalist, and researcher Stella Calloni, explained that violating the constitution and the laws, and ruling by Necessity and Urgency Decrees(NUDs) since December 2015, Macri took a road that evidently seeks to deliver the country to the global hegemonic power and the destruction of a work that had earned Argentina worldwide admiration and respect. He is delivering the country to the sinister designs of the International Monetary Fund and other agencies, banks and foreign institutions. All his economic actions favor the powerful and mark a path of exclusion for the population.
With Washington's darling in power, Macri, it was a matter of time for the IMF mafia to return to the country. But Argentinians have very bad memories from previous IMF presence. We all know now what IMF means: a destructive tool which has the mission to loot public property in favor of the private capital, and save bankers and 'investors' in times of crises at the expense of the taxpayers.
Mark Weisbrot, co-director of the Center for Economic and Policy Research thinktank in Washington DC, said that in theory getting a line of credit from the IMF could help because it was like having additional reserves to defend the peso without having to borrow them. “But it depends on what conditions the IMF puts on it. The most likely direction will be to reduce the current account deficit through contracting the economy, which is of course not good for the majority of Argentines. The IMF of course has a terrible history in Argentina, in particular their role in deepening and prolonging the depression of 1998-2001.”
And the global neoliberal priesthood encouraged its current puppet to implement the same mistakes that always lead to the typical failures.
As Kavaljit Singh explains, the current market turmoil may have come as a surprise to the investor-friendly government of President Mauricio Macri. After coming to power in late 2015, his government dismantled foreign exchange controls and trade restrictions; adopted inflation targeting with a freely floating exchange rate; settled disputes with private foreign creditors; reduced subsidies on public services; and undertook other market-friendly reforms to re-join the global capital markets.
From the IMF to global business leaders, all praised pro-market reforms introduced by the Macri government. Just four months back, the IMF in its 2017 Article IV Consultation with Argentina (issued on December 29, 2017) stated: “The authorities should be commended for removing FX controls and trade restrictions that severely limited Argentina’s integration into the global economy.”
Recall that, under the American pressure, countries like South Korea and Thailand, withdrew all their restrictions allowing the inflow of capital from the West in the late 90s. This helped for the so-called “Asian miracle” in the economy.
The Asian crisis began in Thailand. Hundreds of thousands of offices and apartments were built, but nobody wanted them, and brokers went bankrupt under the weight of loans. Investors from the West panicked and rushed to get their money out of the country. The panic began to spread first in South Korea. Housewives formed queues to give their surplus to the government to save country, but this was not enough.
Then, groups of technocrats of IMF arrived and offered billions of dollars in loans to stabilize the economies. The IMF argued that the reason of the crisis was that Asian economies were not westernized enough. In exchange for loans, they should turn to free market models. This meant cuts in government spending and elimination of the corruption and nepotism of the power elites. The crisis worsened and spread to Indonesia, whose president Suharto was an “emperor” enclosed by a corrupt clique of advisors and family members. At first, he refused to do what the IMF wanted, so the IMF turned to Robert Rubin.
Rubin and the Treasury were determined to press Suharto to do what they wanted. In January 1998, Suharto retreated and signed an agreement with IMF. Indonesia received a huge loan to stabilize the economy which worked for a while. But later, the Indonesian currency collapsed, loosing 80% of its value and destroying the economy. The exchange rate of the country collapsed and the economy went into free fall. Indonesia was not the only one. In every country which received loans from IMF, such as Thailand and South Korea, the economy was stable for a while and then the exchange rate collapsed. Billions of dollars were given to Asian banks from the IMF, but many of them were used immediately to rescue western investors who wanted to take their money out of the country.
Providing billions of dollars in loans, the IMF rescued western investors and pushed the taxpayers of the countries deeper into debt because they had to repay the IMF. The result of the cuts was the destruction of the area. In Indonesia, the government subsidies were removed as instructed by the western bankers. Prices soared and within a few months, in a country of more than 200 million, 15% of the male workforce lost their jobs. Economic output fell by 14%. The economy collapsed and ethnic and religious strife began. The same happened in Thailand and South Korea. Millions of people went back into poverty from which they thought they had escaped forever. By the mid 1998, the Asian economies collapsed. It was the biggest disaster for countries since the big recession of the 30s.
We've seen the play, again, and again, and again. And yet, these neoliberal priests insist to impose their failed model through IMF invasion in national economies. No matter how many times it has failed, it doesn't matter. For them it's a religion.
But Argentinians didn't forget what happened 17 years ago and are getting ready for another war with the neoliberal forces of destruction: