From: Jason Mark (jason@globalexchange.org)
Date: Fri Mar 01 2002 - 18:41:25 EST
Dear Friends:
As you know, Global Exchangeıs longtime organizer Juliette Beck has recently
left the organization to travel the world. That means that Global Exchangeıs
³Global Justice² listserves will now be moderated by Jason Mark and Kevin
Danaher.
A quick introduction:
Kevin Danaher, Ph.D, helped to establish Global Exchange in 1988. Called the
³Paul Revere of globalizationıs woes² by the New York Times, Kevin has been
a longtime critic of the International Monetary Fund, World Bank, World
Trade Organization and ³free trade² agreements such as the North American
Free Trade Agreement and the Free Trade Area of the Americas. He has
authored or edited more than 10 books, including Top Ten Reasons to Abolish
the IMF and World Bank, Corporations Are Gonna Get Your Momma, and Globalize
This!
Jason Mark, a former reporter, is Global Exchangeıs communications director.
He and Kevin are currently writing a book on the corporate accountability
movement called Insurrection.
Our regular postings to this list will include our original analyses,
commentaries published by colleagues and allies, and news articles. We will
also regularly send action alerts telling you what you can do in your own
community to support social justice, democracy and human rights.
Below you will find our first posting, an article we wrote about the
political and economic crisis in Argentina. The piece will appear in the
forthcoming GX spring newsletter.
Thank you, as always, for supporting the work of Global Exchange.
Abrazos,
Kevin and Jason
In Argentina, People Power Takes on the IMF
The cries from Argentina have been loud lately. In December years of
recession finally reached the boiling point as hundreds of thousands of
Argentines poured into the streets to protest the governmentıs handling of
the economic crisis. Within days, the raucous street protests had claimed 27
lives and the presidency of Fernando de la Rua.
The protests in the streets and the collapse of the de la Rua administration
at once reveal the failed policies of the International Monetary Fund (IMF)
and the power of people united together to hold their leaders accountable
for their actions.
Much of the blame for the current state of affairs lies with IMF. Perhaps
more than any other country in South America, Argentina has embraced the
economic model promoted by the IMF and the World Bank. Beginning in the
early 1990s, the government lifted barriers to trade and investment,
privatized everything that wasnıt nailed down, and pegged its currency to
the US dollar, a move that took control of the countryıs monetary policy out
of the governmentıs hands.
At first, tying the peso to the dollar was popular, as it helped brake the
countryıs runaway inflation. But then the plan backfired. As the value of
the dollar rose in the mid 1990s, the overvalued peso started became a drag
on the economy. When government revenues began to fall, the countryıs
leaders looked to the IMF, who urged Argentina to maintain the currency peg
and cut government spending.
Even as the countryıs recession sunk into a depression, the IMF continued to
push the country to maintain the peg and cut spending on social services.
Like medieval doctors who insisted on bleeding their patients and repeating
the procedure even as the bleeding makes the patient sicker, the IMF
officials insisted on austerity and still more austerity.
The Argentine governmentıs allegiance to IMF ideology above the needs of its
own citizens eventually brought the house down. One of the main slogans
during the December protests was, "No to Adjustment!"a reference to the
IMF-mandated policies.
The collapse of the Argentine government can be explained like this. Imagine
the IMF and the popular will of ordinary Argentines as two massive tectonic
plates going in opposite directions. An elected leader like ex-president de
la Rua has one foot on the IMF shelf and one foot on the peopleıs shelf.
Now, when the plates start moving in different directions, most leaders jump
onto the IMF plate and plant both feet there. But in Argentina grassroots
pressure kept one of the government's feet grounded to the popular will.
Eventually the split became too much, and the Argentine government fell in.
National leaders in developing countries generally have two choices: follow
the advice of international financial institutions like the IMF, or heed the
calls of their own people. Most leaders go with the IMF. In this case give
the Argentines creditthey kept the pressure on and forced the government to
fall.
During his inauguration speech, the new president, Eduardo Duhalde,
announced: ³We are burying a system that has dominated this country for the
past ten years. We canıt believe in the power of the market alone. We must
now think more about the social ideals that the state can provide.²
Yet at this very moment the IMF is trying to force further budget cuts on
the country. The new Argentine leadership should stick to its word, turn its
back on the IMF, and listen to the main opinion that counts in a
democracythe opinion of the people. The well being of Argentines and
Argentine democracy hang in the balance.
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