Exclusively in the new print issue of CounterPunch
HOW MODERN MONEY WORKS — Economist Alan Nasser presents a slashing indictment of the vicious nature of finance capitalism; The Bio-Social Facts of American Capitalism: David Price excavates the racist anthropology of Earnest Hooten and his government allies; Is Zero-Tolerance Policing Worth More Chokehold Deaths? Martha Rosenberg and Robert Wilbur assay the deadly legacy of the Broken Windows theory of criminology; Gaming the White Man’s Money: Louis Proyect offers a short history of tribal casinos; Death by Incarceration: Troy Thomas reports from inside prison on the cruelty of life without parole sentences. Plus: Jeffrey St. Clair on how the murder of Michael Brown got lost in the media coverage; JoAnn Wypijewski on class warfare from Martinsburg to Ferguson; Mike Whitney on the coming stock market crash; Chris Floyd on DC’s Insane Clown Posse; Lee Ballinger on the warped nostalgia for the Alamo; and Nathaniel St. Clair on “Boyhood.”
Kirchener v. the IMF

Argentina Squares Off with International Financiers

by ROGER BURBACH

President Nestor Kirchner of Argentina is locked in a standoff with the International Monetary Fund on the third anniversary of a popular uprising. Just before Christmas, 2001 protesters surged through the streets of Buenos Aires demanding that the entire political class and its international financial backers be tossed out. The IMF along with private banks like the Bank of Boston and Citibank were denounced for their role in the country’s economic crisis. In less than two weeks the country had five presidents.

Argentina became a caldron of social ferment. In neighborhoods and municipalities, ‘popular assemblies’ emerged to debate issues and to protect local interests. Some assemblies have urged people not to pay their property taxes and instead to turn the revenue over to neighborhood hospitals.

The assemblies also discuss international issues. According to assembly organizer, Lidia Pertieria: ‘One of the rallying cries coming from our communities is "no more foreign loans". New loans only mean more swindling and robbery by our government officials.’

The piquetereos, or picketers, are the most persistent and intransigent of the protesters. Comprised of the underclass that is suffering the brunt of the country’s unemployment rate that has officially reached as high as 20 per cent, they pour into the streets, blocking traffic, demanding jobs, government help for their families, and land to grow their own food.

Kirchner became president in May, 2003. At his inauguration he strongly criticized the neo-liberal economic policies of his predecessors, blaming their slavish adherence to the IMF’s rigid structural adjustment policies for the country’s dire economic conditions. He also demanded that privatization contracts for public utilities imposed on the country be renegotiated, and declared it is the responsibility of the state to ‘introduce equality where the market excludes and abandons’.

Kirchner and the IMF have fought fiercely over the terms of new loans and the repayment of the country’s international debt. In an agreement with the IMF last year, he insisted that no more than three per cent of the budget would be used to pay down the debt. The poor and unemployed had to be a priority ­ as well as public investment. The IMF reluctantly agreed to these terms. Since then the Argentine economy has bounced back and is on track to post an 8 per cent growth rate in 2004. Now the Fund wants to increase the country’s debt repayments, citing increased growth as a reason to siphon more money from the economy.

More critically, the IMF is trying to get a better deal for the private lenders. In 2002 Argentina defaulted on nearly half of its $180 billion international debt. And then after signing the 2003 IMF agreement, the finance minister slashed the nominal value of defaulted bonds by 75 per cent ­ claiming that most were held by speculative capital that flooded the country during the halcyon days of the 1990s. Bondholders in the US, Europe and Japan rejected the offer and are pushing the IMF to force Argentina to pay up.

Continued IMF threats have prompted policy analysts and some bureaucrats to support a complete break with the IMF ­ exploring the possibilities of life outside of the ‘neo-liberal’ world. ‘There is more money, but not to pay off the debt,’ Kirchner has stated.

This week the Inter-American Development Bank demonstrated more flexibility than the IMF by extending a $200 million loan to Argentina for investment in agricultural projects. Hoping to exploit differences among international lenders, the government appears set to end its negotiations with the IMF for new credits. It will make payments on its old IMF debt but will chart an independent course over future debt payments and new economic policies.

Kirchner declares: ‘We are not going to repeat the history of the past… We don’t want new agreements that will frustrate us and the world. For many years we were on our knees before financial organizations and the speculative funds… We’ve had enough!’

ROGER BURBACH is director of the Center for the study of the Americans (CENSA) based in Berkeley, California. He is co- author with Jim Tarbell of "Imperial Overstretch: George W. Bush and the Hubris of Empire," He released late last year "The Pinochet Affair: State Terrorism and Global Justice."