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CounterPunch
February
20, 2003
The IMF Fiddles While La Paz
Burns
The New Opium
Wars in Bolivia
by KURT NIMMO
Last week 27 people were killed in Bolivia. They
were in the streets protesting a 12.5 percent income tax increase
("impuestazo") levied on the poor by the government
at the behest of the International Monetary Fund. The IMF says
this is necessary to reduce a budget deficit and as a pre-condition
for four billion in new loans. So the people went in the street
to protest and Bolivia's right wing president, Gonzalo Sánchez
de Lozado, sent out the troops. The situation was so bad -- shops
and supermarkets were looted and government buildings in Plaza
Murillo were torched -- that the president decided it wise to
roll back the tax. For now.
On the first day of the riots CBS, NBC,
and Fox published stories. Colorful riots and footage of historical
buildings aflame will always attract the attention of a corporate
media addicted to sensationalism. They mentioned the tax increase
but said nothing about the IMF or its austerity plans. "While
Bolivia has had some recent success transferring itself into
a market-oriented society, the slow growth rates in the late
1990s fueled discontent in the country's low-income sectors,
leading to major civil disturbances in both 2000 and the following
year," the UPI explained. ABC felt it was necessary to mention
the looting of Pepsi and Coca-Cola bottling plants, as well as
a Burger King. As usual, little was put in context. No mention
of loan sharking by the IMF. No mention of the wholesale looting
of Bolivia's economy by international neoliberal bankers, "market-oriented"
managers who specialize in dismantling Third World countries
for fun and profit.
Of course, we shouldn't expect ABC or
CBS to mention how a public water system in Cochabamba was sold
to foreign investors in 2000, an act of theft resulting in large
protests and the imposition of martial law. After Aguas del Tunari
-- a consortium led by London-based International Water Limited,
which is jointly owned by the Italian utility Edison and US-based
Bechtel Enterprise Holdings -- gained control of Cochabamba's
water, rates were hiked by 35 percent. Only after Cochabambinos
went in the street did then president Hugo Banzer promise to
roll back the rate increase. Banzer eventually broke his promise,
as Sánchez de Lozado will eventually break his over the
income tax increase. World Bank director James Wolfensohn felt
compelled to tell a Finnish news reporter at the time of the
Cochabamba swindle that it's not unreasonable for a family earning
$100 a month to pay $20 for water. Wolfensohn didn't bother to
mention that World Bank economists in and around Washington pay
$17 per month for water. It's also not uncommon for them to pay
$100 for lunch in one of those posh Capitol Hill restaurants.
Greg Palast, an American journalist who
works for the BBC, explains how the World Bank and International
Monetary Fund implode and then loot economies in Third World
countries. He quotes Joseph Stiglitz, ex-chief economist of the
World Bank, who describes the thievery as a four step program.
"Step One is privatization," writes Palast. State industries
in poor nations are sold off at bargain basement prices. "After
privatization, Step Two is capital market liberalization. In
theory this allows investment capital to flow in and out. Unfortunately,
as in Indonesia and Brazil, the money often simply flows out...
Cash comes in for speculation in real estate and currency, then
flees at the first whiff of trouble. A nation's reserves can
drain in days... And when that happens, to seduce speculators
into returning a nation's own capital funds, the IMF demands
these nations raise interest rates to 30%, 50% and 80%... Higher
interest rates demolish property values, savage industrial production
and drain national treasuries." Step Three follows: market-based
pricing, "a fancy term for raising prices on food, water
and cooking gas. This leads, predictably, to Step-Three-and-a-Half:
what Stiglitz calls 'the IMF riot'... The IMF riots (and by riots
I mean peaceful demonstrations dispersed by bullets, tanks and
tear gas) cause new flights of capital and government bankruptcies."
Finally, Step Four is introduced: free trade. "This is free
trade by the rules of the World Trade Organization and the World
Bank, which Stiglitz likens to the Opium Wars," Palast writes.
"In the Opium Wars, the West used military blockades. Today,
the World Bank can order a financial blockade, which is just
as effective and sometimes just as deadly."
Naturally, the IMF contends they don't
force the four step program on impoverished nations such as Bolivia.
It's Gonzalo Sánchez de Lozado's fault, not the IMF and
World Bank. As Elias Davidson of the Coalition for Global Solidarity
and Social Development writes, "[o]ften we discover that
the government officials participating in negotiations with the
IMF, are themselves former IMF employees or have been trained
in liberal economics at Western universities." This is at
least partially the case with Gonzalo Sánchez de Lozado,
who reportedly speaks better English than Spanish. As the son
of an exiled diplomat, Lozado spent most of his life in the US.
He graduated from a US college with a degree in philosophy and
English literature, not economics. He also owned 200 silver mines
shortly before being elected to the presidency. Working conditions
in these mines have remained virtually unchanged since the 16th
century when the Spanish ruled. On February 14, Lozado escaped
the presidential palace in an ambulance while La Paz burned.
All across South America the people are
in revolt against the IMF and World Bank. In February 2001, Ecuadorian
environmentalists and human rights activists occupied the Quito
offices of the IMF in support of thousands of indigenous protestors
rising up against government austerity measures mandated by the
IMF (in Ecuador, the monthly minimum wage is $130 while the monthly
cost of living is $200). Tens of thousands marched in Argentina
to protest austerity measures (in La Plata, capital of Buenos
Aires province, police fired rubber bullets to disperse 400 state
workers protesting unpaid salaries). In August, 2002, in Buenos
Aires 5,000 people marched against the IMF and a visit by Bushite
Treasury Secretary Paul O'Neill (since replaced by millionaire
CSX railroad chairman John Snow). O'Neill's motorcade was pelted
with eggs by demonstrators outside the Economy Ministry. In 1999,
over 100,000 people marched in Brasilia against the IMF-imposed
economic policies of President Fernando Henrique Cardoso (when
it appeared last year that Workers Party candidate Luis Inacio
da Silva would win the election in Brazil, major investment banks
including Morgan Stanley Dean Witter and Merrill Lynch downgraded
their ratings and ignited a financial crisis). In June, 2001,
tens of thousands marched in Bogota and Medellin, Colombia, not
only against the IMF but also US military presence in their country.
Meanwhile, in Caracas, Venezuela, the daily El Nacional reported
early last year the IMF had offered to bankroll the removal of
Hugo Chávez, who won presidential elections in 1998 and
again in 2000 by the largest majority in 40 years.
According to the Organization of American
States (as reported by the UK Observer), the CIA and Bush administration's
fingerprints are all over the failed coup attempt against Chávez
last April. "How do we know that the CIA was behind the
coup that overthrew Hugo Chávez?" asks historian
William Blum. "Same way we know that the sun will rise tomorrow
morning. That's what it's always done and there's no reason to
think that tomorrow morning will be any different."
As popular resistance against the IMF
and Washington's interventionist policies in South America escalate
(and popular reformers such as Chávez and da Silva are
elected in democratic elections), the US will increasingly search
for ways to undermine the will of the people, the vast majority
who are poor and disenfranchised. Is it possible the February
bombing of an exclusive club in Bogota that killed 32 people
and injured 162 was the work of the CIA, or was it the work of
FARC (as the US media insists) who have allegedly engaged in
a series of bombings since 70 US Green Berets arrived in Arauca,
a Colombian state bordering Venezuela? If the Green Berets are
there, you can bet the CIA is as well.
It is instrumental to note where most
FARC activity is centered: in Arauca, bordering Venezuela, where
government paramilitary death squads are torturing and murdering
alleged FARC and ELN (Ejército de Liberación Nacional)
sympathizers. The US State Department has classified FARC and
ELN as "foreign terrorist organizations." The Bush
administration's 2003 foreign aid request to Congress included
the first significant non-drug military aid to Colombia since
the Cold War: $98 million to protect an Occidental Petroleum
pipeline and, of course, fund the murderous paramilitary death
squads. "The methods being used against FARC are as old
as Rome and as recent as Vietnam," writes Jared Israel,
"punish and murder the ordinary people who support the forces
fighting the U.S. Make the cost of independence prohibitive."
That's exactly what the IMF and the Bushites
are doing in Bolivia -- making the cost of independence prohibitive.
Meanwhile, in New York, UN Secretary-General
Kofi Annan urged Bolivians to try to resolve their differences
"through dialogue and full respect for the institutions
of democracy." Maybe Annan should tell the Bushites, the
greedy neoliberal "free trade" investors, the World
Bank, the IMF, and the tiny Bolivian elite to respect democracy.
"The solution is the resignation of the president,"
Amymara Indian leader Evo Morales, who ran against Sánchez
de Lozado for the presidency last year, told a radio station
in La Paz. "Democracy cannot govern with bullets."
Nor can democracy govern with IMF loan
sharks looking for blood in the water.
Kurt Nimmo
is a photographer and multimedia developer in Las Cruces, New
Mexico. Visit his excellent online
gallery. He can be reached at: nimmo@zianet.com
We highly recommend regular visits to
Nimmo's website, Another
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February 15
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