The IMF Is Dismantling Argentina All Over Again
Managing Director and Chairwoman of the International Monetary Fund
Christine Lagarde. (International Monetary Fund / Flickr)
In September, Argentine president Mauricio Macri accepted the 2018 Atlantic
Councils Global Citizen Award. In attendance were many of worlds
neoliberal power players and policy makers, among them International
Monetary Fund (IMF) Managing Director Christine Lagarde.
Facing the crowd, Macri gleefully admitted that with Christine, I have to
confess we started a great relationship some months ago, referring to a
series of loan agreements with the IMF amounting to $57.1 billion dollars.
I expect that this is going to work very well, and we will end up with the
whole country crushing on Christine, he continued. This dynamic of chasing
an improved image with the worlds big banks and the dominant economies in
the West is emblematic of Macris priority to secure a relationship with the
IMF and improve the countrys image with global financial institutions. But
it comes at a devastating cost for the majority of the population who will
suffer from neoliberal policy prescriptions of structural adjustment and
slashed social spending, as well as the resulting growing unemployment and
poverty.
Meanwhile, Argentinas debt to the IMF continues to climb. In June, Macri
and the IMF agreed on a $50 billion loan. In September, the amount increased
to an unprecedented $57.1 billion over three years. During an announcement
from the presidential office in August regarding recent agreements with the
IMF, Macri told the people of Argentina that this decision will put an end
to any uncertainty that has come about regarding our image on an
international level. In other words, seeking the approval of the worlds
international banks and global power players (the U.S. included) is worth
the conditions of austerity, the havoc wreaked on the lives of Argentinas
poor, working and middle classes, and the limitations that it will put on
future generations of Argentinas leadership (a limitation that we have seen
most recently in Mexico as President López Obrador pushes back against
decades of neoliberal policies and conditions agreed to by his
predecessors).
In order to afford the repayment plan, the 2019 budget eviscerates social
spending, slashing it by 35 percent while increasing debt payments by 50
percent. Christine Lagarde recently defended the evisceration of social
welfare, citing a current program in its place that allocates $6 per person
among the 13 million poor in Argentina for the last six months of 2018. This
is hardly enough for the countrys 3,965,840 unemployed (8.9 percent of the
population) and 12,167,610 residents living below the poverty line (27.3
percent of the population), based on numbers that have steadily increased
since 2016 according to the IMFs own measure and the National Institute of
Statistics of the Republic of Argentinas latest report.
Argentinas Long Relationship With the IMF, From 1976 to Today
The IMF has a long history of strong-arming the direction of Argentinas
policies and economy, beginning with the military junta in 1976 that
tortured, killed, and disappeared 30,000 people in the span of six years.
The junta largely targeted the left and the countrys poor and working class
as they implemented a series of neoliberal policies, a tactic that
journalist Naomi Klein discusses in depth in her book, The Shock Doctrine.
Despite the human toll of Argentinas genocide, the IMF was willing to look
the other way as long as the junta followed their policy prescriptions. As
Paul Cooney explained:
just one week after the military coup of March 1976, and without having to
negotiate or send a delegation, the Argentinian junta was able to obtain
over US $100 million from the IMF. In addition to this show of support for a
government willing to implement and impose neoliberal policies with an iron
hand, the IMF came through with the largest loan ever to a Latin American
country (US $260 million), just five months later.
Meanwhile, Isabel Perón, the countrys president from 1974 to 1976 until she
was ousted by the military coup, was unable to secure funds from the IMF.
Her agenda, it would seem, was not to their liking. This is what
Tricontinental: Institute for Social Research Director Vijay Prashad calls
an investment strike; the idea that credit is only available to countries
who follow neoliberal policies. Governments that strayor are perceived to
strayfrom this agenda are deprived from access to credit by the worlds
financial institutions. In other words, the banks and credit lenders go on a
strike of sorts, withholding funds and access to credit until their
neoliberal policy prescriptions are met. But, unlike labor strikeswhere the
demands are centered around conditions to improve the lives of the
majorityinvestors, through their strikes, insist on cuts to national
budgets paid for by taxes on workers and peasants and lower living standards
for workers and peasants. They use their leverage capitalto increase
their own wealth at the expense of the people who produce itthe majority of
the worlds population.
When countries faithfully go along with these conditions and implement
neoliberal policies, debt is allowed to disappear from the records, and
credit is extended (such as when US $10 billion disappeared from the records
out of a total of US $40 billion during negotiations between the IMF and
military junta, or when the IMF loans to Argentina were extended from $50
billion to $57.1 billion in September 2018 under Macri). Should the policy
direction change to show any inclination of a people-driven agenda, however,
access to credit quickly disappears and a variety of tactics are used to
destabilize uncooperative administrationswhether through the
unconventional wars that we have seen recently in Venezuela and Brazil, or
in Salvador Allendes Chile, or through military intervention.
The IMF continued to guide the countrys policies after the dictatorship
under Carlos Menem (1989-1999). It was Menems neoliberal policies that led
the country into the straits of the Great Depression of 1998 to 2002 when
the country set a record for the largest debt default in history up to that
point. In 2001, unemployment neared 20 percent and, by 2002, 53 percent of
the country was living below the poverty line. It wasnt until the Kirchner
administrations from 2003 to 2015 that Argentina began to pull back from the
grip of the IMF (Nestor Kirchner, 2003-2007, and Cristina Fernández de
Kirchner, 2007-2015). In these 13 years, as Mark Weisbrot of CEPR explained
in a recent interview, the poverty rate was reduced by 70 percent, extreme
poverty by 80 percent, and unemployment fell from 17 percent to 6.5 percent.
In contrast, in the three years since the beginning of Macris term,
unemployment has increased to 8.5 percent. In Weisbrots view, the Kirchners
did very well after the terrible experience with the IMF, which was one of
their worst depressions from 1998 to the beginning of 2002. Thats why they
were popular, and thats why Cristina was re-elected. If she could have run
again, she would still be there. The sharp turn of Macris administration
is all the more painful with the recent memory of the countrys struggles
with the IMF and a glimmer of what life could be like if the country were to
free itself of the shackles of neoliberalism.
De-Linking From the IMF Agenda
It is possible, however, to imagine an alternative to the dismal reality
created by neoliberal policies and the noose created by the investment
strikes of the worlds banking institutions. The late Egyptian Marxist Samir
Amin provided us with a framework for building an international agenda that
prioritizes the needs of the worlds poor and dispossessed, an alternative
to todays globalization that is dictated by the interests of global
capital. In his interview with Tricontinental: Institute for Social
Research, Amin reflects on the era of the Non-Aligned Movement (NAM) and
multi-polar globalization. This era, Amin said, was a time when imperialism
was compelled to make concessions and to accept the national-popular
programmes of India and other African and Asian countries. Instead of the
countries of the south adjusting to the needs and demands of globalisation,
it was the imperialist countries which were compelled to adjust to our
demands.
By 2030, Amin continues, 85 percent of the population will be living in the
Global South. The interests of the majority of this group are neglected by
neoliberal policies that slash social spending and place social wealth in
private hands. This 85 percent, Amin said, can successfully de-link to
various degrees in accordance not only with our size but also in accordance
with our alternative political block, which would replace the core
imperialist blocks which are controlling our countries today. The result of
building such an alternative could indicate the ability of the worlds poor
to compel imperialism to accept [their] conditions or part of those
conditions, or to de-link.
Argentinas poor and dispossessed are already challenging Macris agenda and
pushing back against the constraints of global capital, having organized
four general strikes since his term began in 2015. The country has been
mired in protests similar to the cacerolazos that halted the streets of
Buenos Aires during the 1998-2002 depression. As Tricontinental: Institute
for Social Researchs recent dossier points out, groups such as the
Federation of Workers of the Popular Economy (CTEP) are creating
cooperatives among the countrys growing sector of informal workers,
providing an illustration of how the working class has been fragmented and
reorganised by neo-liberal policies.
These efforts are not limited to Argentina. In the Indian state of Kerala,
the Left Democratic Front government led one of the most successful rescue
and reconstruction efforts in the countrys history after the most
devastating floods seen in 94 years, despite an attempt from the countrys
right-wing to not only neglect but actively stifle aid to the communist-led
state. In South Africa, shack dwellers of the Abahlali baseMjondolo movement
are occupying lands and building homes, refusing to leave their dignity up
to the whims of the State and the countrys elite. Across the world, people,
and peoples movements, are fighting back and creating alternatives to
neoliberal policies. As long as this happens, global capital will use any
means that it haswhether through economic policy and coercion or through
military forceto protect its interests. But, as Amin suggests, if the 85
percent of the worlds poor, from Argentinas informal workers to South
Africas shack dwellers, de-link from a neoliberal agenda and link with each
other, they may very well be able to compel the current world order to
accept their conditions and begin to create a future free from the shackles
of global capital.
This article was produced by Globetrotter, a project of the Independent
Media Institute.
Celina della Croce / Independent Media Institute