You, Argentina, 5 years on...

30 December 2006 by Eric Toussaint , Damien Millet

Argentina, you have been much talked about since the night of 19 to 20 December 2001 when after three years of economic recession your people went down into the streets to shout their rejection of the neoliberal policies led by Fernando De la Rua and his sinister minister of the Economy, Domingo Cavallo. You showed the world that citizens can change the course of history.

Argentina, those events that resulted in the December 2001 uprising started with the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
decision not to grant an agreed loan even though the government had always implemented the highly unpopular measures the IMF demanded. De la Rua responded by freezing all savings bank accounts and this led the middle class to go down into the streets alongside all the “have-nots” (the unemployed, slumdwellers, in short a large majority of your poor people). On 27 December 2006, your Supreme Court decreed that banks had to grant full compensation to savers who had been swindled.

Argentina, five years ago, almost to the day, three presidents of the Republic succeeded each other within a few days. De la Rua fled on 21 December 2001, and his successor, Adolfo Rodriguez Saa, was replaced by Eduardo Duhalde on 2 January 2002. You decided on a suspension of payment of your external debt for about 100 billion dollars, i.e. the most significant such move in history. It affected private creditors as well as the rich countries in the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

; hundreds of plants and factories, abandoned by their owners, were occupied by workers, who started production again; unemployed people were empowered by the piqueteros movement; your currency was steeply devalued; your citizens created local currencies and shouted a unanimous demand to your polticians “Que se vayan todos !” ("Let them all go away! »).

Argentina, after 25 years of uninterrupted agreement between the IMF and your government (from the military dictatorship between 1976 and 1983 to the De la Rua government via Carlos Menem’s corrupt regime), you showed the world that one country could stop paying its debt in the long term without creditors being able to organise efficient reprisals. The IMF, the WB World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, the governments of the more industrialised countries, and major media had announced chaos. And what happened? Far from sinking you started recovering.

Argentina, Nestor Kirchner, the president your people elected in May 2003, challenged private creditors with his proposal to exchange their securities against new ones at a lower price. After long negotiations that ended in February 2005, 76 % of them accepted to waive over 60% of what their credit was worth. The whole world was looking at you, and you showed that a people could say no.

Argentina, what came next was far more disappointing. For this agreement eventually signified that private creditors would again be repaid. Moreover, exactly one year ago, your government repaid all its debt to the IMF in advance, 9.8 billion dollars all in all. We grant you that you saved USD 900 million in interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. , but those who made this decision must have been struck with severe amnesia. Supported by the IMF and all major powers, General Videla’s dictatorship had used the debt to reinforce its hold on the country, to make its leaders richer, and to fashion the country in the dominant model. To meet repayments, ensuing governments sold off a large part of the national patrimony and contracted new debts that are just as odious. Furthermore those new loans were only granted on condition that massive liberalisation and privatisation measures be implemented as well as social expenditures be drastically reduced.

Argentina, your leaders could have found a better use for this money and their example could have been followed on all continents! They could have denounced the agreements with the IMF and the WB. They could have found support in the Olmoz court decision pronounced by the Federal Court of Justice and put forward solid legal arguments to decide that the debt is odious and must not be repaid.

Argentina, we are astounded to hear that your government is currently negotiating with the Paris Club, i.e. with a scandalous institution that unites representatives of 19 rich countries every month, behind closed doors at the French ministry of economy. You must know that the aim of this most secret club is to force highly indebted developing countries to repay their debts without taking social consequences into account. You owe the Club some USD 6.3 billion, but once again this debt did not benefit your people. On the contrary countries in the Paris Club, the IMF, the WB, large TNCs have used it for decades to oppress you, to coax your governments into selling your public services to private providers, deregulating your economy, and meekly submitting to severe cuts in your social budgets. Fernando Solanas’ movie “La dignidad de los nadies” (“The Dignity of the Nobodies”) clearly exposes the predicament of extreme poverty this led to.

Argentina, your president must now choose between serving your people and serving your creditors. Most unfortunately, he has obviously aligned his policies on foreign expectations. He even went to the New York stock exchange last September to ring the opening bell. As a consequence the amounts you will repay in the coming years will make it impossible to develop alternative policies to the neoliberal model. Your social demands, however justified, cannot be met as long as you do not denounce this debt as odious.

Argentina, five years ago, people in the streets were pointing in another direction, one which could bring lasting changes, and would benefit the people. Today, this is still the direction we ought to take.

Translated by Christine Pagnoulle, with the collaboration of Vicki Briault.

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

Other articles in English by Eric Toussaint (621)

0 | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | ... | 620

Damien Millet

professeur de mathématiques en classes préparatoires scientifiques à Orléans, porte-parole du CADTM France (Comité pour l’Annulation de la Dette du Tiers Monde), auteur de L’Afrique sans dette (CADTM-Syllepse, 2005), co-auteur avec Frédéric Chauvreau des bandes dessinées Dette odieuse (CADTM-Syllepse, 2006) et Le système Dette (CADTM-Syllepse, 2009), co-auteur avec Eric Toussaint du livre Les tsunamis de la dette (CADTM-Syllepse, 2005), co-auteur avec François Mauger de La Jamaïque dans l’étau du FMI (L’esprit frappeur, 2004).

Other articles in English by Damien Millet (46)

0 | 10 | 20 | 30 | 40




8 rue Jonfosse
4000 - Liège- Belgique

00324 60 97 96 80