You, Argentina, 5 years on...

by Eric Toussaint , Damien Millet

4 January 2007

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 walked out into the streets to shout their rejection of the neoliberal policies led by Fernando De la Rua and his baleful minister of 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 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 saving bank accounts and this led the middle class to walk down into the streets along with all "have-nots" (the unemployed, the those who live in slums, 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 those formerly robbed savers.

Argentina, five years ago, almost to the day, three presidents of the Republic followed each other within a few days. De la Rua fled on 21 December 2001, and his follower, 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 [1]
; hundreds of plants and factories that their owners had turned their backs upon were occupied by workers, who started production again; unemployed people were empowered in 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 governments (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, 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 lesser 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 anticipatively, 9.8 billion dollars all in all. We grant you that you saved USD 900 million on interests, but those who made this decision were 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 be able to repay ensuing governments sold off a large part of the national patrimony and contracted new debts that are just as odiuous. Furthremore 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 governments had better use for this money and their example could have been followed on all continents! They could have dnounced 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 an institutional scandal that bring s together every month behind closed doors representantatives of 19 righ countries 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 sernvices 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 into another direction which can lastingly put the peoples back in charge of their future. Today still this is the direction we ought to take.