On Tuesday in Buenos Aires, only a few blocks from whereArgentinian President Eduardo Duhalde was negotiating with the International Monetary Fund (IMF), a group of residents were going through anegotiation of a different kind. They were trying to save their home.
In order to protect themselves from an eviction order, the residents of335 Ayacucho, including nineteen children, barricaded themselves inside andrefused to leave. On the concrete faÃ§ade of the house, a hand printedsign said: IMF Go To Hell.
What does the IMF, in town to set conditions for releasing US$9-billion inpromised funds, have to do with the fate of the residents of 335Ayacucho?
Well, here in a country where half the population now livesbelow the poverty line, its hard to find a single sector of societywhose fate does not somehow hinge on the decisions made by theinternational lender.
For example, librarians, teachers and other public sector workers, whohave been getting paid in hastily printed provincial currencies (sort ofgovernment IOUs) wont get paid at all if the provinces agree to stopprinting this money, as the IMF is demanding.
And if deeper cuts aremade to the public sector, as the lender is also insisting, unemployedworkers, between 20 and 30 per cent of the population, will have even lessprotection from the homelessness and hunger that has led tens ofthousands to storm supermarkets demanding food.
And if a solution isnt found to the medical state of emergencydeclared this week, it will certainly affect an elderly woman I metrecently on the outskirts of Buenos Aires.
In a fit of shame anddesperation, she pulled up her blouse and showed a group of foreignersthe open wound and hanging tubes from a stomach operation herdoctor was not able to stitch up or dress due to lack of medicalsupplies.
Maybe it seems rude to talk about such matters in the context of theIMFs visit. Economic analysis is supposed to be about the peg to thedollar, peso-ification, and the dangers of stagflation notfamilies losing homes and gaping wounds.
Yet reading the reckless advicethat the international business community is hurling at the IMF andArgentinas government, perhaps a little personalizing is in order.
For weeks, Argentina has been scolded like a small child that shouldntget desert until it finishes dinner. Despite a commitment to slash 60per cent from provincial deficits, Argentina apparently hasnt doneenough to deserve a loan. The news is all on the surface, sniffs aneconomist from Credit Suisse First Boston.
President Duhalde warns thatArgentinas desperate population cannot support deeper cuts - the National Postcalls this mere procrastination.
The consensus is the IMF should see Argentinas crisis not as anobstacle but as an opportunity: the country is so desperate for cash,it will do whatever the IMF wants.
During a crisis is when you need to act, its when Congress is mostreceptive, explains Winston Fritsch, chair of Dresdner Bank AGsBrazilian unit. The National Post editorial concurs: The opportunitiesfor reform have never been better... the IMF must withhold any furtherbailouts until Argentina dramatically overhauls its public sector andlegal system and re-opens its economy.
The most draconian suggestion comes from Rocardo Cabellero and RudigerDornbusch, a pair of Massachusetts Institute of Technology (MIT) economists writing in the Financial Times. Its time to get radical, they say. Argentina must temporarilysurrender its sovereignty on all financial issues ... give up much of itsmonetary, fiscal, regulatory and asset management sovereignty for anextended period, say five years. The countrys economy its spending, money printing and tax administration should becontrolled by foreign agents including a board of experienced foreigncentral bankers.
In a nation still scarred by the disappearance of 30,000 people duringthe 1976-1983 military dictatorship, only a foreign agent would havethe nerve to say, as the MIT team does, that, somebody has to run thecountry with a tight grip. And that, with the Argentineans out of the way,the country could be saved by prying open markets, introducing deepspending cuts, and of course, a massive privatization campaign.
Its obvious to anyone who has been paying attention to Argentinassocial upheavals that such an economic dictatorship could only beenforced through terrifying state repression and bloodshed.
But theresanother hitch: Argentina has already done it all.
As the IMFs model student throughout the nineties, it flung open itseconomy (thats why its been so easy for capital to flee since thecrisis began). As far as Argentinas supposedly wild public spendinggoes, a full third goes directly to servicing the external debt. Anotherthird goes to pension funds, which have already been privatized. Theremaining third is what we think of when we say public spending -health, education, social assistance.
Far from spiraling out of control,these expenditures have fallen far behind population growth, which iswhy shipments of donated food and medicine are arriving by boat fromSpain.
As for massive privatization, Argentina has dutifully sold off so manyof its services, from trains to phones, that the only examples offurther assets Mr. Cabellero and Mr. Dornbusch can think of privatizingare the countrys ports and customs offices.
No wonder economists and bankers are in such a rush to blame the victimsof this crisis, to claim that Argentineans overspent, were greedy,corrupt.
Of course its true that the political system here iscontaminated with cultures of both payola and impunity. But the samefinanciers that happily lined the pockets of politicians and armygenerals in exchange for local contracts are hardly the ones who shouldbe trusted to do Argentinas house cleaning.
Argentinas housewives have a better idea. Last week, on InternationalWomens Day, hundreds took to the streets with brooms in hand andannounced that they wouldnt clean their homes until they had swept thecorruption out of congress. Their protest was one tiny wave in a massivetide of grassroots mobilization that has already brought down successivegovernments and now is threatening to do something far more radical:bring in real democracy.
Following the model started by the Piqueteros (Argentinas militantunemployed), tens of thousands of residents are organizing themselvesinto neighborhood assemblies, networked at the city and national levels.In town squares, parks and on street corners, neighbors discuss ways ofmaking their democracies more accountable and filling in wheregovernment has failed.
They are talking about creating a citizenscongress to demand transparency and accountability from politicians.They are discussing participatory budgets and shorter political terms,while organizing communal kitchens for the unemployed and planning filmfestivals in the streets.
The president, who wasnt even elected, isscared enough of this growing political force that he has begun callingthe asambleas anti-democratic.
There is reason to pay attention.
The asambleas are also talking abouthow to kick-start local industries and re-nationalize assets. And theycould go even further.
Argentina, as the obedient pupil for decades,miserably failed by its IMF professors, shouldnt be begging for loans;it should be demanding reparations.
The IMF had its chance to run Argentina. Now its the peoples turn.
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