[R-P] En inglés, pero MUY importante

[Gorojovsky]

Greg Palast es un excelente periodista inglés que se dedica a defender
las causas de los pueblos del Tercer Mundo.

He aquí lo que escribió sobre nosotros. Prometen una versión en español para 
dentro de poco.
****************************************************************ARGENTINA: 
WORLD BANK PRESIDENT'S SECRET PLAN FOR BLEEDING A NATION

AN UNCHARMING MIX OF SELF-DELUSION AND CRUELTY 
BY Greg Palast 

AN ENVELOPE has walked onto my desk containing the memorandum for Argentina's 
"Country Assistance Plan" for the next four years.
The document, signed by World Bank President James Wolfensohn,
includes a warning that recipients must use the document "only in the
performance of their official duties." 

Here's the update of my prior report on the IMF, World Bank and
Argentina. 

******************************************************** 
Greg Palast
was this month named Guerilla News Network's 2001

Reporter of the Year for his exposés of the Bush family for BBC
television's 'Newsnight.' 

His new book THE BEST DEMOCRACY MONEY CAN BUY (Pluto) will be
released this April. Check our website at http://www.gregpalast.com
for pre-order information. 
******************************************************* 

In December in Buenos Aires, the Paris of Latin America, police
gunned down 27 Argentines after they chose to face bullets rather than
starvation. The nation's currency had crumbled and unemployment had
shot up from a grim 16 percent to millions more than the collapsed
government could measure. The economy had been murdered in cold
blood. 

Who done it? The killers left fingerprints all over the warm corpse. 
A "Technical Memorandum of Understanding," dated September 5,
2000, was signed by Pedro Pou, president of Argentina's Central Bank
for transmission to Horst Köhler, managing director of the International
Monetary Fund. I received a complete copy of the inside report from ... let's 
just say the envelope lacked a return address. 

The "Understanding" required Argentina to cut the government budget
deficit from $5.3 billion in 2000 to $4.1 billion in 2001. Think
about that. Eighteen months ago, when the "Understanding" was drafted, 
Argentina was already on the cliff-edge of a deep recession.
One in six workers were unemployed. Even the half-baked economists at the IMF 
should  have known that holding back government spending in a contracting 
economy would be like turning off the engines of an airplane in stall.

Cut the deficit? As my 4-year-old daughter would say, "Stooopid."

The IMF is never wrong without being cruel as well. Under the
boldface heading, "Improving the Conditions of the Poor," the agency
direct ed Argentina to lop $40 a month from salaries paid under the
government emergency employment program; the order cut the salaries 20 percent 
to $160. The "Understanding" also promised a 12-15 percent cut in civil-servant 
salaries and a pension "rationalization" (IMF-speak for
cutting 13 percent from payments to the aged under both public and
private plans). 

Cut, cut, cut amid a recession. Stooopid. 

Salted in the IMF's mean-spirited plans for pensioners and the poor
were economic forecasts bordering on the delusional. In the 
"Understanding," the globalization geniuses projected that, once
Argentina carried out the IMF plan to snuff consumer spending, somehow the 
nation's economic production would leap by 3.7 percent and unemployment wou ld 
fall. 

It didn't. The IMF plan kneecapped industrial production, which fell 
25 percent in the first quarter of last year before keeling over
completely to interest rates that, by the summer, were running up to 
90 percent on dollar-denominated earnings. 

Another envelope that walked onto my desk contained the memorandum
for Argentina's "Country Assistance Plan" for the next four years.
The document, signed by World Bank President James Wolfensohn and
dated June 25, included a warning that recipients must use it "only in
the performance of their official duties." 

My duty as a reporter is to tell you that the plan amounts to a
breathtaking mix of cruelty and Titanic-sized self-deception.
Written only months ago, when the economy was already plunging into
its dea th spiral, Wolfensohn wrote, "Despite the setbacks, the goals
set out in the last [year's] report remain valid and the strategy
appropriate."

The IMF plan, cooked up with the World Bank, would, "greatly improve
the outlook for the remainder of 2001 and for 2002, with growth
expected to recover in the later half of 2001." 

In this strange, eyes-only document, the World Bank president
expressed particular pride that Argentina's government had made "a $3
billi on cut in primary expenditures accommodating the increase in
interest obligations." In other words, the government gouged spending on 
domestic needs to pay interest to creditors, mostly foreign banks.

Crisis, indeed, has its bright side, as Wolfensohn crowed to his
banker readers: "A major advance was made to eliminate outdated labor
contracts." And "labor costs" had fallen due to "labor market
flexibility induced by the de facto liberalization of the market via
increa sed informality." Translation: Workers lost unionized
industrial jobs and turned to selling trinkets in the street. 

What on Earth would lure Argentina into embracing this goofy program? 
The bait was a $20 billion emergency loan package and "stand-by"
credit from the IMF, the World Bank and their commercial bank
partners. Bu t there is less to this generosity than meets the eye. 

The "Understanding" assumed Argentina would continue its
"Convertibility Pl an,"  instituted in 1991, which pegged the peso, the 
nation's currency, to the Ya nkee dollar at an exchange rate of one-to-one. The 
currency peg hadn't come cheap. Foreign banks working with the IMF had demanded 
that Argentina  pay a whopping 16 percent risk premium above U.S. Treasury 
lending rates for the dollars needed to back the scheme. 

Now do the arithmetic. When Wolfensohn wrote his memo, Argentina owed $128 
billion in debt. Normal interest plus the premium amounted to $27 billion a 
year. In other words, Argentina's people didn't net one
penny from the $20 billion in "bailout" loans. The debt grew, but none
of the money escaped New York, where it lingered to pay interest to
U.S. creditors holding the bonds. The creditors range from big fish, led by
Citibank, to little biters such as Steve Hanke. 

I spoke with Hanke, president of Toronto Trust Argentina, an "emerging
market" fund that loaded up 100 percent on Argentine bonds dur ing a
1995 currency panic. Cry not for Steve, Argentina. His 79.25 percent 
profit that year put his outfit at the top of the speculators' league.

Hanke profits by betting on the failure of the IMF policies.
This junk-bond speculation--the players call it "vulture
investing"--is merely his lucrative avocation. In his day job as a Johns 
Hopkins Universit y economics professor, Hanke freely offers a cure for
Argentina's woes.  The advice would put him out of business: "Abolish the IMF."

And, Hanke advised, abolish the peg. But the importance of this
one-for-one dollar exchange rate has been far overstated. When the
Argentine government finally devalued the peso in January, it wiped
out the  value of local savings accounts. The currency peg is best understood 
as the meat hook on which the IMF hung Argentina's finances. It forced 
Argentina to beg and borrow a steady supply of dollars to back each peso, and 
this became the rationale for the IMF and World Bank to let loose in the pampas 
their Four Horsemen of neoliberal policy:

liberalized financial markets, reduced government, mass privatization and free 
trade. 

"Liberalizing" financial markets means allowing capital to flow
freely across a nation's borders. Capital has indeed flowed freely.
Last year Argentina's rich dumped their pesos for dollars and sent the
hard loot to investment havens abroad, bleeding as much as
three-quarters of a billion dollars a day from Argentina. 

Once upon a time, government-owned national and provincial banks
supported their nation's debts. But in the mid-1990s, President
Carlos Saúl Menem's government sold these off to foreign operators
such a s Citibank of New York and Fleet Bank of Boston. Former World
Bank advisor Charles Calomiris told me these bank privatizations were
a "really wonderfu l story." Wonderful for whom? With the
foreign-owned banks unwilling to repay Argentine depositors, the
government has frozen savings accounts, effectively seizing money from regular 
Argentines to pay off the  foreign creditors. 

To keep the foreign creditors smiling, the "Understanding" also
required "reform of the revenue sharing system." This is the IMF's
kinder, gentler way of stating that the U.S. banks would be paid by
siphoni ng off tax receipts that the provinces had earmarked for
education and other public services. The "Understanding" also found
cash in "reforming" the nation's health insurance system (cut, cut, cut). 

And when cuts aren't enough to pay creditors, one can always sell "la
joyas de mi abuela" (grandma's jewels), as journalist Mario del
Carril describes his nation's privatization scheme to me. Notoriously,
Vivendi Universal corporation, the French infrastructure and
entertainment  giant, picked up a big hunk of the water system in 1995--and 
promptly cut staff and raised prices (by 400 percent in Tucumán Province) In 
his confidential memo, the World Bank's Wolfensohn sighs, "Almost all major 
utilities have been privatized," so now there's really nothing left to sell. 

The coup de grâce, spelled out in the "Understanding," was imposition
of "an open trade policy." This required Argentina's exporters (with
their products priced via the peg in U.S. dollars) into a pathetic,
losing competition against Brazilian goods priced in that nation's
devalued  currency. Stooopid. 

Have the World Bank and IMF learned from their horrific errors?
They learn the way a pig learns to sing: They can't, they won't and,
if they try, the resulting noise is unbearable. On January 9, with the
capital in flames, IMF Deputy Managing Director Anne Krueger ordered
Argentina's latest in temporary presidents, Eduardo Duhalde, to cut
still deeper into government expenditures. (President George W. Bush
backed the IMF budget-cutting advice -- the same week he demanded that the U.S. 
 Congress adopt a $50 billion scheme to spend the United States out of 
recession.) 

Wolfensohn's memo insisted that the World Bank-IMF scheme could still
work: All Argentina needed to do was "reduce the cost of production,"
a step that required only a "flexible workforce." Translation:
even lower pensions and wages, or no wages at all. To the dismay of
Argentina's  elite, however, the worker bees proved inflexibly obstinate in 
agreeing to their impoverishment. 

One inflexible worker, Anibal Verón, a 37-year-old father of five,
lost his job as a bus driver from a company that owed him nine months'
pay. 

Verón's joined angry unemployed Argentines, known as "piqueteros,"
who block roads. In November 2000, in clearing a blockade, the
nation's military police killed him with a bullet to the head. 

Globalization boosters portray resistance to the New World Order as a
lark of pampered, naïve western youths curing their ennui by, as
British Prime Minister Tony Blair puts it, "indulging in protest."
The U.S.  and European media play to this theme, focusing on demonstrations in 
Seattle and Genoa, while burying news of a June 2000 general strike honored by 
7 million Argentine workers. 

While the July 20 death in Genoa of demonstrator Carlo Guiliani was
front-page news in the United States and Europe, Verón's death went
unreported. Nor did U.S. media record the June 17 deaths of 
protesters Carlos Santillán, 27, and Oscar Barrios, 17, gunned down by
po lice in a churchyard in Salta Province, north of Buenos Aires.
Only in December, when Argentina failed to make an interest payment on foreign-
held debt, did the Euro-American press suddenly report a
"crisis," feeding us t he images we expect from Latin America: tear gas, 
burning cars and a parade of new presidentes taking oaths of office. 

The "Understanding" and the Wolfensohn memo are irrefutable evidence of IMF and 
World Bank guilt in the nation's financial assassination.

But did they have accomplices? 

Adolfo Pérez Esquivel, leader of Buenos Aires-based Peace and Justice
Service, (SERPAJ), a Church-based human rights organization, is
documenting cases of police torture of protesters in Salta Province
where Santillán and Barrios died. Pérez Esquivel, who won the Nobel
Pea ce Prize in 1980, told me repression and economic "liberalization"
are handmaidens. 

SERPAJ has filed a formal complaint charging police with recruiting
children as young as 5 years old as informers for paramilitary
squads, an operation he compares to the Hitler Youth. 

Pérez Esquivel, who last year led protests against the proposed Free
Trade Agreement of the Americas, doesn't agree with my verdict
against the IMF in Argentina's death. He notes that the IMF's fatal
"reform s"  were embraced with enthusiasm by Finance Minister Domingo Cavallo, 
a World Bank favorite. Cavallo, fired in December after mass protests, is best 
known by Argentines for heading the nation's Central Bank during the nation's 
1976-1983 military dictatorship. For Pérez Esquivel, Cavallo's enthusiastic 
collaboration with the IMF and World Bank suggests t hat the untimely demise of 
the nation's economy wasn't murder, but suicide. 

**************************************** 

Additional research provided by Globalization Challenge Initiative,

Washington DC, and Oliver Shykles, Brighton University (UK).


This article will appear in Connection to the Americas magazine and on
http://www.Americas.org, the premier English language site for
information on Latin American politics and economics. 

Note: This article may NOT be reproduced in English without 
permission of the author and Americas.org. Spanish-language version
will soon be posted. 

Néstor Miguel Gorojovsky
gorojovsky en arnet.com.ar

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Compañeros del exercito de los Andes. 

...La guerra se la tenemos de hacer del modo que podamos: 
sino tenemos dinero, carne y un pedazo de tabaco no nos 
tiene de faltar: cuando se acaben los vestuarios, nos 
vestiremos con la bayetilla que nos trabajen nuestras mugeres, 
y sino andaremos en pelota como nuestros paisanos los indios: 
seamos libres, y lo demás no importa nada...

Jose de San Martín, 27 de julio de 1819.

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