SPREADING THE WORD
One does not need to be an economist to see that LATIN AMERICAS economy is booming, much to the “dislike” of the IMF and WORLD BANK, especially when it comes to issues concerning ARGENTINA it seems. The reason of which is obvious.
After ARGENTINA’S default in 2001, which many argue was caused to a large extend by the IMF, ARGENTINA was austere from the world financial markets, which as it turns out was not so bad after all. First ARGENTINA took the bold initiative to pay back its dept with the IMF in order not to be hostage to their policies, thus giving them leverage on dealing with their crisis independently. Being band from the international financial system and thanks to the commodity boom ARGENTINA could “freely maneuver” in “niche markets”, without needing to adhere to international financial doctrines. Focusing on ASIA rather than the US also helped, despite its large trade volume with the USA.
Needles to say, this independence is something the USA and its “CORPORATOCRACY” (See: http://en.wikipedia.org/wiki/Corporatocracy) are desperate to undermine, thus they do not miss a chance to use their influence to lobby to promote bias media coverage in order to spread bleak economic outlook for LATIN AMERICAN and its politics. Especially since most of LATIN AMERICA has shifted from US friendly governments to political independent ones.
SHARE OF THE COMMODITY CAKE
Geo politically as well as strategically the current manipulative tactics by organizations such as the IMF and the WORLD BANK and governments of the developed world are of significance, because LATIN AMERICA is a major supplier of food commodities, natural resources and in the not too distant future also water commodities.
Naturally the 1st world are showing keen interest in the region and use all means in order to gain economic as well as political influence. (The latter of which is becomes increasingly difficult) World leading food producers such as the influential and controversial MONSANTO Corporation, CARGILL, to name but a few all have keen interest to obtain control over LATAM food commodities and subsequently governments in order to control world food markets and societies. (See http://en.wikipedia.org/wiki/Monsanto#Criticism )
CORPORATOCRACY – ENRON - AZURIX SOUTHERN WATER PLUNGE
Thus it becomes evident why for example WASHINGTON voted against loans for ARGENTINA from multilateral development banks. Allegedly the AZURIX Corporation, (See: http://en.wikipedia.org/wiki/Azurix ) which says ARGENTINA refuses to honor a ruling by the WORLD BANK arbitration tribunal to compensate it for prematurely eliminating a 30 year water concession during the countries devastating 2001 economic crisis, pressured WASHINGTON to take actions against ARGENTINA.
The visionary move by ARGENTINA, to reinstate government control over its water resources caused dismay among US corporations for they lost a lifetime opportunity in future investment, for those who control water will feed the world. What further cause’s annoyance among US political as well corporate establishments is that the US loan hurdle will not affect ARGENTINES funding for 2012.
Looking more closely at AZURIX it seems even more ludicrous that this company, which was part of the ENRON Corporation (See http://en.wikipedia.org/wiki/Enron_Corporation, http://en.wikipedia.org/wiki/Enron_scandal ) which filed for bankruptcy protection in 2001 amides one of the biggest and most complex bankruptcy cases in U.S. history due to mismanagement, demands of ARGENTINA to honor a deal set up during the pressure of financial collapse (also in 2001) which would have benefited AZURIX to a great extend and control basically ARGENTINES water resources, making ARGENTINA totally dependent on a foreign entity.
“PSY OPS”
In military term one refers to PSY OPS (Psychological Operations) when deliberately spreading misinformation in order to gain strategic advantages. In today’s global eco-political stage, governments which are facing stagnating economic growth use similar tactics by spreading negative economic outlooks on countries that do not fit within their strategic agenda or are dogging conservative economic and financial doctrines imposed upon them by the so called developed world. This has been the case in recent past regarding LATAM, particularly BRAZIL and ARGENTINA, whose economies are thriving.
Thus the IMF and the WORD BANK periodically keep spreading word through its loyal media outlets such as THE ECONOMIST, on the dangers of BRAZILS and ARGENTINES Economies overheating, being fully aware that such comments cause turmoil in the markets. What apparently plays into ARGENTINA’S favor is its ban from the international financial market, much to the discontent of the developed world, because it seems that this helps the county to avoid the casino finance vultures homing in on its markets. Thus the country can grow economically without worrying about economic market trends. (See http://en.mercopress.com/2011/09/23/argentine-central-bank-dismisses-imf-warning-on-risk-of-overheating-economies )
The problem is that those countries who themselves face financial turmoil and are at the brink of default try to dictate financial and economic terms to emerging markets without realizing that the geopolitical landscape is shifting. When the WORLD BANK tries to impose financial terms and conditions on ARGENTINA one should not forget that such moves are politically motivated. The UK for example is a major shareholder of the WORLD BANK as is the US, thus the UK as well as the USA use their influence within the WORLD BANK, IMF and the PARIS CLUB to achieve their geo strategic objective. A recent example is BRITAIN’S oil exploration near the MALVINAS Islands (FALKLAND Islands), which prompted a “war of words” between ARGENTINA and BRITAIN, the latter of which went to war over the islands dispute in 1982.
LOOKING EAST,…….. A BLESSING OR CURSE?
The fact that LATAM is increasing its trade with China is not well seen by the World Bank as it threatens to undermine economic doctrines developed by the World Bank, IMF and the Paris Club (all 3 entities are predominantly under control of the USA and Europe ) in order to control the markets. Thus the World Bank was quick to voice its concerns over LATAM relying too much on trade with China and that this strategy could backfire.
The office of the Chief Economist for the Latin America and Caribbean Region of the World Bank indicated it its SEMIANNUAL REPORT that the LAC (Latin American and Caribbean) region has made tremendous advances in the last 10 years and that sovereign debt default risk of several LATAM counties, including CHILE, COLOMBIA and PERU is lower than that of FRANCE. Needless to say CHILE COLOMBIA and to some extend PERU have close eco - political ties with the USA, thus it is clear why the report left out BRAZIL and URUGUAY.
The report warns that the “CHINA CONNECTION” must be monitored sharply for though it has nurtured rapid growth, the partnership also has the potential to collapse. What the report neglects however is the fact that the world population will always be in need of food and thus countries with vast amount of food commodities and other natural resource will most likely continue to grow economically.
"There is little evidence that CHINA can play a role in fostering productivity growth for LATIN AMERICA," the WORLD BANK'S chief economist for the region, Augusto DE LA TORRE, stated in a press conference.
Now why would he make this comment? Is it genuine or politically motivated? Don’t forget that the WORLD BANK is de facto run by the USA, UK and EUROPEAN entities, all of which are struggling with their financial crisis and stagnating economy.
DE LA TORRE further cited that "In the context of the lackluster economic performance in the U.S. and EUROPE, the key question is whether LAC can leverage its connection with CHINA and turn it into an [independent] source of long-term growth."
In my opinion, and for reasons I mentioned in numerous articles on this blog, LATAM will be able to turn into a source of long-term growth, provided it does not solely focus on CHINA but includes other countries in the FAR EAST. Despite the complex structure of today’s economy and close ties to politics one should not only rely on casino financial market indicators but also on common senses and logic.
Interesting reading:
No comments:
Post a Comment