ARGENTINA’S PAINFUL RETURN TO
“ECONOMIC ORTHODOXY”
The new MACRI government in ARGENTINA has embarked on a
rapid-fire series of conservative economic reforms, threatening public sector
employment and social programs.
Since taking office
on December 10, ARGENTINA’S new president MAURICIO MACRI has moved at a hurried
pace to overhaul twelve years of progressive economic and social policies
implemented by the successive NÉSTOR and CRISTINA KIRCHNER governments.
DEMOCRACY AT STAKE - GOVERNING BY DECREE
Background Information:
Click here: ARGENTINE CORPORATE MEDIA: WAR BY MEDIA AND THE TRIUMPH OF PROPAGANDA
Click here: ARGENTINE CORPORATE MEDIA: WAR BY MEDIA AND THE TRIUMPH OF PROPAGANDA
BACK TO “BUSINESS”
Following ARGENTINA’S
break with the International Monetary Fund (IMF) in 2002 as part of its
strategy to pursue policy options going against the “WASHINGTON CONSENSUS” neoliberal framework,
the KIRCHNER governments followed a KEYNESIAN model of economic growth,
protecting national industries and boosting internal consumption in order to
stimulate the economy. From 2002 to 2011, ARGENTINA achieved the fastest economic growth in the Western Hemisphere.
CORPOCRACY IS BACK IN ARGENTINA
MACRI’S government,
much more allied with the business community and a myriad of international
corporations, is now racing back toward a free market-oriented model aimed at
attracting foreign investment while reducing state spending and implementing
austerity measures. Such contractionary policies have often slowed economic
growth and prolonged recessions in developing economies.
Though many
economists agree a currency adjustment was necessary to correct for years of
the peso being held artificially strong and to curb falling reserves in the
Central Bank, the sharp peso devaluation on MACRI’S second day in office
led to an immediate fall in purchasing power for ARGENTINE consumers. This was
something the KIRCHNER economic model had worked to prevent by regularly
increasing salaries and pensions to keep up with rising prices. Analysts have
speculated that MACRI—unlikely to successfully curb high inflation rates in the
coming months—will probably end these pay increases, further eroding consumer
purchasing power and most directly affecting the poor and working class.
Additionally, the devaluation and a hike in utility prices have led to an
increase in the cost of living and a fall in disposable income, sapping the ability
of many to participate in the economy through business ventures or
discretionary spending.
To the dismay of
many, MACRI began the New Year by ordering thousands of public
sector layoffs across the country—14,000 by mid-January—with anywhere
between 60,000–200,000 more
projected for the coming months. His opponents have protested,
claiming that the layoffs are a form of political persecution, with KIRCHNERISTS
disproportionately targeted.
ONCE AGAIN BACK TO THE DARK AGES OF RIGOROUS OPPRESSION IN
ARGENTINA?
Reminiscent of the ARGENTINA
of the 1990s, those who have taken to the streets to oppose the layoffs have
been met with riot police, tear gas, rubber bullets and water cannons. One
widely circulated photograph shows a public
employee’s back completely bloodied from rubber bullets.
CONVERGE ARGENTINA INTO A CHEAP WORKFORCE
Some analysts argue that the layoffs are being used to lower salaries and
wages overall, with higher unemployment levels serving to pressure wages downward.
This would be to the benefit of the economic elite and corporate supporters of MACRI’S government who foresee greater investment in Argentina if wages are
sufficiently lowered—or made “competitive.”
Indeed, CRISTINA
KIRCHNER’S former minister of economy, AXEL KICILLOF, maintains that the policy
is purposely designed to “convert Argentina into a country with a very cheap
workforce.”
Others who will suffer from MACRI’S massive lay-off plan include thousands of women and transgender victims of domestic violence who get free prenatal and infant care and other important services from free community health centers. With all of their employees laid off, some centers have been shut down entirely. Meanwhile, KIRCHNER-era grain and beef export taxes, which had fed state coffers and provided funding to social programs and public services, have also been cut in a lackluster attempt to appease farmers by triggering a rise in grain sales while boosting Central Bank revenue.
Others who will suffer from MACRI’S massive lay-off plan include thousands of women and transgender victims of domestic violence who get free prenatal and infant care and other important services from free community health centers. With all of their employees laid off, some centers have been shut down entirely. Meanwhile, KIRCHNER-era grain and beef export taxes, which had fed state coffers and provided funding to social programs and public services, have also been cut in a lackluster attempt to appease farmers by triggering a rise in grain sales while boosting Central Bank revenue.
THOSE WHO STAND TO PROFIT FROM THESE NEW POLICIES INCLUDE
MANY IN MACRI’S INNER CIRCLE.
He has stacked his
cabinet with businessmen and former CEOs, and at the provincial level, the new
minister of agriculture for BUENOS AIRES Province—now also governed by MACRI’S party—is
a former regional manager for MONSANTO. The media has reported that since the
election, the sale of MONSANTO products like GMO corn seeds and herbicides have
jumped. Questions of conflict of interest, though, do not seem to concern MACRI, who seems intent on
bringing a new "managerial ethos" to ARGENTINA. Other corporate executives whom he has appointed to cabinet positions have had close
business relationships with his family, who themselves are often criticized for having
greatly profited from ventures during the 1976-1983 dictatorship. If government
policy is going to have the same “ethos” as scandal-plagued companies
like MONSANTO, SHELL, JP MORGAN CHASE, and GENERAL MOTORS—some of the
corporations that MACRI'S new cabinet members have previously worked for— then
it is no wonder that so many ARGENTINE'S are worried for their
country.
Background Information: MONSANTO AND ARGENTINA
Click here to read entire article:
ARGENTINIANS consumes vast amounts of Genetically Modified Food (GMO) products without being aware of the fact, not to mention the subsequent health risks. For in ARGENTINA it is not mandatory to label genetically
modified food products, unlike in the EU.
IS ARGENTINA HEADING FOR ANOTHER 2001?
The return to a
“business-oriented” economic regime under MACRI will likely include returning
to increased dependence on foreign creditors and the same multilateral
organizations that led the country down a turbulent path to economic collapse
in 2001. An important component of his business-friendly model is MACRI’S vow
to renew ties with the IMF and end the conflict with “vulture
fund” hold-out creditors. In January, after thirteen years of ARGENTINA’S absence,
he attended the World Economic Forum in DAVOS, as if proudly debuting the
country’s young, new economic orthodoxy to an eagerly awaiting business world.
Background Information:
MACRISMO IN “MACRILANDIA”
Click here to read entire article:
MACRI, THE PUPPET OF THE WASHINGTON CONSENSUS?
The renewal of IMF ties has supporters of KIRCHNERIST economic heterodoxy worried, and for good reason. From 2003 to 2011, NÉSTOR and CRISTINA KIRCHNER oversaw recovery from a deep recession and the largest sovereign debt default in history at the time, and subsequently—against the predictions of economists and the international finance world—an impressive economic rebound. Within three years, ARGENTINA’S GDP returned to pre-recession levels, simultaneously increasing real wages, social spending, and employment, while lowering inequality and reducing poverty almost by half. A crucial factor in this successful rebound was ARGENTINA’S breaking of ties with the IMF, and its release from the dictates of “WASHINGTON CONSENSUS” policies that had run the economy into the ground in the first place. In 2008, counter-cyclical and heterodox economic policies helped ARGENTINA weather the effects of the global downturn.
The renewal of IMF ties has supporters of KIRCHNERIST economic heterodoxy worried, and for good reason. From 2003 to 2011, NÉSTOR and CRISTINA KIRCHNER oversaw recovery from a deep recession and the largest sovereign debt default in history at the time, and subsequently—against the predictions of economists and the international finance world—an impressive economic rebound. Within three years, ARGENTINA’S GDP returned to pre-recession levels, simultaneously increasing real wages, social spending, and employment, while lowering inequality and reducing poverty almost by half. A crucial factor in this successful rebound was ARGENTINA’S breaking of ties with the IMF, and its release from the dictates of “WASHINGTON CONSENSUS” policies that had run the economy into the ground in the first place. In 2008, counter-cyclical and heterodox economic policies helped ARGENTINA weather the effects of the global downturn.
Background Information:ARGENTINA -
OPPOSING THE WASHINGTON CONSENSUS
Yet there is already speculation that, due to
the large debts accrued to the City of BUENOS AIRES when MACRI was
Chief of Government, creditors will decide to issue loans to ARGENTINA only if
the government implements austerity measures. The return to an economic model
predicated on adherence to the constraints of IMF-mandated policies is a
worrying prospect, as it would undermine Argentina’s economic sovereignty and
possibly return it to dependency on foreign-induced growth.
THE LEFT AS
OPPOSITION, AGAIN
Argentina’s Left
solidified commitment to a number of ideals during twelve years of working
within the framework of a progressive center-left government, but now it has
again found itself on the outside. Unwilling to accept that over a decade of
progress can revert so rapidly, KIRCHNERIST loyalists and other MACRI opponents
have protested each new blow against the previous government’s policies.
Commentators point out that
since 1928, no elected non-Peronist president has completed a full term. The
implication is that ARGENTINES will not allow MACRI to finish his term if he
continues to pass unpopular measures. Could MACRI be brought down amid burning
tires, Molotov cocktails and the clamoring of pots and pans, as five other
presidents were during the crisis of 2001–2002? Or might he be the first
non-Peronist president to finish his term in almost a century?
FORTUNATE ECONOMIC INHERITANCE FOR MACRI
Despite the
unpopularity of his reforms, MACRI maintains an important advantage: the
economy he inherits is not the disastrous economy that the late NÉSTOR KIRCHNER
faced in 2003. Rather, despite inflation and slow growth in the last four
years, ARGENTINA has had a relatively well-functioning and independent economy,
allowing many to live well and to even thrive. The general stability that
passed on to MACRI allows him more flexibility to enact unfavorable economic
policies. Today, the public has growing confidence in institutions that during
the 2001 crisis were completely delegitimized.
Similarly, the
difference between protests now and those during the recession and crisis of
2001–2002 is that the latter were preceded by the complete delegitimization of
institutions and the politicians who ran them. The KIRCHNER government’s
decline in support has been nowhere near the lack of public confidence that led
people to chant “que se vayan todos!” fourteen years ago. Instead,
confidence in the state and its role in society has increased since 2001, as
support for the KIRCHNERS’ policies—sometimes even within MACRISMO—has also shown. Each
of these factors increases the likelihood that MACRI’S government will maintain
stability.
ARGENTINES – BRACE YOURSELF OF WHAT’S TO COME
If the violent
repression of protestors or the recent detention of Tupac Amaru leader MILAGRO
SALA is any indication of what may come, then social movement organizations
should brace themselves. The criminalization of
protest and the persecution of social activism—as some describe MACRI’S
actions—seem consistent with MACRI’S resolve to “remove ideology” from government
politics. MARGARET THATCHER’S neoliberal dictum that “there is no such thing
as society” comes to mind in this context of renewed mass protests — and
police violence —on the streets of ARGENTINA.
Background Information: MANCHESTER LIBERALISM – ARGENTINE
STYLE
Click here to read entire article
But the ARGENTINE
Left is not easily deterred. For social movement organizations, KIRCHNERIST
groups, labor unions and more radical organizations, the key is to continue to
organize. “The social movement groups have learned a lot in the last fifteen
years,” says EZEQUIEL ARNEODO, a member of the socialist-oriented organization
Patria Grande, which has roots in the social explosions of 2001–2002. “We
gained new legislative spaces in Congress and local governance that we never
had before, and have learned to use them. Now it’s time to build again, even if
it is from the outside.”
Adapted by Geopolitical Analysis and Monitoring from the original
article written by Sara Kozameh via Nacla reporting
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