BBC: Argentines eye the US with suspicion. ⇒
5 November 2005, mid-afternoon
The thing I found most interesting about this article: Maradona is apparently off the cocaine.
This is a post from my link log: If you click the title of this post you will be taken the web page I am discussing.
Well I find it hard to believe that Maradona is off the cocaine but if he is its good news.
I guess its also a feather in the cap for Cuban doctors!
by Sunny on November 5 2005, 7:31 pm #
Maradona and Castro are friends. The stuff going on back in Argentina are always surprising. Regardless of whether he is or isn’t, the anti-american sentiment building up in south america is picking up..
by Juan on November 6 2005, 4:24 am #
You mean anti-americanism had waned in South America? It has existed since Teddy Roosevelt and his big stick policy. All failed states need a scapegoat.
by Sunny on November 6 2005, 6:17 am #
So you’re trying to say America propping up all those dictators isn’t a good enough reason to hate the country. Seems alright to me.
by ramanan on November 6 2005, 3:48 pm #
Yeah, in South America that is true. That was what the big stick policy was. I admitted that.
But in Argentina? Their economic failures are due to protectionism, business regulations and lack of privatization. How is that the recession and double digit unemployment America’s fault? And the people are on the streets for that not because of propping up dictators. Shit they had so many dictators, that they have probably lost count.
by Sunny on November 6 2005, 6:37 pm #
Are you kidding me? Argentina’s economy is like a text book example of why free market economics is all bull shit and voodoo magic. When were they protectionist? Maybe back in the 80s, but during the whole 90s they were smoking the same shit the IMF smokes and you saw where it got them.
by ramanan on November 7 2005, 2:17 am #
IMF policies are protectionist. They protect the lenders.
by rishi on November 7 2005, 7:00 pm #
We seem to both have a problem of oversimplying things and making sweeping generalizations. What I am trying to say is that usually such things are very complex and it was the same in Argentina. There is enough blame here to pass out to everyone.
You are right that the 80s were really the dark ages of Argentinian history. By 90’s some reform was essential. The peg was the best thing that could have happened. It meant that inflation was low, prices were stable and the peso was actually worth something. Thanks to that there was an influx of foreign investment and due to the peg the foreign reserves were also high.
Fast forward to 1995 and the general economic conditions in South America were not optimum (ever wondered why these countries can’t get along with each other?). Being a resources oriented economy, Argentina faced the brunt of this due to slowing exports. This was compounded by the fact that although public debts were very high, the government was spending like drunken sailors (like the present US under Bush). This entire situation snowballed when the government started cancelling debts (you can only tax until people get pissed …look at present day France).
Of course there was a public backlash. Predictably there was a capital flight as investors pulled their monies (thanks to the 1 to 1 peg with the US$). People cashed out of banks and invested overseas. Still then IMF kept putting money to keep the Argentinian economy from crashing and keep the peso afloat. The fact that things were somewhat normalized from 1995 to 2002 (until the crash—which was not limited to Argentina but was indeed global) can be attributed to this. Yes, the IMF kept putting money in when there was absolutely no guarantee that they would ever be paid off.
Now in 2005, the Argentinian economy is stable and on the rise thanks to expansionary policies. Exports are on the rise. The government is actually able to use monetary policies rather than fiscal policies; instead of spending money they are controlling the flow of capital via interest rates. The peg is gone and the peso is afloat and stable. By any regard this is a very fast recovery from a depression. Something for “chardonnay socialists” like you to ponder about ;)
As long as the leaders can keep the right sort of people in the helm (instead of putting their cousins in charge of the economy), they would be fine.
I am not a big fan of the IMF but they do have their use. Without them lot of much needed infrastructure in the developing world would be impossible (for instance in India, food is not an issue but the lack of transportation is the choke). Of course, by lending money they expect a control over economic policies. Which is pretty much like any other bank that gives you a loan. It is to be expected. The best part is payoff the loans and tell them to get the hell out. India hardly takes any money from IMF / World Bank for the same reason. And whenever they have taken, they have paid it off in record time. So they are a necessary evil.
Sorry for rambling.
by Sunny on November 7 2005, 9:12 pm #