Argentina can't pay imperialist banks
Children starve as gov't defaults on debt
By G. Dunkel
During the first week of November, four children died of
starvation in the northern Argentinean province of Tucuman.
This preventable tragedy in what was once a prosperous country
sheds light on why rage against capitalism is spreading
throughout Latin America.
Tucuman was not an isolated case. UNICEF, the UN's fund for
children, estimates that 260,000 Argentinean children suffer
from malnutrition.
During the second week of November, Argentina defaulted on a
payment of $805 million due to the World Bank.
A survey of the major capitalist newspapers in the
English-speaking world--the Washington Post, New York Times,
Financial Times of London, the Toronto Globe & Mail--shows
that they covered the financial part of the economic
catastrophe currently strangling Argentina, but ignored its
impact on working and poor people, other than to note that
consumption was down because unemployment was up.
Some countries in the world have trouble feeding their
people because they can't produce enough food. That's not
Argentina's problem. It can produce enough to feed eight times
its population of 37 million people.
Even in the area including the capital of Buenos Aires,
where a third of all Argentineans live, conditions are
desperate. Silvia Almazan, a representative of a Buenos Aires
teachers' union, told the London Observer, "Children are
getting weak and hungry. Some are fainting in class and others
vomit because they eat too fast on an empty stomach."
Staff members at School No. 12 say many children rely on the
school for a good meal and appear famished on Mondays after
being at home for the weekend. They increasingly are missing
school to beg or help their parents hunt for food.
Maria del Carmen Morasso, a nutrition adviser for UNICEF
Argentina, pointed out that even if children get enough food to
survive, they face other problems from food shortages. "We are
concerned that children will not recover from this shock," she
said, which can produce permanently stunted growth and reduced
mental capacity.
Argentina's main problem, the root cause of the default and
the starvation facing its people, is that it is a developing
country within a world capitalist system in which a few
imperialist countries with super-banks and giant corporations,
including agribusinesses, dominate the world market. Under
these circumstances, and at a time when productivity has
increased rapidly all over the globe, the Argentines suddenly
find that they can no longer sell their products at a
profit.
How U.S. and EU monopolize agriculture
The two main tools governments use to protect their
agricultural sector are subsidies and tariffs, which are
allowed under the rules of the World Trade Organization (WTO).
The WTO, like all the presumably international organizations
today, is actually dominated by the major imperialist
countries. Because of this, tariffs protect the internal
markets of developed areas like the European Union and the U.S.
Subsidies allow their producers to sell at prices that
countries like Argentina can't match.
The sums involved are immense. The U.S., for instance, has
said it is pledged to eliminate subsidies, but is actually
increasing them, especially to huge corporations like Archer
Daniels Midland and Cargill. These "farmers" will receive a
$190 billion handout, an 80 percent increase, in subsidies over
the next decade.
While a comparable estimate for the EU is not available
because it has just been expanded and its Common Agricultural
Policy is under review, one study showed that each cow in the
EU gets a subsidy of $3 a day. Hundreds of millions of people
in poor countries live on less than $1 a day.
Bhagirath Lal, India's former ambassador to the General
Agreement on Tariffs and Trade (GATT), the predecessor to the
WTO, told the New Straits Times of Malaysia on Nov. 15: "The
developed countries have retained prohibitively high tariffs,
high domestic support (sometimes even enhancing them) and high
export subsidy in various forms."
Developing countries like Argentina cannot overcome the
burden of high tariffs and the high level of support to
domestic producers in developed countries. Even if they are
allowed under WTO rules to provide subsidies to their
producers, they don't have the financial resources needed to
overcome the huge sums the U.S. and EU lay out each year. In
fact, domestic farmers in developing countries face severe
competition from the highly subsidized products of the
imperialist countries.
Role of IMF and World Bank
Explaining why Argentina defaulted, Cabinet chief Alfredo
Atanasof told reporters, "Argentina was not going to accept the
policy of savage budget adjustments as a strategy for getting
over its problems."
Actually, the politicians currently running the country
would have accepted the dictates of the IMF if they thought
that the people would let them get away with that. They are in
office only because a popular eruption last December drove the
previous government out of office. They are well aware that a
very popular solution to the crisis afflicting Argentina starts
with getting rid of all politicians.
After it defaulted on somewhere between $90 billion and $141
billion owed to commercial banks, bondholders and other private
creditors early this year, Argentina had to rely on the World
Bank, which insists that countries follow the strictures of the
IMF.
The IMF's prescription for Argentina, as with so many other
developing countries, was austerity: cut social services,
medical care, education and government jobs, along with
wholesale privatization, and totally open up the economy to
foreign investors; put the peso on a dollar standard and raise
interest rates. The government, in going along with this, even
confiscated a large chunk of bank deposits last December.
And what was all this pain supposed to accomplish? It was
supposed to get capitalist exploitation going again.
But instead the economy contracted by 12 percent over the
past year. Wages dropped by 44 percent, showing which social
class is expected to pay for the capitalist crisis. Some 5
million people are now classified as "extremely poor," meaning
they regularly do not get enough to eat. Some 14 million are
just "poor," meaning they do not make enough to pay their
bills--rent, electricity, phone, car loans--regularly. Close to
200,000 people were dropped from the telephone system in the
first three months of 2002.
Probably Argentina could have paid the World Bank its $805
million, especially since imports have fallen
drastically--nobody has money to buy anything but the
essentials, if that--but it was politically impossible.
In the fiscal year ended June 30, Argentina paid out to the
World Bank $786 million more than it received in loans,
including $613 million in interest and charges, according to
the bank's own figures. With yet another payment due now, and
facing its worst economic collapse since the Great Depression,
the government decided it couldn't risk the mass anger that
would follow another blood-letting.
Argentina is the second-largest economy in Latin America,
after Brazil. Its people are increasingly taking to the streets
out of hunger and anger. The growing turmoil there and
elsewhere in Latin America illustrates why U.S. imperialism,
despite its determined efforts to use military power to
dominate the world, cannot establish a stable Pax Americana on
any continent.
Reprinted from the Nov. 28, 2002, issue of
Workers World newspaper
This article is copyrighted
under a Creative
Commons License.
Workers World, 55 W. 17 St., NY, NY 10011
Email: ww@workers.org
Subscribe to WW by Email: wwnews-subscribe@workersworld.net
Donate to
support pro-labor, anti-war news.
Email
this article
Printable
page