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You, Argentina, 5 years on...
by Eric Toussaint , Damien Millet
30 December 2006

Argentina, you have been much talked about since the night of 19 to 20 December 2001 when after three years of economic recession your people went down into the streets to shout their rejection of the neoliberal policies led by Fernando De la Rua and his sinister minister of the Economy, Domingo Cavallo. You showed the world that citizens can change the course of history.

Argentina, those events that resulted in the December 2001 uprising started with the IMF decision not to grant an agreed loan even though the government had always implemented the highly unpopular measures the IMF demanded. De la Rua responded by freezing all savings bank accounts and this led the middle class to go down into the streets alongside all the “have-nots” (the unemployed, slumdwellers, in short a large majority of your poor people). On 27 December 2006, your Supreme Court decreed that banks had to grant full compensation to savers who had been swindled.

Argentina, five years ago, almost to the day, three presidents of the Republic succeeded each other within a few days. De la Rua fled on 21 December 2001, and his successor, Adolfo Rodriguez Saa, was replaced by Eduardo Duhalde on 2 January 2002. You decided on a suspension of payment of your external debt for about 100 billion dollars, i.e. the most significant such move in history. It affected private creditors as well as the rich countries in the Paris Club; hundreds of plants and factories, abandoned by their owners, were occupied by workers, who started production again; unemployed people were empowered by the piqueteros movement; your currency was steeply devalued; your citizens created local currencies and shouted a unanimous demand to your polticians “Que se vayan todos !” ("Let them all go away! »).

Argentina, after 25 years of uninterrupted agreement between the IMF and your government (from the military dictatorship between 1976 and 1983 to the De la Rua government via Carlos Menem’s corrupt regime), you showed the world that one country could stop paying its debt in the long term without creditors being able to organise efficient reprisals. The IMF, the WB, the governments of the more industrialised countries, and major media had announced chaos. And what happened? Far from sinking you started recovering.

Argentina, Nestor Kirchner, the president your people elected in May 2003, challenged private creditors with his proposal to exchange their securities against new ones at a lower price. After long negotiations that ended in February 2005, 76 % of them accepted to waive over 60% of what their credit was worth. The whole world was looking at you, and you showed that a people could say no.

Argentina, what came next was far more disappointing. For this agreement eventually signified that private creditors would again be repaid. Moreover, exactly one year ago, your government repaid all its debt to the IMF in advance, 9.8 billion dollars all in all. We grant you that you saved USD 900 million in interest, but those who made this decision must have been struck with severe amnesia. Supported by the IMF and all major powers, General Videla’s dictatorship had used the debt to reinforce its hold on the country, to make its leaders richer, and to fashion the country in the dominant model. To meet repayments, ensuing governments sold off a large part of the national patrimony and contracted new debts that are just as odious. Furthermore those new loans were only granted on condition that massive liberalisation and privatisation measures be implemented as well as social expenditures be drastically reduced.

Argentina, your leaders could have found a better use for this money and their example could have been followed on all continents! They could have denounced the agreements with the IMF and the WB. They could have found support in the Olmoz court decision pronounced by the Federal Court of Justice and put forward solid legal arguments to decide that the debt is odious and must not be repaid.

Argentina, we are astounded to hear that your government is currently negotiating with the Paris Club, i.e. with a scandalous institution that unites representatives of 19 rich countries every month, behind closed doors at the French ministry of economy. You must know that the aim of this most secret club is to force highly indebted developing countries to repay their debts without taking social consequences into account. You owe the Club some USD 6.3 billion, but once again this debt did not benefit your people. On the contrary countries in the Paris Club, the IMF, the WB, large TNCs have used it for decades to oppress you, to coax your governments into selling your public services to private providers, deregulating your economy, and meekly submitting to severe cuts in your social budgets. Fernando Solanas’ movie “La dignidad de los nadies” (“The Dignity of the Nobodies”) clearly exposes the predicament of extreme poverty this led to.

Argentina, your president must now choose between serving your people and serving your creditors. Most unfortunately, he has obviously aligned his policies on foreign expectations. He even went to the New York stock exchange last September to ring the opening bell. As a consequence the amounts you will repay in the coming years will make it impossible to develop alternative policies to the neoliberal model. Your social demands, however justified, cannot be met as long as you do not denounce this debt as odious.

Argentina, five years ago, people in the streets were pointing in another direction, one which could bring lasting changes, and would benefit the people. Today, this is still the direction we ought to take.

Translated by Christine Pagnoulle, with the collaboration of Vicki Briault.


Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

Damien Millet

professeur de mathématiques en classes préparatoires scientifiques à Orléans, porte-parole du CADTM France (Comité pour l’Annulation de la Dette du Tiers Monde), auteur de L’Afrique sans dette (CADTM-Syllepse, 2005), co-auteur avec Frédéric Chauvreau des bandes dessinées Dette odieuse (CADTM-Syllepse, 2006) et Le système Dette (CADTM-Syllepse, 2009), co-auteur avec Eric Toussaint du livre Les tsunamis de la dette (CADTM-Syllepse, 2005), co-auteur avec François Mauger de La Jamaïque dans l’étau du FMI (L’esprit frappeur, 2004).