Argentina is on the brink of collapse. There are nightly food riots throughout the country and five presidents have left office since December. After four years of recession, 18 percent of Argentineans are unemployed and 15 million people are living on less than $3 per day.
The roots of Argentina's economic crisis are complex. Government corruption and an overvalued peso have hurt the country's financial situation, but the International Monetary Fund has played a major role in destabilizing the country. In exchange for temporary relief on its $132 billion debt, the IMF forced Argentina to implement massive austerity cuts. These included a 13 percent reduction in state worker wages, deep cuts in education spending, slashing pensions and raising taxes.
In addition, the Argentine government has frozen bank withdrawals and devalued the currency by 30 percent. While wealthy multinational investors were allowed to pull their money out of the banks, ordinary citizens were met by armed federal police forces that stopped them from withdrawing their savings. With most people's assets in Argentina either evaporated or frozen, thousands of angry people have taken to the streets.
After the country's finance minister, Domingo Cavallo, launched an emergency raid on the country's pension funds in December, a huge crowd surrounded the presidential palace, forcing the president to leave the building by helicopter. The people were calling for new elections and the resignation of ministers who had supported austerity policies. When a crowd of 10,000 gathered in the country's capital square, they were beaten and gassed by riot police. Infuriated, the crowd marched to the Congress and tried to light the building on fire. Recently, public sanitation workers, who have not been paid for over a month, dumped trash into the streets and lit it ablaze.
The Argentineans are not the first people to suffer due to IMF structural adjustment policies. Both Indonesia and Russia faced social unrest when the IMF forced the countries to devalue their currency, and throughout the world developing countries are being told to weaken their environmental regulations in the name of industrial progress. For all the hype about how globalization is going to uplift the world's poor, the results most often have been increased suffering and desperation.
Economic policies that are designed to benefit rich investors, without concern for the plight of the poor, will only fuel social unrest. President Bush's response to Argentina has been to implement a policy of \greater austerity,"" which will most likely further cause chaos. Bush is committed to spreading U.S. economic power throughout Latin America with the Free Trade Area of the Americas.
Similar to the North American Free Trade Agreement, FTAA creates new international legal protections which insures the ""right"" of corporations to make profit. In order to enforce their new ""right"" to profit, a private, unelected and unaccountable tribunal system was created with the ability to control government policy and tax noncompliant countries for enormous sums of money.
Bush is fighting to win fast-track authority in the Senate, which would help him pass the FTAA. He has already won fast-track authority in the House of Representatives. If Bush succeeds in passing the FTAA, what is happening in Argentina may become commonplace throughout Latin America.
