Economic Scorched Earth punishment for Argentina’s rejection of neoliberal order

13.08.2019 - London UK - Silvia Swinden

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Economic Scorched Earth punishment for Argentina’s rejection of neoliberal order

“This Sunday the primary elections have just taken place in Argentina, which although they only defined the candidates of each force for next October’s elections, had a relevant importance to evaluate the advance of the opposition to Macri’s government; and the result has been conclusive: the opposition formula of the Frente de Todos (which carried ex president Christina Fernandez as candidate to the vice-presidency) obtained more than 47% of the votes, while Macri’s officialism barely surpassed 32%.

“It was of little use to the government to have the media coverage of the main media; it was of little use to have the support of local and international economic power, including the IMF; it was of little use to it to have the support of Trump, Bolsonaro, and all the neoliberal rights. Because he did not have the support of the people; a people fed up with the closure of sources of work, the increase in poverty and indigence, the indebtedness of the country for Macri’s friends to flee abroad. A people tired of the fact that half of the children are poor and that the retired cannot buy medicines and eat only once a day. A people tired of justice being manipulated to persecute and imprison opponents, both of politics and of the few opposition media.” Guillermo Sullings, Argentinean economist made this analysis for Pressenza.

The reaction of “the markets” began swift and draconian. The strategy? Attempting to arm twist the population to change its mind for the October elections, and just in case take any capital left out of the country: a real scorched earth in economic terms:

  • Argentina’s currency was devalued by 30%
  • Financial analysts warned of the country defaulting on its debt, which caused markets to slump in response.
  • Shares in Argentinian companies also fell sharply with the country’s Merval stock index tumbling by almost 30%. 
  • The cost of insuring government bonds from default went up.
  • Neoliberal economists warned this would deter investors.
  • No doubt the Credit Rating Agencies (Standard and Poor, Moody, etc) are getting their knives out prepared to make borrowing as expensive as possible and as unrepayable  as possible, as they had done before in Argentina contributing to its economic collapse.

International Financial Capital does not accept rebellion. Any attempt by any country to refuse the neoliberal discipline of austerity and exploitation for the poor and obscene concentration for the rich is met with embargoes (Venezuela, Cuba, Iran, etc) and further punishment for third parties that dare to defy them. This cruelty is generating a level of violence in the populations that now is reaching unbearable levels. 

At the same time the blatant manner of this shameful display of relentless boasting of unrestricted power is in fact creating more awareness amongst ordinary people and we have seen also new political figures coming out to denounce and propose alternatives. And now the people in Argentina have joined them. Through the force of unity and conviction, inspired by the need to humanise the economy and themselves, understanding that Big Money is not a god but a human strategy, the journey begins for a country to attempt to find its alternative path out of the neoliberal mess.

Categories: Economics, Opinions, Politics, South America
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