|January 31, 2002||atimes.com|
THE ROVING EYE
Argentine heavy metal rocks the globe
By Pepe Escobar
BUENOS AIRES - It's 11pm on a Friday in the historic Plaza de Mayo, in front of the Casa Rosada, the presidential palace in Buenos Aires, and the deafening soundtrack under the pouring rain adds new meaning to the term "heavy metal". This is no tango: we are right in the middle of another monster cacerolazo - the pan-rattling ritual Argentines spontaneously created last month when this country, historically with a high level of political, trade-unionist and corporate organization, finally woke up to say "No!" not only to four presidents in two weeks but to the whole of their political-economic system.
A cross-section of the Argentine capital was again marching and dancing in the streets: whole families, liberal professionals, menial workers, university students, old-age pensioners. The cacerolazo was called by Internet and by snail mail. Punctually, by 8 pm thousands of residents started gathering peacefully in the central intersections of all Buenos Aires neighborhoods.
Their war cry: "Que se vayan todos!" (All of them out!). Their demands: free elections - to get rid of a corrupt political system. Out with the also supremely corrupt members of the Supreme Court. Justice applied to the officials who robbed the nation - a long list that includes, among others, former presidents Carlos Menem and Fernando de La Rua, and former miraculous minister and International Monetary Fund (IMF) darling Domingo Cavallo. Guarantees for their bank savings - in the form of a "pesification", the conversion of debts in dollars into pesos.
As with many other cacerolazos, this was an all-out exercise in direct democracy - the writing not only on the wall but on plenty of posters and banners, alongside "IMF go home" and "Thieves! Give us back our money." In Buenos Aires alone, now there are more than 40 neighborhood assemblies. They get together almost every night on weekdays, discussing solutions to common problems, all of them absolutely against allegiance to any political party - "because they all failed", as a resident of Santelmo put it. Some associations are even promoting a "world cacerolazo" this Saturday and Sunday, uniting all the Argentines living abroad, mostly in Italy, Spain and the United States.
This is still the Paris of Latin America - one of the great world cities, with a fabulous cultural tradition, and home to outstanding writers and analysts. But now beggars roam the streets, not only in the famous pedestrian shopping mall of Calle Florida but also in the chic Puerto Madero - the Buenos Aires version of the renovated London docklands. Argentine meat remains the best in the world - but middle-class families on Sundays only flock to cheap neighborhood restaurants, not to flashy Puerto Madero.
The numbers concerning neoliberalism's "model student" are harsh. In a country of 36 million people, in the past 25 years unemployment went from 3 percent to 20 percent, extreme poverty from 200,000 people to 5 million, poverty from 1 million to 14 million, and illiteracy from 2 percent to 12 percent of the population.
Between 1976 - the beginning of the military dictatorship - and 2001, Argentina's public debt was multiplied by a factor of 16: it went from US$8 billion to $132 billion. Obviously most of the debt was not incurred to help the Argentine people. There was massive capital flight, due to rampant corruption by the military - also responsible for the killing of 30,000 people - and the shady dealings of the political class, such as the Menem Mafia.
Also from 1976 to 2001, Argentina had to bend over backwards to pay back $200 billion to its creditors - 25 times what it owed in 1975. The debt was always rising: the country had to go into debt to pay its interest. There cannot be a more graphic case study of transfer of wealth from the South to the North. Argentina always followed to the letter the IMF's dreadful policy of "structural adjustment".
Now people rattling their cutlery against their frying pans are victims of a financial corralito - the impossibility to have access to their savings - and cannot find a way out of the economic labyrinth. Pressure from the cacerolazos faces pressures from all sorts of political-economic lobbies. But the social repercussions of the chaos in what was once one of the richest countries in the world and arguably the most civilized and sophisticated of Latin American nations are being echoed all over the world.
Stunned, commentators in the Arab world ask themselves why their streets are still quiet. Dictatorships like Ceausescu's in Romania, Suharto's in Indonesia and Milosevic's in Yugoslavia have fallen because of popular pressure - all of them replaced by (more or less) democratic regimes. In Argentina, 20 percent of the active population is unemployed: in most of the Arab world, the figure is even higher than 20 percent. Argentina's debt ($132 billion), although staggering, is smaller than Saudi Arabia's ($160 billion). One-third of the Argentine population now lives under the threshold of poverty - less than in most if not all Arab countries.
Eminent Iranian professor Daryush Shayergan always stresses the Islamic world is living in "holidays from history". The same theme is developed by the African news weekly Jeune Afrique-L'Intelligent or the London-published Arab paper Al Quds Al Arabi. They stress that the economic situation in Argentina is still better than in most Arab countries, such as Saudi Arabia, Egypt or Syria, with comparatively less corruption. And they simply cannot understand why Argentines revolt while Arabs remain engulfed in "passivity and submission".
Meanwhile, the international media and multilateral organizations compete in the memory-loss department - not to mention hypocrisy. It's a replay of their attitude during the Asian financial crisis. Argentina used to be the superstar of neoliberalism. Now, the Wall Street Journal, with characteristic arrogance, dismisses Argentina as a "banana republic", and IMF supremo Horst Kohler, referring to the crisis, says "the country will have to suffer" - as if Argentines themselves haven't had enough.
Kohler in fact was merely defending the interests of foreign banks in Argentina. They were not exactly in a festive mood when the Duhalde government decided to keep deposits in dollars while it "pesified" at the rate of 1:1 a great deal of dollarized debts, at least protecting debtors a little bit. The IMF obviously didn't like it - so the new economy minister, Jorge Lenicov, had to backtrack and declare, under pressure, that deposits will also be "pesified", at the official rate of 1.40 pesos to a dollar. In the end, it's a great deal for the banks but a nightmare for average Argentines, who are screaming "we've been robbed": the dollar is reaching 1.85 pesos in the streets, and people are queuing up to buy the odd dollar that becomes obtainable.
Through a scheme of "self-loans" or interbank loans, at least a documented $2 billion fled Argentina before the crisis, ending up in bank branches located in fiscal paradises. Banco Galicia sent away $400 million, the French bank BBVA more than $200 million, Citibank $100 million. Apart from the capital flight, the Argentine Central Bank also helped foreign banks to the tune of $3 billion. It is estimated at least $15 billion "disappeared" from Argentina in the last months of 2001 through investors and also international and national speculators. Argentine - and American - economists boasted the country had one of the strongest financial systems in the world. The system itself provoked massive capital flight.
In the next few days, the new Argentine government will be doing everything to break its international corralito. Foreign Minister Carlos Ruckauf is on a tour of the United States, Italy and Spain trying to convey the image of a government that is not populist or protectionist. Argentina has had a strategic relationship with the US for the past 12 years. But the international context does not favor Argentina at the moment.
Of six countries that defaulted during the 1990s, two revived within one year: South Korea and Malaysia. Another two - Russia and Ecuador - got out of it in two years and managed to grow around 5 percent in 2001. And another two - Indonesia and Thailand - took much longer to get back on track. Argentines are now asking themselves which will be their paradigm: South Korea, Russia or Indonesia. The Argentine default was largely expected by international markets, so international help is now much harder to get.
But Buenos Aires can always play the card of international terrorism in Latin America to get some attention. Social chaos in Argentina can have a contagion effect. Argentine officials stress that FARC (Fuerzas Armadas Revolucionarias de Colombia, or Revolutionary Armed Forces of Colombia) guerrillas are already established in Venezuela, Peru and Ecuador, and even in some Argentine provinces. Washington will not fail to take notice. Buenos Aires is counting on political support from Washington - which controls 20 percent of the IMF's votes - and also from the Group of Eight, through Spain, which although not a member of the G-8 retains the current rotating presidency of the European Union.
This government, though, it if lasts, has to fulfill a mission, demanded by all sectors of Argentine society: to change radically a model that fomented social injustice and was fueled by institutional and political corruption. It's not an ideological question. The effects of the present model and the attitude of its proponents have provoked a disaster, have almost broken the country in half, and are now rejected by the absolute majority of the population. Argentina faces a global crisis: political, institutional, social, ethical and moral. It's a cultural crisis, in an anthropological sense: like so many other developing nations, it has to cease being a wildly disparate congregation of individuals to become a modern society.
And of course nobody escapes the blame. With the exception of the military dictatorship, which established by blood and fire in the mid-'70s the foundations of the present model, all Argentine governments were elected and re-elected in the ballot box. But the civil society was always absent: there was never a serious national debate about the future of the country.
The Duhalde government may think all is not lost as long as the inflation rate and the dollar don't run out of control. But if negotiations with the IMF fail, Eduardo Duhalde is a dead duck. The sensible thing would be to call a general election as soon as possible. It takes two to tango: no economic system will be viable if the citizens themselves don't trust the country's institutions - their government, the political class and the justice system. The cacerolas won't go back to their kitchens. And the developing world - especially the Arab world - more and more will be tuning in to the heavy-metal sounds of the streets of Buenos Aires.
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