Argentina Opinion

FOREIGN DEBT: SYSTEMATIC PLUNDERING

Luis Meiners and Cele Fierro are both members of the national leadership of the Movement of Socialist Workers in Argentina.


In Congress, the Frente de Todos y Juntos por el Cambio (Everyone’s Front and Together for Change) gave a “message of unity” to the IMF and vulture funds. They showed that on the questions that define the general direction of the country, the gap is closing. They validated the debt of the Macri Government and with it the entire system of plunder that is the external debt. It is a new chapter of the fraud that has already been going on for decades and of which all governments have been participants.

One of the fallacies most commonly constructed about the external debt is the one that compares it to an individual loan given by the corner store or a friend, in order to later conclude that the debt must be paid almost as a matter of honour. The reality is far from this fiction.

The external debt is a tool used to transfer wealth, in a systematic fashion, from the working class and people to the most concentrated sectors of the bourgeoisie (both “national” and foreign), and from the semi-colonial dependent countries to the imperialist countries. It is a vacuum which maintains the flow of money to the top and out of the country.  

A Look at History

Although the external debt has existed for hundreds of years, its importance as a tool of wealth extraction and imperialist subjugation has grown and been consolidated since the 1970s. Coinciding with the deceleration and crisis of the main world capitalist economies since the end of the 1960s and beginning of the 1970s, external debt of the semi-colonial countries has grown exponentially, especially in Latin America.

In Argentina, this exponential leap began under the genocidal dictatorship. Between 1976 and 1983, the debt grew from $7.8 billion to more than $45 billion. Two key elements explain this leap and at the same time illustrate how the tool of external debt works.

The first is the financial bicycle. The capitalists bring money to Argentina to then later take it out, benefiting themselves by way of the international interest rates compared to the elevated interest rates that the national banks and financial institutions pay.

Since the return of democracy, all governments have accepted the debt, beginning with the government of Alfonsín, under which it reached almost $60 billion. It ballooned even further under President Menem to maintain the convertibility that favoured speculators and private businesses. It continued to go up under President De la Rúa and also under the Kirchners, despite the fact that in their 12 years in power they became the government that paid more of the debt than any other.

Macri y Alberto

This tool expanded even more under the government of Mauricio Macri. During his term as president (2015-2019), the debt grew by more than $100 billion, of which almost 90 percent, some $88 billion, left the country through capital flight. The government of Alberto Fernández, after having stated on the campaign trail that the money of the debt had ended up going to Macri’s friends, sent to Congress a law to validate it and continue paying it.

Under the name of “Restoration of the Sustainability of the Foreign Public Debt,” the entire Congress, except the FIT-Unity, endorsed a renegotiation of the debt incurred during the previous government. All of it without even investigating a single line of how “it went to the friends” of the ex-president.

By continuing to pay, this government, just like the previous ones, seeks to adjust the working class. That’s why they are taking measures such as pension reform and seeking to freeze salaries.

To Break the Tool of Foreign Debt

The debt transfers money from the pockets of the working class and people to the top and outside. When all the credit entered the country, the workers and people did not see one peso. It went to lining the pockets of the capitalists that demanded dollars to maintain the financial bicycle and the outflow of capital. But when it comes time to pay, they always make it at the cost of a brutal adjustment of those at the bottom.

The debt is illegal, illegitimate, fraudulent and un-payable. As a result, we propose a citizens’ audit that shows who has been enriched by this perverse tool, and we hold that we do not have to pay one peso of the debt. Additionally, we must break off relations with the IMF and other international credit bodies that seek to deepen the submission of our economy.

Sovereign Default, the Only Exit in Support of the Majority

Using the entire political and media superstructure, national and international, they work to convince the popular majority that the only exit available to countries that contract loans with international credit organisations, is to pay their debts to the last dollar, even though it is through renegotiations that include new conditions.

To this they add a hypothetical situation of political and economic catastrophe that non-payment would generate. The reality is that these are arguments to justify remaining under the auspices of the IMF and, in the case of our country, to continue “honouring” an illegitimate and fraudulent debt.

It is important that we demystify default and cessation of payment. We propose the declaration of a sovereign default, as a first step (but not the only) to take real control of the economy of our country.

To the question “What happens if we don’t pay?” The first real and concrete answer is that the resources that would have been marked to pay the fraud that is the debt would go to resolving structural problems such as the generation of genuine jobs through public works, giving pay rises and pensions, making social plans, increasing the budgets for health and education, among many other things.

With just the non-payment of the 2020 debt that is soon due, we could build around half a million social houses, generate two million jobs, and double the health and education budgets. It would be an approach favourable to workers, pensioners, the youth and the popular sectors.

To these measures must be added policies to take control of the pillars of the economy, beginning with the nationalisation of the banking sector and foreign trade to stop capital flight and to be the ones that determine what is exported and imported on the basis of the real needs of the population. On top of this, we must bring about the nationalisation of all public services and ensure that they are controlled by their workers and users. 

When they suggest to us that we are going to become isolated from the world and suffer blockades and interventions, it is wise to remember and to stop to analyse the global situation. On one hand, multiple countries have repudiated debts, including the United States, twice. There is international jurisprudence over “odious debts” to endorse non-payment. On the other hand, in a world of crises, relationships with other countries can be established.

Having said this, measures can be taken against all capitalists that want to act against the sovereign decision of non-payment, starting with an embargo and property expropriation of foreign creditors. Also, we can build momentum for a front of debtor nations to oppose the imperialist extortionists.

All these measures can be taken if there is a political project to break with the interests of imperialism and not to submit, which is what we see in the current government. During the campaign, Fernández denounced the fraudulent debt contracted with the IMF and of which 80 percent has already left the country. That is to say, we did not see one peso.

And now, he travels all over the world in search of support for a renegotiation that is simply a payment and legitimation of the fraud that the people have endured.

This is why an anti-capitalist political project is needed. A project that puts the resources of the economy to work in favour of workers and that stops being the guarantor of the interests of capital. That project is the one that we are building in the MST and FIT-Unity, and we call on you to join and strengthen the campaign for non-payment of the debt.

This article has been translated and edited by Decembrist, it originally appeared on the International Socialist League.

1 comment on “FOREIGN DEBT: SYSTEMATIC PLUNDERING

  1. Ahanasios Malakopoulos

    Argentina has long been a victim of the non-humane treatment suffered by its people with the help of international big finances and domestic control classes!
    It’s time to put an end to this vicious cycle.
    I really hope that the new forces can make the Argentine people realize their best and give all possible support to get rid of both the foreign and domestic bloodsuckers!

    Like

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