Argentina Unveils Sweeping New Economic Plan Thomas Catán

The government of Argentina on Sunday set out a sweeping new plan to deal with the country's economic, social and constitutional crises. At the heart of the new plan is an effort to end Argentines' long love-affair with US dollar, which for 10 years has been used interchangeably with the peso. The government, which jettisoned the dollar peg last month, plans to float the currency entirely as early as this week, albeit with heavy state regulation to stop it from plunging. "We are going to 'pesify' the entire Argentine economy," said Jorge Remes Lenicov, economy minister. "We want our own…

Power to the Powerful in South Africa, but the People also have Power Patrick Bond

It's a criminal gang,' announced Jeff Radebe, the African National Congress (ANC) minister of public enterprises, at a December (2001) press conference. He was blasting activists of the Soweto Electricity Crisis Committee (SECC) for their 'Operation Khanyisa!'--reconnect the power! -- campaign. Over six months, more than 3,000 families had their electricity supplies illegally switched back on, after being left in darkness when they couldn't afford to pay their enormous monthly bills. SECC volunteers risk electrification to do the work, and charge their neighbors nothing for the service. Radebe, ironically, is a leading member of the SA Communist Party. In May…

What happened to Argentina? Mark Weisbrot and Dean Baker

Policy failures played a role in Argentina’s economic collapse. The most important mistake was the fixed exchange rate. But the immediate cause of Argentina’s crisis was a series of external shocks that were beyond its control, beginning with the US Federal Reserve Board’s decision to raise interest rate in February of 1984. The effect of these shocks was much worse than it otherwise would have been because of the fixed exchange rate. But the commonly believed story that the government could not accept a sufficient dose of the painful medicine of austerity, or spent its way into a hole, is…

Economic Growth, Poverty and Income Distribution in Brazil Carlos Aguiar de Medeiros

(Paper prepared for the Conference "New Ideas on Development Economics Growth and Distribution Under Financial Globalization". Rio de Janeiro, January, 28 and 29, 2002) What distinguishes Brazilian society today is not only the poverty of 31% of its population – 54 million inhabitants in 2000 - but the extraordinary income gap between the very rich and the poor people . According to the World Bank Indicators for 2001, amongst 152 countries only 5 – Central African Republic, Nicaragua, Sierra Leone, South Africa, Swaziland – have an income Gini index higher than Brazil. This economic contrast in a medium income level…

Porto Alegrecan Put a Debtor’s Cartel on the Global Agenda Jeremy Brecher, Tim Costello and Brendan Smith

International investors have imposed their will on the world by means of a creditors cartel""embodied in the IMF, the World Bank, the G-7/8, and their creatures and allies. They have imposed cruel and destructive policies on the people of debtor countries. The elites that control most debtor governments have often cooperated with the foreign investors and enriched themselves. Now the people of Argentina have said: Enough! As long as Argentines act alone, the creditors cartel will have the power to impose further cruelties on the max "and they're preparing to do so. But there's a strategy for turning the tables…

The Rise and Fall of Enron Updated April 26, 2002

In December 2001, Enron filed the biggest bankruptcy protection case in US history. Ten congressional committees and federal agencies have announced investigations into suspected illegal activities at the once high-flying firm. Enron's swift rise in 10 years was powered by the deregulation of energy markets in the 1990s. Good political connections and publicity ensured a favourable legislative climate. Enron's methods accumulated fantastic wealth in the hands of top executives who sold their stock before the company went bust. Thousands of other employees, trapped in a lock-stock arrangement, lost their savings and pensions. In a hearing before the Senate Commerce, Science,…

Confronting the IMF – Argentina’s Road to Recovery Tom Gill

"For many years in Argentina," declared Eduardo Duhalde as he assumed the presidency on January 1, "they have made us believe that amid this new world order, there is only one possible economic model. This is a complete falsehood." Argentinians, who once lived in a country as rich as France, will be hoping he is right. These days, after two-and-half-decades of IMF-backed free-market reforms, more than 40% of the 38m population live below the poverty line and 100 children die daily from hunger and disease. As a leading member of the Peronist party, which under Carlos Menem brought Argentina to…

On Some Common Macroeconomic Fallacies Prabhat Patnaik

Fallacy 1: The interest rate in the Economy is High because the Fiscal Deficit is high The interest rate is the return on a particular asset, namely a debt instrument. It must be determined therefore as part of a stock equilibrium. The fiscal deficit is a flow concept. To say that the interest rate is determined by the size of the fiscal deficit is tantamount to saying that the price of a stock is determined by a flow, which is plain illogical. But, it may be argued, while the fiscal deficit may not determine the interest rate, it certainly affects…

The Macroeconomics of Imbalance and Adjustment C.P. Chandrasekhar

This article traces the theoretical lineage of neoliberal macroeconomic policies. It provides a critique of these theories and relates the changes in the theory underlying IMF-style stabilization and adjustment to the imperatives generated by the rise to dominance of finance capital internationally. macroeconomics (Download the full text in PDF format)

Distraught Argentines Look for Solutions

Peso plunges by 44 pc against dollar Argentina’s peso tumbled as much as 44 per cent against the dollar as exchange houses opened for the first time since the Government said it would devalue the cur­rency and default on its debts. The peso was quoted at 1.8 per dollar at money-changers in Buenos Aires, indicat­ing President, Mr Eduardo Duhalde, will fail to keep it fixed at the 1.4 rate set, trad­ers said. Mr Duhalde gave up the one-to-one peg to the dollar, in place for a decade, in a bid to revive growth and rebuild confi­dence in the economy. Hundreds…