Argentina Faces Medical Crisis

With banks remaining closed for the 19th day, the Argentine President ,Eduardo Duhalde, declared a national medical emergency due to a shortage in medications such as insulin, local news agencies reported. The Foreign Minister, Carlos Ruckauf , returned from Brazil yesterday with 275,000 doses of insulin donated by the Brazilian Government, the first instalment of a larger donation.The Presidential spokesman , Eduardo Amadeo , said that Duhalde, a populist Peronist, had appointed Juan Pablo Cafiero, a centre left politician, as interim Social Affairs Minister to ``take all necessary measures to ensure that products are available''. Argentine laboratories have stopped producing…

US Demands a Secure, Complaint Hemisphere Janette Habel

"The key question about the defence of the American hemisphere is: what is the threat? In the past, the Americas faced a relatively well-defined threat that the average American could understand (1). Today that threat has become infinitely more complex and more difficult to define." That was Professor Lewis Arthur Tambs, diplomat, historian, professor at Arizona State University and the author of a report on the future of the Americas, summarised in nine points the nine Ds the guiding principles for the hemisphere's security before 11 September. (They are defence, drugs, demography, debt, deindustrialisation, populist post-cold war democracy, destabilisation, deforestation…

Argentina’s Collapse Incited the Largest Default in History Joseph Stiglitz

Pundits agree this is merely the latest in a string of bail-outs, led by the International Monetary Fund (IMF), that squandered billions of dollars and failed to save the economies they were meant to help. Some claim the IMF was too lenient while others say it was too tough. And some see the problem as self-inflicted through profligate and corrupt spending by Argentina .Such attempts at blame-shifting are misguided: The default can be seen as the result of economic mistakes made over a decade. Understanding what went wrong provides important lessons. The problems began with the hyper-inflation of the 1980s.…

Tackling the World Recession John Grieve Smith

Few now doubt that the turbulent international situation has exacerbated and economic slowdown already underway across the advanced economies. The threat of recession has also led some to suggest that the pendulum might be ready to swing back from the monetarist and neoliberal consensus of the late twentieth century to a modernised and internationalist Keynesianism for the twenty-first. John Grieve Smith takes stock of these shifts, arguing that while the US has shown encouraging signs, EU and UK policymakers are still too wedded to the deflationary bias of the past. Furthermore, the paper argues, the mood for "re-ordering the world"…

Recession, Then a Boom? Maybe not this Time David Leonhardt

In decades past, the next step for an American economy in recession would be clear. It would boom. People would start spending again, and companies would quickly increase production, creating hundreds of thousands of jobs and fattening paychecks. In a quickly widening spiral, these developments would lead to even more spending. But the rules for recoveries may well be different today - not because of Sept. 11, but because of fundamental changes in the economy. Even after a year-end flurry of good news on home sales, consumer confidence and jobless claims, the recovery likely to start in 2002 could be…

Multilateral Agreement on Investment: A Briefing on the Investment-Related Disciplines and the WTO Ajit Singh

Three years after the OECD abandoned its controversial Multilateral Agreement on investment (MAI), a group of advanced countries, including the EU and Japan are again attempting to establish a similar agreement, this time at the WTO. From the submissions made by these countries at the WTO's Investment and Trade Working Group, it would seem that they would like an agreement which would provide investors with high standards of protection as well as free dom to invest anywhere and in any activity (subject to the usual exceptions for defence, culture etc.). One important difference between the OECD's MAI and the advanced…

An Alternative Policy Framework for India Jayati Ghosh & C.P. Chandrasekhar

The overarching implication of the spate of financial crises that have ravaged Asia, Russia and Latin America is of course that the threat of deflation, driven by a financial crisis is real. In fact, once integration with globalised finance proceeds beyond a point, the state of a country, as reflected by its GDP growth or inflation rate, or even the size of its foreign exchange reserves, need not be adequate to predict an imminent crisis. East Asian economies had performed very differently in the period immediately preceding the crisis, and Brazil despite "qualifying" for a $42 billion IMF package, could…

How the IMF Messed Up Argentina Mark Weisbrot

Argentina's implosion has the fingerprints of the International Monetary Fund all over it. The first and overwhelmingly most important cause of the country's economic troubles was the government's decision to maintain its fixed rate of exchange: one peso for one U.S. dollar. Adopted in 1991, this policy worked for a while. But during the past few years the dollar has been overvalued, which made the peso overvalued as well. Contrary to popular belief, a "strong" currency is not like a strong body. It is very easy to have too much of a good thing. An overvalued currency makes exports too…

The Riddle of Putin Boris Kagarlitsky

There is evidently some kind of natural law at work: if the business press and the leaders of the financial world name some country or other as a success story, then this is precisely the country where you can expect things to go badly wrong. Not long ago the newspapers were full of rapturous accounts of the Argentinian economic miracle. We were urged to study and reproduce the "Argentinian model". Now Argentina is on the verge of bankruptcy, unemployment has become a national catastrophe, and the population no longer believes anyone. In the recent parliamentary elections, voters crossed out all…