A SOUTHERN HEMISPHERE HETERODOX SUCCESS STORY

<div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b><br /></b></span></div><div style="color: blue; font-family: Times,"Times New Roman",serif; text-align: justify;"><div style="text-align: center;"><span style="font-size: large;"><b>ARGENTINE ECONOMY LESSON FOR EUROPE</b></span></div></div><div style="color: yellow; font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b><span style="color: black;"><br /></span> </b></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Contrary to Argentine local main stream media, foreign media paint a somewhat different picture of the Eco-political situation of the country. In fact Argentina’s recovery after its default is frequently taken as the example on how Europe, to some extent, could overcome its economic crisis. In the German speaking part of Europe many Eco – political TV shows increasingly show interest in Argentines recovery and economic growth even though it did not adhere to IMF, World Bank and Wall Street doctrines, thus challenging “EUROCRATS” to follow suit. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">As growth in Argentina continued, the critics in the Financial Times and the Wall Street Journal claimed it would end once “unused capacity was exhausted”. Instead growth earnings financed the expansion of the domestic market and created new capacity for growth, especially to new markets in Asia and Brazil. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Contrary to thesis proclaimed by economic experts, Argentina still has a substantial amount of funds available and thus is not in immediate danger of running into financial problems. Argentina still draws from its favorable crop exports. Even if prices of soya are down, the ever increasing worldwide population increases the need to feed the people. Thus supply of food commodities will not subside, even if speculators manipulate price trends. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="color: blue; font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b>ARGENTINA CONFOUNDED THE PRESTIGIOUS ECONOMISTS </b></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">The Argentine experience goes counter to all the precepts of the international financial agencies (the IMF, World Bank), their political backers, and publicists in the financial press. From the first year (2003) of Argentina’s recovery to the present, the economic experts have “predicted” that its growth was “not sustainable” – it has continued robustly for over a decade. The financial writers claimed the default would lead to Argentina being shut out of financial markets and that its economy would collapse. Argentina relied on self-financing based on export earnings and re-activation of the domestic economy and confounded the prestigious economists.</span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="color: blue; font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b>THE ARGENTINE ALTERNATIVE TO BAILOUTS AND POVERTY </b></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Even as late as October 25, 2011, Financial Times columnists still prattle about “the coming crises” in the manner of messianic fundamentalists who predict the pending apocalypse. They harp on “high inflation”, “unsustainable social programs”, “overvalued currency”, and more predictions of “the end of prosperity”. All these dire warnings occur in the face of continued growth of 8% in 2011. Anglo-American financial scribes should focus on the demise of their free market regimes in Europe and North America instead of denigrating an economic experience from which they might learn. </span></div><div style="font-family: Times,"Times New Roman",serif;"><span style="font-size: large;">(See: Food for Thought, the Anglo – Saxon Quest<a href="http://www.blogger.com/goog_1731534439"> </a><a href="http://www.blogger.com/goog_1731534439">http://news-these-days.blogspot.com/2011_10_01_archive.html</a><a href="http://news-these-days.blogspot.com/2011_10_01_archive.html%20">)</a></span></div><div style="font-family: Times,"Times New Roman",serif;"><span style="font-size: large;"><br /></span></div><div style="color: blue; font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b>ARGENTINA IS NOT TOTALLY DEPENDENT ON PRIMARY EXPORTS</b></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">In refutation of the Wall Street critics, Mark Weisbrot and his associates point out (“The Argentina Success Story”, Center for Economic and Policy Research, Oct. 2011) that Argentina’s growth was based on the expansion of domestic consumption increased manufacturing exports to regional trading partners as well as traditional agro-mineral exports to Asia. In other words Argentina is not totally dependent on primary exports; it has balanced trade and is not over dependent on commodity prices. In regard to high inflation, Weisbrot points out that “inflation may be high in Argentina but it is real growth and income distribution that matter with regard to the well-being of the vast majority of population”. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div class="separator" style="clear: both; font-family: Times,"Times New Roman",serif; text-align: center;"><span style="font-size: large;"><iframe allowfullscreen="allowfullscreen" frameborder="0" height="266" mozallowfullscreen="mozallowfullscreen" src="https://www.youtube.com/embed/xyNUzqlDNeA?feature=player_embedded" webkitallowfullscreen="webkitallowfullscreen" width="320"></iframe></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Argentina created a state more accommodative to its political project of financing economic competitiveness, new markets and social programs. Argentina ensured that the banking sector financed the growth of the export sector, manufactures and domestic consumption. Argentina imposed a 75% “haircut” on bondholders in order to finance social spending. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">In Argentina the economic catastrophe provided Argentines with an opportunity to bring about a basic shift from speculative pillage to social programs and sustained economic growth. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">The current government reflects its success in creating a ‘normal’ capitalist welfare state. After 30 years of US backed predator neo-liberal regimes, this move stimulated great positive change. From 1983to 1989 Argentina’s suffered under a neo-liberal regime (Raul Alfonsin) which failed to deal with the dictatorial legacy and which presided over triple digit hyper-inflation. From 1989 – 1999 under President Carlos Menem Argentina witnessed the biggest sell-off of its most lucrative public firms, natural resources (petrol included), banks, highways, to foreign investors and kleptocratic cronies for bargain basement prices. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Last but not least, Fernando De la Rua (2000 – 2001), promised change and proceeded to deepen the recession that led to the final catastrophic crash of December 2001 and the closing of the banks, the bankruptcy of 10,000 firms and the collapse of the economy. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Against this background of total and unmitigated failure and the human disaster of US – IMF promoted “free-market” policies, Kirchner/Fernandez defaulted on the external debt, re-nationalized several privatized firms and the pension funds, intervened the banks and doubled social spending, expanded public investment in production and increased popular consumption, on the road to economic recovery. By the end of 2003 Argentina turned from negative to 8% growth. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="color: blue; font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b>HUMAN RIGHTS, SOCIAL PROGRAMS AND INDEPENDENT FOREIGN ECONOMIC POLICY</b></span> </div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><b> </b> </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Argentina’s economy has grown over 90% from 2003 – 2011, over three times that of the United States. Its recovery has been accompanied by a tripling of social spending, especially on programs reducing poverty. The percentage of poor Argentines has declined from over 50% in 2001 to less than 15% in 2011. In contrast US poverty has risen over the same decade from 12% to 17% and is on an upward trajectory over the same period. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">The US has become the country with the greatest inequalities in the OECD with 1% controlling 40% of the country’s wealth, (up from 30% in less than a decade). In contrast, Argentina’s inequalities have shrunken by half. The US economy has failed to recover from the deep recession of 2008-2009, during which it declined by over 8%. In contrast Argentina declined less than 1% in 2009, and has been growing at a healthy 8% (2010-2011). Argentina has nationalized pension funds, doubled basic pensions and introduced a universal child welfare program to counter malnutrition and guarantee school attendance. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">In contrast 20% of children in the US are now suffering from poor diets, drop-out rates are increasing for adolescents and malnutrition affects over 25% of minority children. In Argentina the income of wage and salaried workers has increased over 50% over the decade in real terms, while in the US they have declined by nearly 10%. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Argentina’s dynamic growth of GNP has been fueled by growing domestic consumption and dynamic export earnings. Argentina has a consistent large trade surplus based on favorable market prices and increased competitiveness. In contrast domestic consumption has stagnated in the US, the trade deficit is close to $1.5 trillion dollars and revenues are wasted on non-productive military expenditures of over $900 billion a year. </span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Read also related articles on Argentines heterodox economic success story</span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><a href="http://www.cepr.net/index.php/publications/reports/the-argentine-success-story-and-its-implications">http://www.cepr.net/index.php/publications/reports/the-argentine-success-story-and-its-implications</a></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><a href="http://www.accuracy.org/?s=argentine+success&submit.x=15&submit.y=9">http://www.accuracy.org/?s=argentine+success&submit.x=15&submit.y=9</a></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><a href="http://www.blogger.com/goog_1731534453">http://issuu.com/washdiplomat/docs/diplomat.november2011</a></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;"><br /></span></div><div style="font-family: Times,"Times New Roman",serif; text-align: justify;"><span style="font-size: large;">Extracts of </span><span style="color: yellow; font-size: small;">Prof.</span><span style="font-size: large;"><span style="font-size: small;"><span style="color: black;"> </span><b style="color: black;">James PETRAS</b> </span>article: “Argentina, from crises to dynamic growth” have been adapted into this article.</span></div><div class="MsoNormal" style="text-align: justify;"><br /></div><div class="MsoNormal" style="text-align: justify;"><br /></div>

A SOUTHERN HEMISPHERE HETERODOX SUCCESS STORY

ARGENTINE ECONOMY LESSON FOR EUROPE Contrary to Argentine local main stream media, foreign media paint a somewhat different picture of the ...

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