Vultures Here, Vultures There: the Never Ending Debt
Ver original del texto aquí: Buitres de aquí, Buitres de allá: la deuda de nunca acabar
The debt--despite being a truly taboo subject--is always a hot topic in Argentina. Its growth during the dictatorship, the recognition of its illegitimacy, and its conditioning of the return to democracy; its role in the privatizations, the application of harsh austerity measures, and the denationalization of the economy, leading to the collapse of 2001; the partial suspension of payments that allowed an economic recovery to get underway--all facets of the domination exercised through the debt during just the last three decades, with its dramatic costs in human, socioeconomic, environmental, and political terms.
The debt--despite being a truly taboo subject--is always a hot topic in Argentina. Its growth during the dictatorship, the recognition of its illegitimacy, and its conditioning of the return to democracy; its role in the privatizations, the application of harsh austerity measures, and the denationalization of the economy, leading to the collapse of 2001; the partial suspension of payments that allowed an economic recovery to get underway--all facets of the domination exercised through the debt during just the last three decades, with its dramatic costs in human, socioeconomic, environmental, and political terms.
Nevertheless, since
2005 the Argentine government has made an enormous effort
to convince the population that the problem of the debt is over. For sure, it
has had a lot of help from the economic
elite, their mass disinformation media, and a large part of the political opposition.
But after the mega
bonds swap that year, and the cash payout to the IMF--quite a reward for its
policies simultaneously being denounced as genocidal--the government has made
much fanfare of its so-called policy of "deindebtedness”. Endless graphs were
developed in an effort to show that the external debt no longer weighs on the
economy and that, especially after the second swap in 2010, there remained only
a few problem “holdouts”: purchasers of defaulted bonds who refused the
restructuring swaps in order to demand full payment of what they never
invested, and the government repeated as mantra it would not pay. Little
was said of the colossal increase in the internal intra-state debt, the
draining of reserves, or the growth of provincial and municipal debt. Not
even the imposition of currency controls in 2011 was enough to change the tune:
escalating external debt payments were seldom linked to the increased pressure
on foreign–currency reserves.
But in October
of 2012, the debt returned to the front lines when the vultures obtained the judicial
seizure in a distant African port, of the Argentine Naval frigate paradoxically
named Liberty. For sure, the accent was put mostly on the
manifest injustice of the hedge funds´ claims, seeking through the courts to
collect many times over what they had paid for the defaulted bonds in their
possession. Or attention was focused on
the similarly manifest arbitrariness of the New York courts' decisions, which
not only dictated the immediate, full cash payment of the total demanded by the
vulture funds, but also its payment under terms that would risk a
"technical" default of the rest of the debt that the government indeed
services religiously as a result of the 2005 and 2010 bond swaps.
The attack of
the speculative “vulture” funds further demonstrated the asymmetry of power
with which global capitalist finance and trade operate, including the
systematic dismantling of the judicial framework of national sovereignty which,
since the mid seventies, has been taking place in favor of the pretended "freedom"
and "rights" of capital and the mega-corporations that concentrate it
(A telling perversity of international law is the fact that sovereign immunity
is indisputable in the case of war-ships, but not in the case of the resources
needed by a State merely to feed its population...). But it also brought
to light a reality very different from the official story then being offered by
the government: a debt that continued to exist, to grow, and to condition the
liberty, prosperity, rights and sovereignty of the Argentine people.
Now, the year
2014 has kicked off with inflation officially exceeding a yearly rate of 40%,
the start of the school year delayed by the refusal to fix a wage-hike for the
teachers, a mega-devaluation recently concluded that automatically sends some 500,000
people below the poverty line, rapidly eroding reserves and public coffers flooded
with unrecoupable National Treasury bonds. The 2014 national budget,
approved just a few months ago and even more out of
phase with reality now than before, projected an increase in the debt of US$12.7
billion and a 73% increase in interest payments as compared to 2013.
These numbers will surely fall far short of
reality, yet they already amounted to an expenditure exceeding the total earmarked
for education and healthcare combined. And in November, Argentina surely entered
the annals of history by actually naming a "Minister for Debt Restructuring".
Although there is no transparency in the official statistics available, it will
doubtless become increasingly difficult to cover up the critical situation of a
debt that is again exploding in the hands of those who, far from having
resolved it as a problem, have only managed to kick it a little further
up-field.
In fact, the
government no longer talks about its policy of “deindebtedness" but rather
how to go back to indebting itself on international markets. That is why
it has been pursuing negotiations all over the place--with the Paris Club, the International
Center for the Settlement of Investment Disputes ICSID, the IMF, the World
Bank, the vulture funds--and has even now laid aside its objections to the
negotiation of a Free Trade Agreement - a sort of transatlantic FTAA - between
the European Union and the Southern Cone Market MERCOSUR. All in a race
to see whom it pays most and earliest--while teachers, pensioners, healthcare
professionals, and hungry children are asked to refrain from even getting in
line.
It is in this
context that Dialogue 2000 has
continued its action over recent years. We work to denounce the
tremendous human costs of this "development" model, which finds in
the system of indebtedness an almost perfect tool for the extraction of wealth
and permanent impoverishment, for territorial occupation and looting, and for
the suppression of sovereignty and self-determination. Likewise, we continue
to promote the networking and convergence of efforts among diverse sectors and
movements, inside the country and abroad, with the goal of building alternatives
that assure full compliance with the rights of all persons, peoples, nations,
and Mother Nature herself.
Today there is renewed
urgency in our call for a comprehensive
and participatory Debt Audit, with the suspension of all payments until the
legitimacy of the claims can be established. On the one hand, since the
illegitimacy and even illegality of a large part of these claims have been
proven for years, in part through the judicial investigations and court-appointed
expert findings incorporated into the well-known "Olmos Case". The final
court judgment in that case - awaiting execution since the year 2000 - invoked some
400 proven irregularities and violations of the law. And on the other
hand, because of the tremendous cost entailed by continuing to “honor” a totally
dishonorable debt, both in terms of the net extraction of the wealth produced
and needed by the Argentine people it provokes, and in terms of its sustaining
and deepening an economic model organized to serve the debt rather than the
population.
Despite claims
to the contrary, there is no law in the world that obliges a sovereign State to
pay an illegitimate debt claim, at the expense furthermore of the health,
education, employment, and indeed, ever-increasing indebtedness, of the people
it is supposed to defend and protect. The UN’s Guiding Principles on Debt and Human Rights reaffirm this over and
again, and the Independent Expert on Debt
and Human Rights, Dr. Cephas Lumina, highlighted this reality during the Mission
he undertook to Argentina in November of 2013, as can be seen in his
Declaration of initial findings and Final Report to the UN Human Rights
Council.
Among pending
tasks here in Argentina is that of pursuing the realization of a comprehensive Debt Audit, even without the
blessing of the Congress, constitutionally responsible for "managing"
the debt. Particular focus needs to be
brought on the claims that Paris Club member countries, and the government, are
pressing to settle. A 2007 presidential decree authorizes payment to the Paris
Club without stipulating either a final amount or conditions, and in January of
this year the Argentine Finance Minister made a new offer with the hope of finally
resolving the pending claims. We must continue to denounce the possibility of a Paris Club deal and mobilize in the
face of what is little more than a new instance of armed robbery: debts going
back 35 years to the dictatorship--in some cases for projects never carried
out--; newer debts to pay the old illegitimate claims and sustain the
privatizations supposedly imposed in order to pay the debt; usurious interest
rates and fines for not having been able to withstand the stranglehold.
We must also recognize that the government is now considering paying any amount
to the lender countries of the Paris Club, with the sole aim of initiating a
new cycle of indebtedness and looting which has nothing to do with people´s needs
or ecological rights. Enough!
To audit the
debt is to put to account the operations of the lenders and the concessions
made by the borrowers, the interests pursued by both and the various
debts--social, ecological, political, and economic--that their illegitimate
deals have generated against the rights of the
population. A comprehensive debt audit would allow us to demonstrate how
the vultures from abroad always fly in tandem with the vultures at home, and
how, among other favors, they both feed off the constant renunciation of
sovereignty invoked in the pertinent contracts and treaties.
That is why
another of the demands that Dialogue
2000 will continue to pursue this year is the voiding of all contractual debt obligations and bond emissions, and
treaties such as those for the protection of investments, free trade, and
recognition before the ICSID, which cede jurisdiction to foreign
courts and extra-judicial fora in a manner that is unconstitutional and in
violation of sovereignty. The vulture funds from abroad, the "bad
guys in the movie", would have far less chance to pursue their abusive
demands if the government did not continue to cede them a supposed
"right" to ignore Argentine sovereignty and the State´s obligation to
exercise its self-determination in favor of the human rights of the Argentine
people rather than the interests of potential foreign investors. At the
same time and with nearly the same arguments that in past years brought us
together to defeat the FTAA, we also will join forces with other organizations
and movements in the country and region to prevent the signing of a Free Trade Agreement between the European
Union and the Mercosur.
2014 already
looks to be a critical year, not only in Argentina--which is facing strong
economic, financial, and political pressures, the pre-electoral bankruptcy of
the government's own program, and huge challenges to the formation of an
alternative project—but throughout the region. Big capital and the powers
that protect it are hovering over the wealth we produce, our natural goods, our
lives, and our futures, and the perverse system of never-ending indebtedness
continues to be a powerful tool in its efforts to maintain and even strengthen,
their domination in the region.
For our part,
at Dialogue 2000 together
with the rest of the Jubilee South/Americas
network, we see no other option than to continue to denounce the human and
ecological cost of these policies, and to organize, mobilize, and above all strengthen
articulation among popular forces in order to put an end to the bloodletting
and promote alternatives that are emerging and growing, through the hope, the
struggles, and the integration of peoples throughout the region.
-Beverly Keene, Dialogue 2000 – JS
Argentina
Buenos Aires, February
20, 2014
Translation from the original
in Spanish, courtesy of C. Autremont.