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Argentina: Program for a Popular Economic Recovery

In 1976, a military dictatorship seized control of Argentina. A period of terror swept the land as 30,000 people were “disappeared.” The dictatorship, with the support of the United States, opened the doors to neoliberal policies, undermining the import substitution programs that had supported an industrial base in the 1960s. The external debt reached $35.7 billion by 1981, primarily as a result of borrowing by the private sector. In these pages in April 2002 Joseph Halevi explained that in an attempt to attract more capital from abroad the military dictatorship absorbed the external private debt into the public debt, placing the burden on the lives of the poor. This action was eagerly supported by the International Monetary Fund (IMF) and deepened the relationship between multinationals, financial capital, and local business elites. The socialization of the debt continued even after the end of the dictatorship. The debt burden became a permanent problem, and inflation plagued the country.

In 1991, in an anti-inflation scheme pimped by then all-powerful neoliberal economists, the government tied the peso to the dollar on a one-to-one basis. A spiral of increasing debt was set in motion, as the private sector continued to borrow money, and the government took responsibility for this accumulating debt. In order to maintain the stabilization of the currency the government accelerated the process of privatization, while also reducing its public investments and funding of social services. The economic growth at the beginning of the 1990s, built on speculation and the flood of external debt, contracted during the latter part of the decade. By the end of 2001, Argentina was $142 billion in debt. Peso-dollar equivalence ended, and the public’s supposed dollar bank accounts were frozen. On December 19, 2001, millions of people took to the streets, chanting, “Everyone must go.” The neoliberal regime collapsed. Short-lived successor regimes stopped payment on the debt, but could do little more than maintain the rudiments of public order while the economy contracted and a large portion of the population fell into unprecedented misery.

Two and a half years after its spectacular crash, Argentina seems to be entering a new political and economic phase. President Néstor Kirchner, elected in May 2003, has claimed that “the period of neoliberalism is over” and economic activity has recovered faster than generally anticipated. Payments are being made on a part of the debt held by favored creditors (above all the IMF), and international pressure to refinance and make payments on the defaulted debt has increased. Neoliberal economists remain totally discredited, but the Kirchner regime’s policy of partial payments on the debt, financed by revenues generated by severe restrictions on public spending, is applauded by a coterie of supposed “Keynesian” and “national” economists.

Questions remain: What happened to the external debt disaster? Is the enormous social crisis, for a moment extensively covered by the press and media, over? And even: Is Argentina, a neoliberal model in the 1990s of an “open, deregulated and privatized economy” now inaugurating a reverse miracle of a new type (perhaps to be termed Keynesian), a “national capitalism with a human face”?

The group Economistas de Izquierda (EDI)—Left Economists—born as an open assembly of critical economists in the midst of the big mobilizations of 2001–2002, has issued a “Program for a Popular Economic Recovery” a shortened English version is set out below. It aims to offer not only a detailed analysis of the new situation and a source of new proposals, but is intended to be part of the existing intensive debate in left parties and labor organizations. This debate is part of a process that seeks to defend and extend the areas gained by popular power.

The Editors

Though talk of Argentina’s “miraculous recovery” is now frequently heard, a basic feature of the existing situation is not openly acknowledged: the country’s dramatic social degradation has not been reversed, but has perhaps even deepened. This April 2004 document of the Economistas de Izquierda originates in response to the continued existence of an impoverishing economic model. This model must be examined and criticized. Our purpose is not only to analyze critically the actual situation and prospects, but also to present an alternative program based on an immediate recovery of employment and popular sector incomes.

We begin by examining three features that characterize the existing situation: the negotiation of the giant “defaulted” public debt, the fiscal surplus, and the upturn of the economic cycle. We then explain how a popular alternative program could be carried out.

The Pressures of a Privileged Creditor

The public external debt [what the Argentine government owes to the rest of the world’s public and private lenders—Eds.] is the principal causal factor in Argentina’s economic process, both because of its magnitude and the international disturbance provoked by the historic major default of a sovereign country. This situation has created an unprecedented level of foreign interference and continuous pressure from creditors. As these tensions will be present for a long time, it is essential to differentiate the usual controversies always present between creditors and debtors from the primary course of action promoted by the government in agreement with the International Monetary Fund. This strategy—a now standard requirement for highly indebted countries—is to offset the national liabilities with a substantial fiscal surplus [a surplus of tax revenues over government spending, achieved mainly by cutting social welfare spending—Eds.], one that generates massive popular misery. It has been decided that 3 percent of the Gross Domestic Product (GDP) will be targeted to cover commitments with privileged creditors: multinational institutions (International Monetary Fund, World Bank, Interamerican Development Bank) and national holders of public bonds issued after the “default” at the end of 2001. So far the other creditors remain excluded, and they are debating options such as debt-reduction and payments terms extension.

Economic Minister Roberto Lavagna, the primary Argentine economic spokesman of the government, as well as heterodox (that is, as opposed to the orthodox neoliberal “free market” economists now universally discredited) “Keynesian” or “nationalist” economists argue that with the first group terms must be fulfilled while with the second it is possible to delay payments. They never explain the reasons for this distinction, though sometimes they suggest that in this way a new recessionary crisis can be prevented. However, the fact is that the partial default of two and half years standing has not prevented the economic recovery and export boom, nor has it provoked significant retaliation overseas. The coexistence of recovery and foreign trade surpluses with the “default” indicates that the consequences of default have not been as drastic as previously supposed by economists. In any event, it must be noted that the crisis itself was not related to any rebellion by creditors, but rather to a series of funds transfers and governmental neoliberal “adjustment” measures that asphyxiated productive activity.

The “need to agree with the IMF” is a myth as arbitrary as the beliefs that were dominant during the 1990s. Then, it was pronounced that the fixed exchange rate of the local peso with the U.S. dollar was “immovable” and that “foreign banks in the local financial system guarantee solvency.” Now it is asserted that it is essential to reach agreement with the global financial institutions in order “to keep Argentina in the world.” Notwithstanding the certainty with which it is stated, the argument is false. In fact, the permanent and rigid link to these institutions brought the country to the financial brink, and then beyond into actual breakdown. Payments to the IMF have a more oppressive effect in reality than any supposed loss of the Argentine place in the international financial universe, as they are funded by popular misery.

Multilateral institutions have collected nearly us$10 billion net from Argentina since the beginning of the default. In fact, in the midst of a social disruption of world historical proportions, the global institutions have not refinanced existing commitments but have absorbed resources to reduce their financial exposure. Nonetheless the more money they collect, the more they want. Each quarter, fiscal figures are reviewed by an IMF team, and if it observes improvement in fiscal income, more money is claimed. The respite expected by Minister Lavagna after each agreement is a fiction. The IMF acts on behalf of other creditors and capitalist groups, and it is their voice that is demanding endless concessions.

Up to now the U.S. government has been the major beneficiary of this situation, as it would have primary responsibility for a major replenishment of IMF funds in the event Argentina defaults with that institution. That is the reason President Bush now praises President Kirchner. Previously, the U.S. treasury made much of U.S. bank balance sheet revisions to cover losses in order to demand new harsh conditions, while overlooking the fact that many of the same U.S. banks had made vast sums from the sale of Argentine bonds. But the honeymoon with the U.S. establishment never lasts. The U.S. treasury will praise or insult their middlemen as their immediate interests demand, and this is the reason the disrespectful treatment that prevailed in 2003 can reappear at any moment.

A new round of hostility would simply aim to make Argentina expand its payments. Any hope of preserving cordial relations with the multilateral institutions while negotiations are carried on with other creditors is baseless. The IMF collects payments while maintaining a permanent blackmail. In periods of recession it demands payments to encourage “investors to come back,” and in the periods of expansion it claims the immediate fulfillment of all it was previously promised and more. Always more has to be paid. If the country is on fire it is affirmed that payments are needed to quench the flames. If the economy is expanding, it is explained that it is essential to demonstrate that “contracts are respected.” In these conditions an economic expansion permits no respite, if not in fact becoming the occasion for a further nightmare of IMF extortion.

The U.S. government is the principal agent of Argentina’s creditors and defends their interests with whatever arguments are at hand. For example, even while pressuring Argentina for payments on its gigantic debt, the United States argues that Iraq’s obligations to Europe should be declared “odious” in order to make funds available for the contractors supplying torture “services” to that raped and invaded country. Due to this double standard in defining creditors’ behavior, it overlooks the fact that Argentina’s debt is every bit as odious as that of Iraq. Just as with Iraq, the ever-increasing burden of debt was born in a military dictatorship. It grew through credits the ruling elite granted to themselves and secured by exchange rate insurance that was permanently renewed. This debt was created to cover deficits that financed capital flight and subsidized the most powerful business interests. For example, between May 2002 and today the total debt has expanded from us$114 billion to us$178 billion. Instead of rejecting this swindle the government acts to legitimate it.

Neither Explicit nor Hidden Misery

A second group of privileged creditors includes the banks and national business groups that received bonds issued after the default. Argentina’s total debt is us$179 billion. Of this, us$95 billion is in default. Of debt being serviced, 26 percent (us$22 billion out of us$84 billion) is represented by bonds called BODENs. Principal holders are banks that had confiscated the savings of small investors during the crisis and big firms that benefited from the devaluation.

Those “heterodox” analysts who strive to demonstrate that the existing government “has changed the model” should check the continuity of public subsidies to those groups that benefited from the end of “convertibility” [of pesos into dollars at the fixed exchange rate of one for one—Eds.] The local establishment praises Minister Lavagna not only because of the business recovery, but also because their privileges have been preserved. This is the reason why chambers of commerce look with favor on the fiscal surplus; they are now well placed to collect a debt that will be paid by the entire population. Economists usually argue that the “new debt is different” and must be paid without delay. Why this is so is not explained; the hidden reason is the close and critical relationship between the government and local capitalists.

The payment suspension has so far then affected primarily the foreign bond holders. Forty-four percent of these creditors are small investors (particularly Italian, Japanese, Dutch, and German) who were induced by banks and investment funds to buy highly risky Argentine bonds. These institutions should bear their clients’ losses, not the Argentine state that has been strangled by these same usurers. The government rejects this logical reasoning because it is inadmissible, indeed unthinkable, to the IMF. That is the reason why it has instead proposed a 75 percent reduction in the face value of the debt, or the issue of new longer-term bonds, or lesser interest rates, or returns related to the expansion of growth. Any of those alternatives would impose tremendous sacrifices, as they would create an endless vista of fiscal surpluses.

So far, only one “purse” of three percent of the GDP—estimated to be over us$4.5 billion—is committed to pay all creditors, but it appears that this percentage is committed permanently. After the events of December 2001, officials don’t dare to declare openly that the debt will be paid with “the hunger of the population,” but silently they impose massive sacrifices. Intermediary banks that are negotiating a solution to the default will collect nearly us$200 million in commissions alone.

Public officials offer messages adapted to their audience. They lie when they affirm that the “adjustment is over.” They are sincere when they ask the public to pardon the crimes of the big creditors. The requirement should be the other way round: banks and hedge funds should ask the pardon of the great majority of the population.

Some supposedly progressive journalists and analysts applaud statements by President Kirchner against “speculators and neoliberalism.” But the rhetoric masks the fact that the promised payments mean that miserable wages and salaries will remain frozen although inflation is growing, even while the country is going through an exceptional period of growth and trade surpluses.

This scene presents a false dilemma. While 3 percent of GDP is a substantial amount sufficient to restore popular incomes and employment, and to cover basic social needs, the surplus is considered small and uncertain to those who appropriate it. The explicit misery advocated by the orthodox neoliberal economists and the hidden one promoted by the heterodox are two variants of antipopular policy. The real alternative is to use the entire fiscal surplus for the urgent needs of the population.

The 3 percent surplus is aimed at reimbursing a debt that has already been paid and was abusively refinanced. It is estimated, for example, that the interest charges paid on Argentina’s public debt between 1991 and 2001 (us$93.9 billion) was equal to the total amount of credits the United States extended to Europe through the Marshall Plan. This is the reason why, instead of asking for a new and better version of a perverse imperialist mechanism, we should simply demand that the looting stop. Argentina would not need more credits if it were to suspend payments on its extortionate liabilities. This should be the basic point of departure for an alternative program.

The results of the priority now placed on servicing the debt can be demonstrated simply: in the 2004 national budget total expenditures for education represent 29 percent of the surplus committed to cover debt payments, social development 20 percent, and health care only 12 percent. Meanwhile as inflation gathers force and incomes remain frozen, it is expected that this year real incomes in the public sector will fall at least 7 percent and over 2.7 percent in the case of pensions for old people.

Feeble Recovery and No Real Growth

The 8.4 percent GDP growth during 2003 surpassed official expectations, and the 5 to 6 percent expansion anticipated this year is also well over initial forecasts. The recovery is centered not only on an export boom based on the big devaluation of the Argentine currency (prior to December 2001 one U.S. dollar equaled one peso; currently one U.S. dollar equals 2.9 pesos), but also on current high international prices for commodities and exceptional international liquidity due to the global flood of U.S. dollars available at low interest rates—a consequence of the vast U.S. current account deficit and loose monetary policy. A limited degree of import substitution plus some recovery of consumption in the middle and high income sectors have also contributed to the recovery.

Nonetheless, it is not surprising that there has been a rebound after the most severe economic depression in Argentina’s history. The GDP recovery is not related to a supposed “change of the model,” but rather to the fluctuating nature of the capitalist accumulation process and to the magnitude of the previous downfall. If it is remembered that the country’s depression extended for four years and ended with a gigantic 10 percent fall in GDP in the year 2002 alone, the recovery would be understood as a cyclical reaction to the collapse and to the short-term predictable expansion of exports due to the devaluation combined with the coincidence of (for the moment) high prices for export commodities. Even if the current exceptional tempo of expansion was to be maintained through the year 2005, production would only then return to 1998 levels.

The dependence of Argentina’s economic cycle on favorable financial (influencing capital movements) and trade (export price and volume) conditions is growing every year. This development is similar in all Latin American countries. The region has recovered in the most recent period thanks to high prices for raw materials (soybeans, oil, and copper) and the ready availability of funds that have not been able to find profitable investment in developed countries, due to increasingly lower interest rates. As is widely recognized, this positive phase could turn negative in line with the highly volatile background of international financial markets and the eventual resolution of the unsustainable explosion of cheap dollars generated by the vast and increasing U.S. current account deficit.

In any case, the recovery has not reversed the deindustrialization and return to reliance on the export of primary products (dubbed “re-primarization”) that has characterized the last decades. On the contrary, the new “soybean dependence” is widening the fracture of the social structure in farming areas. Even during the current export euphoria small farmers have not been able to cancel their debts, and over two million hectares are menaced by mortgage foreclosure. The preeminence of a single crop of genetically modified soybeans destroys crop diversification and establishes transnational corporate control over the supply of seeds and over the process of production and sale. The result is the disappearance of 150,000 small producers between 1992 and 2001 and an ever-growing concentration of land ownership.

The dominant fact of the short-term recovery has been the overall restoration of capitalist class profits. Enormous benefits have been reaped not just by the initial winners of the devaluation and “pesification” [the paying back of debts that were promised to be paid back in dollars or dollar equivalents with devalued pesos—Eds.], but all big business groups today show high yields. High rates of profit have been restored in steel (Siderar, Acindar), oil (Respsol, Petrobrás), privatized public services (Telefónica, Telecom, Edenor, Central Puerto) and companies that serve the domestic market (Loma Negra, Grimoldi). These extraordinary yields have been achieved without risk or investment. They should be subject to a special tax aimed at reactivating popular consumption.

Neoliberal and Keynesian economists alike applaud the government because “it has prevented the worst outcome” (that is, hyperinflation). But the main beneficiaries of the government’s achievement are big capitalist groups. For most of the impoverished population, the worst outcome has happened—both before and after the devaluation. The crisis hit bottom, and the economy has now recovered with dazzling incomes for the enriched minority. But the afflictions of the majority have not been reversed and have even dramatically worsened for many.

Official statistics indicate that 60 percent of the population lives below the poverty line, 20 percent are unemployed, and 44 percent of those working have only informal, temporary, and very low- paying jobs. Government officials affirm that “the social agenda is pending,” but they don’t say when it will come about. In fact, they expect, without any foundation, a long-term recovery of employment and salaries. They are betting on continued support from what, for all their efforts, would be several poverty-stricken generations resigned to a miserable fate.

We find this resignation unacceptable. This is the reason why, instead of celebrating the capitalists’ benefits and hiding the people’s sufferings, we propose a program based on the immediate recovery of the purchasing power of workers, the unemployed, pensioners, and other popular sectors. This plan is based on three pillars: the funds now placed in service of the public debt, a progressive fiscal reform, and an extraordinary tax on recent exceptional gains attained by big business groups.

Universal Grant for Food and Education

The first measure for a popular economic plan is to put into practice without delay a universal plan to offer food and education to all the population. The monthly cost of a basic basket of food for a two- child family is officially estimated to be 327 pesos (us$113). A guarantee of this minimum right to the entire population has to be the first step for any project aiming to reverse the social disaster. This amount should be complemented with a 45 peso (us$15.50) allowance for each child to make it possible for families to pay the basic costs of education.

To establish this subsidy—which many organizations argue should be around 380 pesos—it is vital to make the “right to live” a reality. To eat every day is a fundamental right, and it cannot be made to depend on the contingency and uncertainty of employment. This undisputable basic right must be assured through a universal subsidy. The absence of this right in a country such as Argentina—the fifth leading food exporting country—is particularly reprehensible.

Implementation is urgent, because, since the big devaluation in December 2001, prices have risen 46.7 percent and family food product prices have gone up by 74.9 percent. It is estimated that 35 percent of the population is not getting enough food. Worse yet, experts are detecting a new generation of “socially caused small persons,” meaning people whose height has decreased compared with prior generations because of the cumulative effects of malnutrition.

The grant could make possible the immediate elimination of the indigent state of 25 percent of the population and should totally replace the existing plan, called the Head of the Family Plan (Plan Jefes y Jefas de Hogar), with a universal system that abolishes the arbitrariness of the existing system. Social insurance must not depend on the goodwill of public officials or the calculations of political bosses.

The government rejects the implementation of this primary right because it gives priority, in the disposition of its growing resources, to paying public debt. In addition, a universal system is not consistent with the system of patronage crucial to the traditional political parties. And finally, official opposition to a universal grant is supported by the employers, who fear that the subsidy could be a serious hurdle to keeping wages and salaries depressed. If all families could be assured of 380 pesos, no one would work for less.

To keep a big part of the population in absolute misery is a premeditated aim of business sectors opposed to any recovery in wages. Right-wing sectors are devoting great energy to a campaign against “unemployed vagrancy.” The government reflects this pressure and supports a proposed grant of 150 pesos per newly employed worker as a subsidy for those firms hiring unemployed persons. This initiative is supported with enthusiasm by the “free market” champions from the World Bank and is presented as an alternative to the universal subsidy.

Any progress toward the universal grant for food and education would be a great victory for the people. The costs of the plan are affordable. If to the actual 2,000,000 beneficiaries of the Head of the Family Plan are added those 900,000 who are registered but not receiving any benefits, 9.5 billion pesos (us$3.275 billion) would be needed yearly to guarantee its total implementation. This should be the real public priority as opposed to insatiable debt payments (12.5 billion pesos), the amount provided to cover losses suffered by the banking sector (20 billion pesos), or the vast subsidies provided openly and covertly to big local and foreign economic groups.

Four Ways to Create Genuine Work Alternatives

Although the government had intended to mask the cruel social drama by claiming that the beneficiaries of the Head of the Family Plan are not unemployed, official statistics place the unemployment rate at 21.3 percent. Even during last year’s record-breaking recovery, the situation improved just marginally. This is evidence of the feeble relation between employment and GDP growth that is now a worldwide feature of capitalism and that acutely affects Argentina.

A forecast prepared by International Labor Organization (ILO) experts indicates that at least 20 years with strong expansion would be needed to reverse the brutal reduction in employment suffered in the economic depression of 1999–2002. Recovery cycles do not restore employment in a dependent and peripheral economy to the same degree as in a core industrialized economy. The elasticity, i.e., the strength of the relationship, between employment and GDP has noticeably contracted in the last decades of deindustrialization and re-primarization of Argentina.

Neoliberal economists, and some well-paid comfortable “experts” at various Non-Governmental Organizations (NGOs), have argued that an expansion of employment in the “informal sector” counteracts the horrors that have everywhere followed imposition of free market neoliberalism. But the terrible prospect of chronic unemployment cannot be reversed with the simple multiplication of informal undertakings. Even less by an impossible “return to the fields,” as Argentina is one of the most urbanized societies in Latin America (over 90 percent live in urban centers). These informal undertakings are desperate (but dignified) survival schemes engaged in by millions of people hoping to offer some little comfort to their families. Even the best of these initiatives, organized as cooperatives, lack the necessary tools, credits, technology, and trade networks, and are strangled by the competition of big firms.

The tragedy of mass unemployment cannot be solved spontaneously. However, the creation of genuine employment alternatives could be achieved, in four different ways:

First, the eight-hour working day should be enforced at all employment levels. Ironically the lack of work suffered by “excluded” sectors is the other side of the coin to the overwork imposed on the “included” sectors. Working hours in Argentina (2,000 hours per year) surpass the average annual hours worked in Europe, Brazil, and Mexico. The strict implementation of the normal maximum eight hours of work could create immediately 900,000 jobs.

Second, a public works plan should be implemented, centered in construction, and financed by the three previously mentioned resources of the popular program (debt, fiscal reform, and emergency tax). The generally agreed estimate is that an expenditure of six billion pesos could mean the creation of 200,000 jobs.

Third, a mechanism should be implemented that requires the expansion of employment in those firms with high profitability. Over many years, and with different programs and administrations, it has been demonstrated that “incentives” to promote employment (such as tax breaks and soft credits) have wasted public funds without improving employment levels. For this reason a radically different course should be followed that links profits to the creation of new jobs. The creation of productive work that meets social needs is a challenge to be met by all of society; it cannot and must not depend exclusively on the self-interest of managers or capitalists. It is unacceptable that sackings are synonymous with efficiency. The aim of any economic process should be the expanded organization of work to meet unmet social needs, and not the destruction of jobs in the name of profit.

Finally, public support should be assured to workers’ self-administrated factories and small enterprises. Experts in the Ministry of Social Development estimate that under existing conditions just 20 percent of these projects could survive, as most lack basic resources necessary to face capitalist competition. Nonetheless, in a context of genuine employment expansion these enterprises could play a very positive role.

An Overall Improvement of Salaries

The inflation that followed devaluation provoked a general but unequal reduction of real incomes. Informal workers were hurt the most, as their average monthly income is 313 pesos (us$110), and the impact of major hikes in food prices has been terrible. This sector receives miserable wages and is not covered by social security, retirement, or health plans. They are not protected by the laws that govern working conditions and compensation. The world of informal employment that involved 25 percent of the workforce at the beginning of the 1990s is now the fate of 45 percent of all workers. Poverty affects, then, not only the “excluded” but also nearly half of the “included.”

To end this situation, it is necessary to force the legal registration of all workers. This step is vital to correct the brutal division of the labor market. Without the incorporation of these workers into the formal universe of social and legal protection, no official measure will have any real effect. The highly publicized announcements of marginal minimum wage increases, absent this step, will continue to reach no more than 20 percent of all workers.

The aim of the popular economic program should not be to legalize the existing misery, but to reverse it through a real increase in minimum salaries. The increase should mean an effective floor for all workers. This level cannot remain at the existing 350 pesos (us$121) established by the government. It must be near the 716 pesos (us$247) officially recognized as necessary to cover a basic total basket of goods and services—the lowest amount needed not to be classified as poor. It makes no sense to speak of a “minimum salary” at any lower level.

Another sector is composed of formal workers, whose average salaries are estimated nowadays to be 718 pesos (us$248). For them the post-devaluation deterioration was not as harsh as in the informal and excluded sectors; some compensation was granted to them. It is estimated that their wages have fallen around 20 percent since the end of 2001. Meanwhile, during the same period, the benefits of the vast gains in productivity that have been observed in most sectors have been completely absorbed by the employers. Wage costs for firms are at the lowest level since 1990.

Public employees comprise another sector. Their salaries have been kept strictly frozen at the demand of the IMF. The fiscal surplus program was established and maintained with this restrictive condition, unmodified in the face of the unexpected increases in public revenues.

A popular economic program must be centered in the recovery of purchasing power. An immediate 20 percent salary hike in the private sector and 30 percent in the public sector, together with the proposals set out above, would engender a recovery that could cover the whole population.

It is false to claim that “there is no money for everybody.” More than enough resources are available if debt payments cease (12.5 billion pesos), a progressive tax reform is introduced, and a tax is levied on recent extraordinary profits.

EDI has also elaborated proposals to cope with other basic aspects of Argentina’s economy, such as the situation of privatized firms, the collapse of the private financial sector, the situation in the farming and industrial sectors, the problems of the regional economies, and the need to introduce without delay an investment plan addressed to the decaying basic infrastructure. Our commitment is to study alternatives not only as to what must be done, but also how to do it.

A Contribution to the Popular Movements

The current political context in Argentina is very different from that of early 2002, when we put forward our first document (published in English by Monthly Review, April 2002). The country is neither living through an explosion such as that of the end of 2001 nor the gigantic collapse of all economic activity that marked 2002. Nonetheless, the misery and suffering of the majority of the population remains the same, and for this reason our proposals are timely and relevant.

The members of EDI have set out to analyze the distinct pattern of each phase of the process that has Argentina in its grip, observing cyclical behavior, the evolution of the productive system, and trade and financial trends.

We do not aim to compete with any foundation or consulting firm, to quantify variables, or to make short term forecasts. Our goal is different. We aim to contribute positively to the extensive movements fighting against neoliberalism and capitalism. We gather proposals, programs, and local publications that arise from the popular resistance, and develop their content. Our aim is to transform concepts in programs and local announcements into solid proposals. We seek to offer arguments against fashionable but regressive economic opinion, particularly those presented as “progressive” but justifying exploitation, unemployment, and the degradation of working people.

This ideological battle is much more important (and much more complex) now that the governments of Latin America hide their actions with anti-neoliberal rhetoric, though maintaining the same basic anti-popular political, social, and economic models. As economic free-market orthodoxy has lost leverage, heterodox ideas have taken their place continuing to justify the status quo as inevitable, natural, and without alternative. The members of EDI reject this naturalization of misery and openly oppose those economists who are applauding the existing course. We continue to promote debate of those measures that could make possible economic reconstruction in favor of the popular majority.

This is a favorable moment to advance this project because the dominant classes have partially restored political stability and economic growth but have not been able to deactivate social protest. A new movement to battle for basic social change based on labor, the unemployed (piqueteros), and the parties of the left is today a vital and real possibility. We present this document of the Economistas de Izquierda as a contribution to the elaboration of a common economic program.

Signed by Luis Becerra, José Castillo, Eduardo Crespo, Alfonso Florido, Guillermo Gigliani, Eduardo Lucita, Claudio Katz, Jorge Marchini, Andrés Méndez, and Pedro Resels

Buenos Aires, April 2004

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