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...The anti-Argentina
Argentina accepted the World Bank's four-step economic medicine with fatal glee. Not that it had much choice. I have obtained the secret June 2001 'Country Assistance Strategy' progress report of the World Bank, ordering Argentina to pull out of its economic depression by increasing 'labour force flexibility'. This meant cutting works programmes, smashing union rules and slicing real wages. Contrast that with Chávez's first act after defeating the coup: announcing a 20-per- cent increase in the minimum wage. Chávez's protection of the economy by increasing the purchasing power of the lower-paid workers, rather than cutting wages, is anathema to the globalizers.
His Venezuela is the anti-Argentina, taking a path exactly opposite to the guidance given, and ultimately imposed, on Argentina by the World Bank and IMF.
For example, in the June 2001 document, World Bank President James Wolfensohn expressed particular pride that Argentina's Government had made 'a $3 billion cut in primary expenditures'. Slicing government spending in the midst of a recession is economic suicide, killing demand when it's most needed. Who could have pushed the banks to demand such a berserk programme? The answer is hinted at in the document.
That $3 billion cut will 'accommodat the increase in interest obligations' to pay off those foreign banks - Citibank, Chase Manhattan Bank, Bank of America, Credit Suisse, and Lloyds Bank - who, having bled the nation of capital, lent Argentina back its own money at rates that can only be called usury. Foreign banks working with the IMF had demanded that Argentina pay a whopping 16-per-cent risk premium above US Treasury lending rates.Chávez would take Venezuela in the opposite direction. His plan is to pull out of a downturn threatened by a corporate embargo of investment in his nation by taxing the oil companies and spending - the 'Bricks and Milk' solution, old-style Keynesianism.
And while Chávez moved to renationalize oil and rejects the sale of water systems, Argentina sold off everything including the kitchen-sink tap. The World Bank beams: 'Almost all major utilities have been privatized.' That includes the sale of water systems to Enron of Texas and Vivendi of Paris, companies which immediately fired workers en masse, let the pipe systems fall apart and raised prices as much as 400 per cent. Wolfensohn, for some reason, is surprised to note that after these privatizations, the poor lack access to clean water.
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