(German) Argentina: Crisis of the lemon republic

Les Schaffer schaffer at SPAMoptonline.net
Wed Jan 3 12:19:27 MST 2001

[ forwarded from Johannes Schneider ]

Nestor Miguel Gorojovsky wrote:
> En relación a (German) Argentina: Crisis of the lemon republic,
> el 2 Jan 01, a las 21:38, Hinrich Kuhls dijo:
> >  From an article by Ingo Malcher (Buenos Aires) in this month's Sozialismus
> > magazine:
> >
> > Argentinien - die Krise der Zitronenrepublik
> The question is: does "Zitronenrepublik" have anything to do with "auspressen"?
> That is, does the "Lemon republic" have anything to do with "squeezing"?

Exactly Nestor, first of all it is alluding to 'banana republics'. But
squeeze someone like a lemon is the other word play. At the end of the
article Ingo Malcher is quoting De La Rua saying Argentia 'is the world
largest lemon exporter'. So the third level is alluding to the
de-industrialization of Argentina, making it a primarily agrarian
country again.

> Dear Hinrich:
> Could you send a sketchy translation? I think I caught the sense, but I am not
> sure. Some comments from someone who does _not_ know German follow.

I think you got most of the meaning. The following passage just
describes the economic results of dollarisation and argues for a
devaluation to have a positive effect on export on the long run. I dont
understand what is meant by the remark the greater share of Argentinian
exports are commodity-exports and a devaluation would effect positively
the composition of exports. Anyone more versed in economy who could
explain that?

> > Seine Zinshoheit hat es an die USA
> > abgegeben. Die  Euro-Schwäche macht dem überbewerteten Peso das Leben schwer. Da
> > die Exporte  zum Großteil Commodity-Exporte sind, würde sich eine Abwertung
> > nicht sofort positiv  auf den Außenhandel auswirken, könnte aber mittelfristig
> > die Zusammensetzung der Exporte verändern. Derzeit wird Argentinien Schritt für
> > Schritt desindustrialisiert.
> The Eins-zu-Eins-Dollarparität was established by Domingo Cavallo in order to
> easily collect the dollars that would pay for the foreign debt. At the same
> time, it became an exchange insurance for foreign investors. High interest
> rates and financial Babylonia made things all the easier for these sharks. Of
> course, the result was closure of industrial plants by the thousands and
> thousands. But who cared. In fact, this was part of the oligarchic program
> since 1976, and had to do both with political intention (destroy the militant
> working class, the working class itself if possible, even at the price of
> destroying domestic manufacture) and the necessities of accumulation at the
> global scale (Argentina was chosen as an outlet for idle petrodollars).

Basically the article argues about a continuity from Menem to De La Rua.
Nothing about any previous governments, nothing about the working class
and the unions. Just a passing remark on militant unemployed in Salta

> > Kleine Firmen mussten schließen, weil sie der
> > Konkurrenz von außerhalb nicht mehr  gewachsen waren und Multinationale Konzerne
> > wie Shell und General Motors verlagern  ihre Produktion ins benachbarte
> > Brasilien, weil dort die Kosten niedriger sind.

The argument here is: for new investors Argentina is simply to

> >
> > Es gibt kein Vor und kein Zurück.
> If you do not push for a revolution, of course.

Despite its name Sozialismus is no revolutionary magazine. They are left
Keynesyianists. Fair enough. Their 'social base' are the lower ranks of
the union bureaucarcy, politically they are aligned to the PDS. I dont
want to be unfair, but the whole article does not even mention the
recent general strike and resistance appears to be limited to some sort
of unemployed rioting in distant provinces.

> But there _is_ a Vor (even
> within capitalism, for the first few weeks before the Empire attempts to crush
> us):  immediate rejection of the debt, multiple exchange rates, nationalization
> of foreign trade, requisition of enemy property (the behaviour during the South
> Atlantic War may be useful here), and so on. Please note none of the above
> implies socialism _by such_, but simply elementary patriotism. Of course, there
> is no actual patriotism without socialism among us. This is the "problem". So
> be it

These measures of 'elementary patriotism' will be only possible when
mobilising massive popular support and extending it to a sort of
socialist upheval.
Given the international situation it would mean allying with Cuba,
Venezuela, the Colombian guerilla, the poular forces in Ecuador and
strirring up revolution elsewhere in Latin America, forcing the Empire
to some form of concession.

> > Wertet die Regierung den Peso ab, so
> > wird  befürchtet, würde eine Inflationsspirale einsetzen, da die Wirtschaft in
> > den Köpfen  dollarisiert ist.
> Not only in den Köpfen. There is a rift within the ruling classes, between
> those who are indebted (mostly in dollars) and their creditors. The first ones
> would step out of the crisis by keeping the credits at the parity of the moment
> when the contracts were signed, the second ones by indexing the contracts. So
> that this would imply class war. With the Empire backing the second bloc as a
> whole, then the prospects are gloomy.
> > Niemand rechnet in Argentinien in Peso, nur in
> > Dollar. Das geht solange gut, wie die starre Eins-zu-Eins-Parität feststeht.
> > Eine Abwertung würde  wahrscheinlich zu einer Preissteigerung in Höhe des
> > Wertverlustes führen. Hinzu  kommt, dass die argentinische Außenschuld zu 90% in
> > Dollar festgeschrieben ist,  aber um eine Neuverhandlung der Schuld wird
> > Argentinien ohnehin kaum herum  kommen. Der harte Wechselkurs wird bald auch
> > nicht mehr zu finanzieren sein. Auf  den Kapitalmärkten kann Argentinien schon
> > jetzt keine Schuldtitel mehr platzieren, was bleibt, sind nationale Banken und
> > Rentenkassen. Aber so überlebt De la Rúa  zumindest die fünf Jahre seiner
> > Amtszeit. [...]
> >
> > Full article at:
> > http://www.sozialismus.de/
> > http://www.sozialismus.de/01.01/malcher01-01.htm
> >
> Last paragraphs have been quite cryptical for me. Sorry.

Just a short transaltion: The author predicts a devaluation and as a
result inflation. The foreign debt will have to renogiated. Argentina
does not get any more (private) foreign loans anyway. Government can
only borrow internally (for this one Ingo Malcher gives   El Crónista
30.11.00 as a source) from the private pension schemes, but this gives
De La Rua a lifeline until the end of his term.


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