>It's not the IMF or the World Bank that has raised Argentina's
>government debt/GDP ratio from 30% in 1994 to 54% today. It's not
>the IMF that continues to announce, daily, that Argentina must
>maintain its currency board and maintain its parity with the dollar,
>thus overvaluing its currency and strangling its own exports.
>
>I have yet to find anyone who can explain to me just how Argentina's
>situation would be improved if the IMF and the World Bank were to
>vanish tonight...
Well, just because some analysts & activists focus obsessively on the WB/IMF to the exclusion of everything else doesn't mean that Argentina isn't in a near-impossible international situation. Cavallo's currency arrangement was proposed as a solution to hyperinflation, and orthodox thinkers and investors loved it at first. But why does hyperinflation happen? Sometimes because of war or natural disaster, but also because of extreme demands being made on a national treasury - to maintain a quarter-decent level of social spending at the same time debts must be serviced. Cavallo imposed his currency board as a magic bullet, and there's a boom for a while as capital flows in and the investing class feels happy - but there's no way Argentina can survive in export markets with a currency fixed to the dollar, given that its productivity growth can't match that of the U.S. So the country goes into a four-year depression. But the currency can't be devalued, and the system can't be renounced, because the investing classes wouldn't like that, and capital would flee. There's no way out of this box, is there?
The only countries that have closed some of the income gap with the First World were those in Asia that violated all the canons of IMF/neoliberal orthodoxy - and they hit a wall in 1997, with the exception of China, which is hardly an example that Argentina (or Kenya) can follow. The IMF is only partly responsible for this, but if you treat it as a synecdoche rather than the sole actor, it's not a bad target.
Doug