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The IMF knife goes straight past the fat to the jugular.

Related Gully Coverage

Argentina: Dirty Money, Big Banks and the Mafia State

Globalization: Viva La Fast Track!


Police officers guard Argentina's Congress from hungry, unemployed demonstrators as senators debate new economic measures. Buenos Aires, April 24, 2002. Daniel Luna

The Specter of Globalization

by Kelly Cogswell

APRIL 26, 2002. Turmoil in Argentina. Le Pen's extreme-right surge in France. Al Qaeda and the radical Muslim agenda. A specter is haunting the world: the specter of globalization.

The most recent manifestation of this was the World Bank and International Monetary Fund meetings last weekend in Washington, D.C., and the almost quaint anti-globalization demonstrators who gathered for the spring ritual of protesting against them.

Mobilization for Global Justice has boiled down the complexities of globalization into the rallying cry "De-Fund the Fund! Break the Bank! Dump the Debt!" In demonstrations, they demanded that the World Bank, which they think is too secretive, make its loan process more transparent, quit making loans contingent on structural readjustment programs (SAPs), and forgive the debts of many developing countries who use up huge percentages of their gross national products to meet payments. Many of the countries that have relied on World Bank and IMF loans now have higher levels of debt than when they first accepted assistance.

Argentina's Mess
If massive demonstrations from desperate protestors fail, and Argentina's President Eduardo Duhalde gets yet another bailout from the IMF, the country could become a case study of the IMF's pro-business, anti-normal person slant.

The aid is contingent upon an austerity package which would slash public sector jobs leaving hundreds of thousands more unemployed, and the country with even fewer services. With 40 percent of Argentineans already under the poverty line, and 20 percent unemployed, the IMF knife goes straight past the fat to the jugular.

Unfortunately, neither the IMF or the World Bank can be blamed for the existing crisis. For that you have to go to corrupt, regional politicians who have bled the country dry past even the point of acceptable Latin American graft. Anti-corruption crusader Elisa Carrió, a combative member of Congress, has exposed a ten-year,10-billion dollar web of political corruption, money laundering, and drug and arms sales.

Top officials of the country's banking and financial establishment, including Argentina's former Central Bank President, Pedro Pou, participated or covered up, though Pou blames U.S. multinational Citibank for withholding information. Former Argentinean President, Carlos Menem, a long-time friend of former U.S. President Bush, was indicted for arms trading, and placed under house arrest. Though he was cleared of those charges to the fury of the population, he may face others.

The ease with which stock can be bought and sold in deregulated economies, and money transferred from point A to B to Z, facilitated Citibank's global shenanigans and the Argentina mess. It also has a destabilizing effect on fragile economies, and is as likely to impede development as foster it.

Staying Liquid
Economist Radhika Balakrishnan, Professor at Marymount Manhattan College, and a member of the consulting group Strategic Analysis for Gender Equity, told The Gully that in the World Social Forum held annually in Porto Alegre, Brazil as an alternative to the World Economic Forum, "the emphasis was on private capital mobility, which is more important than the World Bank or IMF. Investors go when they want, come when they want. It's a real crisis. When there's a sudden pullout of investment, countries lose their ability to pay in hard currency, import goods etc. Investors are investing to get money back. If something else suddenly looks more promising, they want to be paid off and move on."

Even when international investors stay in developing countries long enough for projects to begin showing a profit, that profit usually leaves the country and ends up back in the United States or Europe. The effect can be seen closer to home in small communities in upstate New York, for instance, where privately owned drugstores were bought out or driven out of business by corporate chain stores like Rite Aid or CVS. Instead of recirculating the profits from tooth paste and prescriptions into bolstering the local economy by building homes, buying cars and groceries, the profits go to stockholders in Minnesota or California or Berlin.

So what's the answer? "Alternatives to Economic Globalization," the preliminary 2002 report of the anti-globalization think tank, The International Forum on Globalization, recommends a kind of idyllic, prelapsarian "localization," a "reversal of globalization policies that displace small farmers from their land and fisherfolk from their coastal ecosystems..." The IFG report also asserts that, "Whatever power can reside at the local level should reside there."

The consensus at Porto Alegre, however, was that going local was just not feasible. Balakrishnan said, "Really, only a few countries are large enough and rich enough to practice economic nationalism. No one is saying we don't want trade. The question is who controls it." Furthermore, a renewed emphasis on the local may not benefit everyone. "There's no guarantee that the local would be more just," said Balakrishnan. "Women, for instance, rarely benefit from the local."

France: All About Control
Control, or lack of it, is the central issue of globalization. Going local, despite its drawbacks, is the most popular solution. It's not just about controlling money or resources, but culture and politics. Nowhere is this more evident than in France, where the success this past weekend of presidential candidate Jean-Marie Le Pen and his anti-EU, anti-immigrant, "France for the French" platform shocked the country.

Nationally, France has benefited from globalization and its entry into the European Union. New jobs have been created, along with new wealth. France has been astoundingly successful in sheltering French agriculture from EU anti-protectionism policy, winning, for instance, limitations on the rights to the word champagne, allowing it only to describe sparkling wine from that French region. That kind of regulation benefits the local while uniquely situating it to exploit the world market.

Nevertheless, France is among the most rabidly anti-globalization, and neo-nationalistic countries in Europe. On the left, José Bové has become a hero for his attacks on the McDonaldization of France. He decries how U.S. multinational economic interests are intertwined with the kudzu of global Americanization and Bush-led political unilateralism. Most French politicians of the left and center-left have joined the bandwagon, many attending the Porto Alegre conference, rather than the World Economic Forum this year in New York.

On the right is Le Pen, so far right he intersects with the left, at least on globalization. His xenophobia knows no bounds. He hates the EU, and blames immigrants and other minorities for every social ill. He promises jobs, security, a crackdown on crime, and a wall, instead of a door, for immigration.

What the left, currently demonstrating against Le Pen's success, is only beginning to understand, is that his constituency can no longer be dismissed as a collection of aging, nostalgic, proto-fascists, racists, or anti-Semites. His National Front has made significant inroads in small towns and among the urban working class that used to vote Communist. He has even won support from some earlier immigrants and gypsies, as well as a few second or third generation French-Arabs fed up with "insecurity," the French establishment's euphemism for what people stuck in the soulless suburban housing projects call "Arab crime."

Immigrants Against Immigration
Immigrants against further immigration is a growing European phenomenon. The new, popular rightist party of white, gay Dutch politician, Pim Fortuyn, is poised to capture 24 seats of the Dutch parliament's 150 on a zero immigration platform. Fortuyn supporters include people like Philomena Bylhout, of Surinamese origin, who publicly praises Fortuyn for daring to say that most street crime in Rotterdam is committed by Moroccans and other immigrants.

One of Fortuyn's arguments is that Muslim immigrants that refuse to leave their own values behind are undermining his traditionally tolerant society. "In Holland," he says, "homosexuality is treated the same way as heterosexuality. In what Islamic country does that happen?" There's not an easy rebuttal. The European left hasn't even tried. Instead of creating a colorblind society, they've merely created a blind one.

In France, the emergence of a Zacarias Moussaoui has been dismissed so far as a fluke by establishment politicians, intellectuals, and the media. The current rash of anti-Semitic acts including the desecration of cemeteries, and the firebombing of synagogues by young Arab youths has been largely characterized as "boys will be boys" behavior. Even a spokesperson for the Union of Jewish Students in France said the "acts seem to be committed by youngsters of Arab origin who identify with the Palestinian cause, but who don't really know what they're doing." Maybe, maybe not.

Why shouldn't Le Pen or Fortuyn identify the problem as being related to immigration and globalization? Why shouldn't they suggest ending both? The left, which advocates the local when it comes to Roquefort in France or potatoes in Peru, demurs, with cause, when the subject is immigration. Morality aside, they know that this solution which appeals to absolutists, is not practical in an aging Europe that increasingly relies on an immigrant workforce.

Even after Le Pen's upset, there don't seem to be any fresh insights from the birthplace of semiotics. The establishment left cringes from mention of crime, or race, or culture, any of the signs of a changing France that is, in part, creating the anxiety that propels the far right forward.

Voters for Le Pen are not so different from those young immigrants and the children of immigrants that have discovered the language of violence in which to express their struggle for an identity in a forbidding country. The radical Muslim globalization of Zacarias Moussaoui and Richard Reid, the synagogue burning of young Arabs is the flip side of Le Pen's absolute and often brutal nationalism, echoed to a great extent in the larger country.

It is all the same thing, a desire for control, for certainty, for a place of one's own in a world shrunk by "globalization" and overwhelmed by the megalith of American culture and finance. Even individual Americans are dwarfed by it. In that world, it is tempting to settle the question of power, of control, by definitive acts, absolute pronouncements, and grand theories. Especially when solutions, often boringly incremental, and modest, even when global, are still on the drawing board.

For Argentina: Bush Friend Arrested

For Argentina: Dirty Money, Big Banks and the Mafia State

For Complete Coverage Americas

Related links:

For The Guardian's The true face of the National Front, the ugly history.

For Dutch Face Their Demons in Election as the Netherlands Swing to the Right.

For the Center for Popular Economics, teaching economic literacy.

For the International Forum on Globalization.

The Nation's cogent analysis of the changing anti-globalization movement From Protest to Politics.

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