Alternative Globalization Addressing Peoples and Earth

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the 1990s, Argentina had been the star pupil of the IMF, following its
advice to the letter. After a massive programme of privatization and
adjustment, by 1999 the country found that its debt had ballooned to
$146 billion. When the Argentine crisis deepened, the IMF pledged
more and more billions until, in late 2001, the country’s entire economic
system collapsed. Before the implementation of neoliberal policies,
Argentina was a society of 60% middle class. After the breakdown 60%
of the population is under the poverty line.
In Africa, the IMF’s star pupil was Zambia. In a region wracked by
drought and ravaged by the HIV/AIDS pandemic, Zambia needs all its
available financial resources to support its social and agricultural
infrastructure. Instead, it is expected to pay an average of US$221 million
a year in debt service from 2003 to 2005, which is two-thirds more than
it paid prior to receiving debt relief under the HIPC initiative.
The IMF alone is scheduled to extract $293 million in debt servicing
from 2003 to 2005, after providing debt relief through the HIPC
initiative, while Zambians are still paying for misguided policies imposed
by the WB and IMF throughout the 1990s. Instead of admitting its
responsibility and liability for Zambia’s debt crisis, the IMF remains
fixated on forcing the country to sell its remaining assets. When
confronted with the failure of their approach in Zambia, international
policy-makers hid behind allegations of local government corruption,
rather than examine the true impact of their own policies.
These experiences signify a systemic crisis of the entire global financial
system. No international financial institution, policy regulation or power
is able or willing to control the $1.9 trillion worth of currencies that are
traded every business day. Financial speculation dominates trade in goods
and services, diverting resources from long-term productive investments
and areas of greatest human need. Financial markets are also increasingly
unstable, with speculative bubbles and financial crises.
This risk is unevenly shared. The dominance of the US dollar in
international finance provides the credit that allows the US to create new
liquidity despite being the largest debtor on the planet and, among other
things, invest massively in the arms industry to wage geopolitical wars.
The ultimate helplessness of countries that abandon sovereignty over their
currencies, peg their currencies to the dollar or adopt the US dollar or
Euro is tragically illustrated by Argentina. The price is paid by the poor
through loss of jobs and savings, hikes in the price of food, burgeoning
poverty and, all too often, death.
In “good times”, rich countries create liquidity for themselves through the