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Hugo Chavez Wants to Take On His Enemies By Playing Their Old Game
When President Franklin Delano Roosevelt ended direct US imperial involvement in Latin America with his Good Neighbor policies, the proponents of predatory capitalism needed another means for the continued exploitation of the region. Hence came the formation of the International Monetary Fund, the World Bank and the Inter-American Development Bank. The new scam was both simple and subtle as well as it was extremely effective.
These “international lending institutions” would first loan funds to developing nations with money contrived out of thin air. Next the developing countries were expected to pay back these loans with very real capital generated by their labor and exportation of natural resources. Don’t forget that all payments had to be made with interest. Over the years developing nations would be strongly encouraged to borrow more and more until it became impossible to recover from the ever-accruing debt.
...
Then something unexpected happened in late 2001 and it had very little to do with September 11th. Argentina defaulted on 9.8 billion dollars worth of IMF loans. The once new darling and shining star of the developing Third World suddenly went broke. What happened? Argentina simply borrowed more than it could possibly pay back. We know this sort of thing happens all the time with individual credit card users so it’s the same with entire national economies.
...
Then last week, Hugo Chavez dropped a bomb shell in which the reverberations can still be felt along the corridors of the various Third World lending institutions head-quartered in Washington D.C. Not only was the Bank of the South going to become a reality, but the nations of Bolivia, Ecuador, Argentina and Paraguay were already signed on to it. It didn’t stop there, either. There was the strong possibility of the South American giant, Brazil, fully joining as well. The real kicker of it all was that the commencement of loans issued by the Bank of the South could begin as early as 2008. Now this was indeed shocking news. The experts are now taking Chavez’s new plans very seriously.
So far the establishment banks like the IADB are reacting rather coolly to the situation. Rivals can be tolerated as long as they play ball. A wait and see attitude seems to be prevailing. After all, isn’t international wheeling and dealing a bit odd for a supposedly devout leftist such as Chavez? After Bush’s recent South of the Border Tour, the Venezuelan President must have been beside himself when learning of his arch nemesis’s new and very lucrative ethanol deal made with neighboring Brazil. Hugo Chavez may be winning the hearts and minds of the South American public but is being seriously out-flanked on the economic front.
It’s understandable that Latin America wants to at long last determine it’s own financial destiny. On the surface at least, Chavez’s Bank of the South makes perfect sense. Yet the world of international lending was born out of serious Mafia-style conniving. Serious questions must be raised. Where is the money going to come from? How are the payments going to be made? Which countries get the most say when determining and formulating lending strategies? Who exactly is going to benefit? Are the new Partner States of Venezuela, Argentina, Bolivia, Paraguay, Ecuador and Brazil really both that politically and economically aligned with one another? Hugo Chavez is no stranger to great risk taking but does he have any idea of where all this could lead? Only time will tell, but I think everyone is holding their collective breath on this one.
Read More
http://narconews.com/Issue45/article2613.html
...
Then something unexpected happened in late 2001 and it had very little to do with September 11th. Argentina defaulted on 9.8 billion dollars worth of IMF loans. The once new darling and shining star of the developing Third World suddenly went broke. What happened? Argentina simply borrowed more than it could possibly pay back. We know this sort of thing happens all the time with individual credit card users so it’s the same with entire national economies.
...
Then last week, Hugo Chavez dropped a bomb shell in which the reverberations can still be felt along the corridors of the various Third World lending institutions head-quartered in Washington D.C. Not only was the Bank of the South going to become a reality, but the nations of Bolivia, Ecuador, Argentina and Paraguay were already signed on to it. It didn’t stop there, either. There was the strong possibility of the South American giant, Brazil, fully joining as well. The real kicker of it all was that the commencement of loans issued by the Bank of the South could begin as early as 2008. Now this was indeed shocking news. The experts are now taking Chavez’s new plans very seriously.
So far the establishment banks like the IADB are reacting rather coolly to the situation. Rivals can be tolerated as long as they play ball. A wait and see attitude seems to be prevailing. After all, isn’t international wheeling and dealing a bit odd for a supposedly devout leftist such as Chavez? After Bush’s recent South of the Border Tour, the Venezuelan President must have been beside himself when learning of his arch nemesis’s new and very lucrative ethanol deal made with neighboring Brazil. Hugo Chavez may be winning the hearts and minds of the South American public but is being seriously out-flanked on the economic front.
It’s understandable that Latin America wants to at long last determine it’s own financial destiny. On the surface at least, Chavez’s Bank of the South makes perfect sense. Yet the world of international lending was born out of serious Mafia-style conniving. Serious questions must be raised. Where is the money going to come from? How are the payments going to be made? Which countries get the most say when determining and formulating lending strategies? Who exactly is going to benefit? Are the new Partner States of Venezuela, Argentina, Bolivia, Paraguay, Ecuador and Brazil really both that politically and economically aligned with one another? Hugo Chavez is no stranger to great risk taking but does he have any idea of where all this could lead? Only time will tell, but I think everyone is holding their collective breath on this one.
Read More
http://narconews.com/Issue45/article2613.html
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When you compare IMF and World Bank projects to UN-funded projects the IMF and World Bank have a better track record of success. When the UN pumps huge amounts of money into a project that doesn't relieve poverty, the left doesn't complain. When the IMF fails in it's objectives, it's a clear sign that capitalist policies don't work. The double standard is laughable.
The Bank Of The South will discover what we have discovered making loans to 3rd world countries -- a lot of the money just disappears. There is no accounting or accountability and corrupt politicians siphon off millions. In Russia, billionaires were created overnight from bad international loans to that nation. The Clinton Administration loaned 2 billion dollars to Haiti to try and get that country on it's feet -- it disappeared without helping a single Haitian.
Years of being burned like this is the reason why the IMF and World Bank have stricter rules and calls for reform to qualify for them. If Chavez thinks he can just loan money to some of these nations with no strings attached, he'll soon discover the same reality. This is, after all, a leader whose reckless food policies have now turned Venezeula into a nation that has to import food. His 21st Century socialism is starting to look a lot like the old Soviet style socialism.
The Bank Of The South will discover what we have discovered making loans to 3rd world countries -- a lot of the money just disappears. There is no accounting or accountability and corrupt politicians siphon off millions. In Russia, billionaires were created overnight from bad international loans to that nation. The Clinton Administration loaned 2 billion dollars to Haiti to try and get that country on it's feet -- it disappeared without helping a single Haitian.
Years of being burned like this is the reason why the IMF and World Bank have stricter rules and calls for reform to qualify for them. If Chavez thinks he can just loan money to some of these nations with no strings attached, he'll soon discover the same reality. This is, after all, a leader whose reckless food policies have now turned Venezeula into a nation that has to import food. His 21st Century socialism is starting to look a lot like the old Soviet style socialism.
"a leader whose reckless food policies have now turned Venezeula into a nation that has to import food"
You obviously don't have a clue on what you're talking about.
Not only does Venezeula import food, they export food as well.
Now if you want to talk about a leader whose reckless policies have turned a nation around, just look to George Bush. Under Bush the U.S. has gone from a net exporter of food to a net importer of food.
You obviously don't have a clue on what you're talking about.
Not only does Venezeula import food, they export food as well.
Now if you want to talk about a leader whose reckless policies have turned a nation around, just look to George Bush. Under Bush the U.S. has gone from a net exporter of food to a net importer of food.
What's laughable is you grasp of reality.
First of all, no one's claiming that the IMF and World Bank loans didn't do what they were intended to. They did *exactly* what they were intended to do. Namely, to keep former colonies in economic bondage. Name one nation which, after decades of IMF and World Bank enforced neoliberal policies, didn't end up with a completely dysfunctional economy. What, not even one? That's because you can't have a functional economy when all of your national assets are sold off at rock bottom prices to foreign corporations, you are locked into exploitative trade agreements, and any popular progressive movement is repressed in the guise of "protecting democracy" (democracy for the rich vs. democracy for all). You are correct in stating that UN loans did not get to any of the people of the nations who received them, however neither did any of the IMF and World Bank's loans. And for the price troughs nations paid in economic sovereignty, it wouldn't be worth it even if they had. At least the Bank of the South will be distributing loans to functional democracies beholden to their people.
Second of all, Chavez's policies didn't turn Venezuela into a food importer. The a problem is two fold, and started decades ago. The first problem is the absurd land inequality that developed as Venezuela's economic elite consolidated their power. They used the land for cash crops like coffee which they'd sell to the US. Eventually this elite owned more land then they could even use, and they just traded land with each other as a real estate asset, not even using it to produce anything. This problem was exacerbated by what is known as "Dutch Disease". That is when people flood into urban areas where all of the oil money is concentrated. Once this happened in Venezuela, people abandoned what little land they had left to crowed into shanty towns where they hoped to find a way to tap into the oil money trickling down through the private economy in the cities. With no one farming, Venezuela (looooong before Chavez) became totally dependent on imports. If you had any idea what you were talking about, you would understand that Chavez is helping to alleviate this decades old food crisis by nationalizing PDVSA and distributing it's profits evenly across the nation, thus curing Dutch Disease, while also giving training, loans, and other support, to thousands of families farming previously idle land.
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