Argentina and the IMF

[<dkostzer@xxxxxxxxxx>]

Dear PKTrs:
A very interesting article by Stiglitz on Argentina was published last
sunday in the Washington Post.
http://www.washingtonpost.com/wp-dyn/articles/A3893-2002May10.html
I think it is worth taking a look at it.
The world press highlights the role of corruption on the Argentinean
crisis, something that it is fully true, but nobodies says that corruption
is a bilateral crime. Look to whom were the beneficiaries of the
corruption and you will have the other side of the coin.
Stiglitz highlights the role of the privatization of the pension fund
schema on the fiscal deficit, that reduced state revenues and enlarged its
obligations, but at the same time there was a reduction by half of the
contributions by employers, what enlarged the deficit, not to account the
debt servicing, and all that under the pressure of the IMF.
The privatization of the pension funds implied an enormous transfer to the
private sector of 5 billion dollars per year. The reduction of the
contributions is of the same amount and benefits mainly the service
sector, not the tradables.
Since the beginning of 2001 the banks, mainly international ones, flew the
money taking advantage of the currency board. 83% of the reduction of
deposits was explained by the private banks, while 59% by the first 10
banks. The IMF encouraged the internationalization of the banking system
under the argument that the local branches will require funds from their
centrals in Spain, England or USA. None of that happened.
Didn´t know the IMF that silently banks were inducing capital flights? It
is almost funny to see that public banks saw a reduction of 4.9% in their
balance sheets of  the item ?other credits? and ?other liabilities? while
private banks presented reductions of 48.5%. Something was happening there
and the IMF and the Central Bank looked to the side.
To have the silent and ordered withdrawal of reserves from Argentina,
banks had the complicity of the IMF auditors and the Central bank. Is it a
mere coincidence that the IMF was pushing to abolish the laws that made
the heads of the central bank liable for their acts? Is it to adhere to
conspiracies theories to think that there are second intentions in the
abolishment of the white collar crime law or the reform of the bankruptcy
law are a requirement in order to achieve IMF support? One of the bankers
in jail is the partner of David Mulford . Their bank is accused of major
capital flights after the December crisis.
On top of that, there is the suggestion of major  orthodox adjustments in
the economy.
Dear PKTers, there should be an alternative for us Argentineans. Perhaps
many of you had thought on that. Will be nice to discuss ideas and
alternatives.

Daniel Kostzer