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Montevideo, September 26th 2018 - 10:55 UTC

Peso storm: Argentina requests a US$ 30bn precautionary credit from IMF

Wednesday, May 9th 2018 - 07:32 UTC
Full article 37 comments

Argentina asked the International Monetary Fund for financing to help stem a run from the Peso to the US dollar that is sparking a surge in interest rates and threatening to derail the country's economic recovery. The sum requested is estimated between 25 and 30bn dollars, 500% Argentina's IMF quota and could be disbursed in two forms, a flexible credit line or a precautionary credit line. Read full article

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  • Marti Llazo

    Perhaps the announcement might have run as ”This will allow us to prepare a pretty face for the country and maybe temporarily postpone a monumental crisis like the ones we have inevitably created for ourselves before in our history,”

    May 09th, 2018 - 04:16 pm - Link - Report abuse +4
  • Enrique Massot

    Well, Mauricio Macri and his Joyful Revolution did it:

    In just 30 months, he managed to put Argentina on its knees, begging for a lifeline from none other than the IMF.

    As the Guardian put it, “Cornered by lacklustre growth, rising retail prices, diminishing popularity and a smaller-than-expected soy harvest, Macri’s economic plan has been heavily dependent on foreign financing, which had dried up in recent months, prompting Tuesday’s appeal to the IMF for a line of credit.”

    Of course, Argentines of a certain age will remember what happened in previous occasions the country had to ask the IMF for 'help.' They remember the structural adjustment policies that the IMF impose as a condition for lending money: free-market policies such as privatisation, fiscal austerity, free trade and deregulation.

    That is why former president Nestor Kirchner paid back the debt with the IMF in 2007: to free the country from the IMF's decision power over domestic economic policy.

    The problem now is that, save perhaps for fiscal austerity, Argentina has already been going through such painful recipes under Macri's watch--the very same measures that are at the origin of the present situation.

    Continued inflation and now deep recession are in the horizon because of the actions of an arrogant government that does not listen to its own population.

    https://www.theguardian.com/world/2018/may/08/argentina-seeks-imf-loan-to-rescue-peso-from-downward-slide

    May 09th, 2018 - 05:47 pm - Link - Report abuse -1
  • Zaphod Beeblebrox

    Remind me how many times CFK went to the IMF.

    The 3 times she did that it was described as “a necessary evil”.

    Why is it “Argentina on its knees” when Macri does it?

    Double standards maybe?

    May 09th, 2018 - 06:14 pm - Link - Report abuse 0
  • golfcronie

    Selective memory is what it is called

    May 09th, 2018 - 09:48 pm - Link - Report abuse 0
  • Enrique Massot

    ZB

    “CFK went to the IMF...The 3 times she did that it was described as 'a necessary evil.'”

    Well...that would be news...to me at least!

    I thought Nestor Kirchner had paid back the entire debt to the IMF in 2006 and that no other president since--I am talking about CFK, of course--asked for a loan from IMF.

    However, it would be interesting to the readers if you would provide some factual support for your statements above.

    May 10th, 2018 - 12:28 am - Link - Report abuse 0
  • Think

    ***“CFK went to the IMF...The 3 times she did that it was described as 'a necessary evil.'”**

    Well..., that would be news..., for me too...!!!

    It would indeed be interesting to the readers if the Anglo Turnips above (Turnip Zaphod Beeblebrox and Turnip Golfcronie) would provide some factual support for their statements...

    May 10th, 2018 - 06:17 am - Link - Report abuse -2
  • Jack Bauer

    @EM
    “In just 30 months, he managed to put Argentina on its knees, begging for a lifeline from none other than the IMF”...

    Well, IMF or any other, what would the alternative be ?
    Reekie, the word is with you .....

    May 10th, 2018 - 05:08 pm - Link - Report abuse +2
  • Enrique Massot

    @JB

    “IMF or any other, what would the alternative be ?”

    Asking questions is a good step forward, Jack. Congratulations, you've already being given one green point for your question!

    Going to beg the IMF is just the consequence of the unsustainable economic policies implemented by Macri & Co.

    No country can go forward by maxing up its credit card in record time and then going to the loan sharks.

    Foreign investment may only work if growth has solid local basis--an unknown concept to our elites who only swear for Paris or NYC.

    By the way, I am still waiting for Zaphod to come up with the “three occasions CFK went to the IMF.”

    Be interesting.

    May 10th, 2018 - 06:59 pm - Link - Report abuse -2
  • Think

    The Jack Bauer Turnip gets also a + vote from me for asking nicely....
    Biiiiig improvement from shooting peoples knee caps all the time..., I Think

    May 10th, 2018 - 07:13 pm - Link - Report abuse -2
  • Zaphod Beeblebrox

    I stand corrected. I was given incorrect information. What actually happened was CFK asked the IMF for money but they refused because they didn't believe her invented statistics.

    May 10th, 2018 - 08:16 pm - Link - Report abuse +2
  • Tarquin Fin

    I don't think she ever did. Neither did Nestor. Absolutely no rapport there.

    https://www.telegraph.co.uk/finance/financialcrisis/9749721/Argentina-faces-expulsion-from-IMF-and-economic-pariah-status.html

    May 10th, 2018 - 08:21 pm - Link - Report abuse +2
  • Think

    ***“What actually happened was CFK asked the IMF for money but they refused because they didn't believe her invented statistics.”***... says the Anglo Turnip now...

    It would be interesting to the readers if the Anglo Turnip above would provide some factual support for his newly invented statements..., I say...

    May 10th, 2018 - 08:27 pm - Link - Report abuse -4
  • Enrique Massot

    @TF

    You are right. The only actions were IMF's threats of expulsion regarding the INDEC 'faux numbers.'

    ZB:

    I would advise, in case of faux pas, to unreservedly retract. You did it half way and it looks even worse. Cristina, as Tarquin stated, did not ask for a dime from the IMF.

    May 11th, 2018 - 12:42 am - Link - Report abuse -3
  • javiernyc

    Apologies, focused on work matters, missing postings over the past week or so. I have been following the monetary fund negotiations, and reactions by congressional and executive policy makers, so believe this move was largely preventative, hoping to stave off further market pressures, motivated by statements by irresponsible opposition members.

    LOTS of blame to go around for this, despite the fact the monetary fund's credit facility is actually a good idea. The political implications of the announcement are absolutely horrible. Everyone on this site knows well how Argentines detest the International Monetary Fund. The announcement smacks of circa late-1980's chaos, just as Menem entered office. Unfortunately, these perceived associations are still very influential and do in fact risk the administration's policy agency.

    The Macri administration is also to blame for not having moved quickly enough over the prior 30 months to aggressively target fiscal spending. They miscalculated how quickly financial markets (really the currency and USD denominated debt markets) lost confidence with the administration's slow progress. They want much deeper cuts to public spending and structural reforms, right now, not 12, 18, or 24 months from now. These are necessary measures, but the administration had hoped to have more time to implement them. Unfortunately, they took the wrong gamble.

    As ALWAYS, the issue is POLITICAL, everyone knows what measures need to be taken, what reforms to ratify. The problem is having legislators to actually VOTE FOR THESE and for federal and state authorities to IMPLEMENT these reforms. In contrast to disastrous outcomes from prior crises (particularly the late 80's and '02), I believe this administration will hold on, will end up implementing its reforms, and will win the 2019 elections.

    May 11th, 2018 - 05:23 pm - Link - Report abuse +2
  • Tarquin Fin

    Javier,

    I also believe that his administration will pull it off, but I seriously doubt they will be left in a good stand towards the 2019 run.

    It isn't just the IMF rejection of the general public what will influence this. A 30 pesos per dollar, plus pensions and wage freezes will break havoc in the streets.

    I'd rather have that happen sooner that later even if it affects my cash flow, but Good Lord, most people are not going to see it that way.

    May 11th, 2018 - 05:35 pm - Link - Report abuse +2
  • Jack Bauer

    @EM

    “Asking questions is a good step forward, Jack. Congratulations, you've already being given one green point for your question!”

    Reekie, thanks for the niceties, but you did not answer my question....I asked ”IMF or any other, what would the alternative be ?”....and you gave me a bunch of reasons why NOT to resort to the IMF, which I am also familiar with...

    So, what is the alternative to the IMF ? (pls note I'm not implying it's the best alternative, and I am asking nicely).

    May 11th, 2018 - 06:59 pm - Link - Report abuse +1
  • Enrique Massot

    @JB

    Ah, Jack. You probably know what should be done to put the Argentina on its feet again.

    Ditch the IMF. Nothing good ever came out of this organization. Seek foreign credit--only for productive investments. Re-establish the taxes on agri-food exports and mining products, taxes on luxury cars and personal goods, let wages and retiree benefits go up with inflation so that domestic consumption keeps business alive. Restrict imports of nationally-produced goods to stop valuable dollars going out. Strictly regulate capital flows to stem the bleed through speculation and capital flight. Let go the legions of friends and family members hired by Macri and Co. to public positions.

    Of course, this cannot be achieved without a Great National Agreement, which can be done by president Macri by calling political parties, social organizations, unions, representatives of the PYMES and the regional economies, etc. for an in-depth discussion on how to go forward. He met today with the large corporations. That's a first step but no nearly enough.

    In a nutshell, it's a 180-degree turn that is needed. Macri still can do it. If he continues the path of the last 30 months, the IMF 'standby loan' is going to be a drop in the ocean, as demonstrated by the continued fall of the peso EVEN after the IMF negotiations announcement.

    @Javier

    I understand you reject Macri's gradualism and favour instead a hard-core structural adjustment to solve the fiscal deficit. Unfortunately, that would lead Argentina to the same end, only much quicker and accompanied by a lot of social protest, state repression and bloodshed. As you probably know, all sort of paces were successively used by the civic-military dictatorship of the 1970s, by Carlos Menem in the 1990s, and by Fernando de la Rua prior to the disaster of 2001.

    As the Argentines say these days, “we've already seen this movie and we know how it ends.”

    May 12th, 2018 - 03:04 am - Link - Report abuse 0
  • Jack Bauer

    @EM
    I might be wrong, but it seems to me that while the IMF may impose draconian measures on whatever country it loans money to, it is also the cheapest (money)....going to foreign banks still implies the obligation to pay it back, in the contracted time frame...so what's the REAL difference ? the one people don't like ? naturally, the draconian measures...but which after all, are usually imperative to adhere to if the country is going to have even the slightest chance of repaying the loan - to the IMF, OR private banks....or do you believe that not repaying a loan to a foreign/ private bank would not also get Argentina's name on a black list ?

    Your first paragraph sums up good alternatives in the effort to prevent such loans from becoming necessary ; Huge loans - from any source - is the option a country has to resort to in order to give it time to breath while working to avoid an even worse situation....

    Did CFK impose such measures (as you suggest Macri should) ? were the problems brewing before Macri took over or did the situation only become so dire AFTER Macri ? Wasn't CFK notorious for creating (unnecessary) political jobs for followers, at great expense to the country ? Just asking....

    May 13th, 2018 - 12:05 am - Link - Report abuse +2
  • DemonTree

    @JB
    There's not so many options now, but there were a lot more back in 2016 when Macri had just become President. By all accounts Argentina was not in great shape when he took over, but it was not so bad he was immediately forced to go begging to the IMF.

    IMO people's objection to the IMF is not exactly the draconian measures themselves - drastic measures may be necessary, but going to the IMF takes the choice of what to do and on what timescale out of the hands of the government, and gives control to an external organisation the voters have no control over.

    You can't assume the IMF knows what is best for the country, either. They supported the policies of Carlos Menem in Argentina, including pegging the peso to the US$, which tamed inflation but eventually led to a massive increase in national debt and the huge crisis and default of 2001.

    As long as you owe the IMF money, you can be forced to apply policies that may be actively harmful to your country. That seems like a good enough reason to avoid it if possible.

    Also yes, CFK was notorious for creating jobs for her followers, and Macri fired quite a few when he first took over. But they were soon replaced by others appointed by Macri's underlings, so the number of government employees had actually risen by the end of his first year on power.

    I think what EM said in another thread is very true, that rightest governments in Latin America have a very mixed record. The Junta in Argentina screwed up the economy so badly they decided to start a war as a distraction, I already mentioned Menem, and now Macri; turning to the IMF is not a sign of successful economic management.

    Before the PT took over in Brazil there were periods of growth and periods of recession, and poverty remained stubbornly high. The PT had a bigger recession but also much higher growth that preceded it, and the best I can discover GDP is still over 3 times higher than when Lula took over in 2003, which is much better than some parties managed.

    May 13th, 2018 - 11:13 am - Link - Report abuse 0
  • Jack Bauer

    @DT
    Agree, when Macri took over, his options were open, but he did not inherit a favourable situation. (Just an observation: when FHC was Finance Minister in ‘94, his Plano Real reduced inflation from 2477% in 1993 - mol 45%/month - to 21% in ’95 and 9.5% in ‘96 month). The IMF draconian measures include the ‘right’ to interfere, reducing government’s independence in economic policy-making. The question is, was going to the IMF necessary /inevitable ?

    In Brazil during the 8 years from 1994 (Plano Real) up to 2002 (pre-PT) the GDP increased from US$ 1.03 to US$ 1.25 trillion, or 21%. Over the next 8 years (2003/10) it increased from 1.27 to 1.72 trillion, 35%, due to mainly the global trade boom (2004/5), Brazil’s increase in commodity exports (no thanks to government), and the benefit of a stable currency . In 2009 - as a result of the US crisis, which Lula claimed would not affect Brazil - GDP fell 0.0013% . In 2011 (Dilma’s 1st year) it increased 4%; in 2012, 1.7% ; 2013, 3.3% ; 2014, 0.5% ; 2015, -3.77% ; 2016, -3.8 % (to US$ 1.75 trillion).
    As you can see, Dilma's last two years as president were disastrous for the economy. In 2016, GDP fell to the same level as in 2010/11. In 2017, GDP increased to US$ 2.05 trillion; (GDP in adjusted USD, according to average yearly exchange rates).

    In Dec 2017, 1) according to the IBGE, greatest poverty verified was in the NE region (affecting 43.5% of the population), where the BF is concentrated;
    2) roughly 50 million Brazilians (24% of the population), according to World Bank standards, are poor ;
    3) in 2016, the number of Brazilians living in extreme poverty were 25 million, representing an increase of 53% over 2014 numbers.
    Reasons why I maintain that any progress made during the PT years was short-lived, having been based on unsustainable policies. No matter how well Brazil “seemed” to be doing, populism and wasteful, uncontrolled spending were bound to take their toll.

    May 13th, 2018 - 07:22 pm - Link - Report abuse 0
  • DemonTree

    @JB
    Where are you getting your GDP figures from? I was looking at the world bank page here: https://data.worldbank.org/country/brazil which has GDP in current US$. I guess the difference must be due to using current dollars vs the historic exchange rates? I don't know which makes more sense, but it makes the early figures look quite different, with a lower GDP in 2002 than in 1994 (it rose then fell again), and a dramatic rise from 2003 until 2011 (there was a blip in 2009 like you mentioned). The recent ones are more similar, which makes sense. By the way, Lula may have been wrong that Brazil would not be affected by the US crisis, but UK GDP fell by 4.3% in the same year.

    As for the poverty, wouldn't you expect it to rise when the country is in recession? It's likely it will fall again when the economy picks up more and unemployment falls; at any rate, we can hope it will.

    RE the Plano Real; when I read up on it, it said the previous and then current government had already fixed the structural issues causing inflation, and it was basically only persisting because people expected it to. If there had been real policies driving inflation (for example the government printing money to cover the deficit), then the plan could not have succeeded. I'm not sure what is causing inflation in Argentina, but the increase in utility costs doesn't help, and the fall in the peso now is bound to make it much worse.

    Anyway, I don't know what other options Macri has besides the IMF. I guess he could raise taxes, that's always popular. Would you want Brazil to borrow from them?

    May 13th, 2018 - 09:53 pm - Link - Report abuse 0
  • Enrique Massot

    @DT

    Your above analysis is painfully correct.

    I would add asking whether it's good or not to go to the IMF is secondary; why a government would put the country in such need is a more relevant question

    “As long as you owe the IMF money, you can be forced to apply policies that may be actively harmful to your country.”

    Absolutely. The IMF consistently demands the application of similar measures that are consistently recessive, making a bad situation worse.

    The IMF's logic is just to ensure its money is paid back, so they squeeze the debtor through austerity measures.

    However, as Nestor Kirchner famously said, “the dead can't pay.”

    The conundrum here is, the Macri government has already applied some of the IMF typical measures: It has squeezed workers' wages, reduced retirees' benefits updates, deregulated capital flows and devalued the peso. The difference is, the IMF will ask Macri to increase the pace and extent of those measures.

    However, who in their right mind would expect a different result going forward when similar measures were applied in the last 2.5 years?

    It appears now that Wall Street investors consider Macri needs US$ 50 to 60 billion to stabilize the situation and keep foreign investors, while the IMF would lend only US$ 20 to 30 billion. This has Macri's team working hard to get loans from other credit organizations to complete the required total.

    Even if the money were found, it's only a matter of time for the money to scurry away the same way the previous US$ 100 billion did, down the gutter of financial speculation, interest payments, capital flight and other delicacies.

    There was enough criticism of CFK, and part of it was warranted--however, the way things go may soon make citizens yearn for her time in office.

    May 13th, 2018 - 10:09 pm - Link - Report abuse -2
  • Zaphod Beeblebrox

    Reekie,

    “I would advise, in case of faux pas, to unreservedly retract.”

    1. I retracted my error.
    2. Why don't you take your own advice?

    May 14th, 2018 - 04:37 pm - Link - Report abuse +2
  • DemonTree

    @EM
    “The IMF consistently demands the application of similar measures that are consistently recessive, making a bad situation worse.”

    We've seen how well those kind of measures work in the case of Greece. They were spending borrowed money and their economy needed serious reform, but the cuts were so severe they much prolonged the crisis and made the debt even harder to pay off by shrinking GDP.

    Do you know exactly what measures the IMF are asking for yet?

    @ZB
    You retracted your error and immediately made another one, or did you find some evidence that CFK ever asked the IMF for money?

    May 14th, 2018 - 05:24 pm - Link - Report abuse 0
  • Enrique Massot

    @DT

    There is no word yet on what measures the IMF will be asking Argentina if a loan is approved.

    This comes to show the lack of foresight of those at the wheel within the governing team.

    In similar situations, governments first negotiate the terms of a loan with the IMF and make public the agreement once it's concluded. These amateurs were so run over by the events, they decided to go to the IMF just days after saying they were going to stop borrowing abroad (after being told the will to lend to Argentina had come to an end).

    In regards to Zaphod, I almost feel bad for him and the bunch who have been writing posts berating opponents to the Macri government. Their world has suddenly turned upside down and now they do not know what to post. I am happy to see, on the other hand, that they are not trolls. Scanning the comments sections of Clarin or La Nacion there is still a high number of trolls who attempt to confuse the issues, divert from the main topic, or blame CFK for everything happening today.

    May 14th, 2018 - 07:25 pm - Link - Report abuse -3
  • Jack Bauer

    @DT
    GDP figures are from the IBGE (official govt agency), where both R$ & USD figures appear - the conversion rates are historical ones.
    Soon after the Plano Real (July 94) the exchange rate stayed around 1:1, so the GDP, in US$ would seem higher – in 2002, with the R$ already worth considerably less, the GDP in US$ would seem smaller.
    Only mentioned Lula’s irresponsible declaration (2008 crisis) to point out he did nothing to protect Brazil from its effects.
    Sure poverty rises in a recession, and that’s what I’m getting at - the 2013/14 recession wiped out most of the alleged improvements which, if had been sustainable, would've resisted better. It’s a known fact that poverty is reduced in a thriving economy, but the PT carried on with the BF as if that alone, would suffice to get people out of poverty. Of course it wasn’t, reason why many are now worse off than before.

    The Plano Real was implemented by FHC, while Finance Minister for Itamar Franco (1992/94). I agree that pessimistic speculation stimulates inflation (or the increase in cost-of-living, which although usually going hand-in-hand with it, does not necessarily have the same cause), but the Plano Real was clever, in that it abandoned all previous policies that had gone wrong (freezing prices, reducing money offer, increasing interest rates), and imposed a minimum of sacrifice while the transition occurred slowly over several months (building up the R$ value until it reached the desired value against the USD. The urge to raise prices speculatively was greatly reduced.

    Re EMs remark abt going or not to the IMF, goes without saying that it's obviously better to not get into that situation in the first place. And also, if the expected results of the loans don’t materialize, the country is going to go downhill fast and won’t be able to pay. The IMF might be their last resort, as private banks usually don’t like to lend to people / countries in ‘desperate need’ of money.

    May 14th, 2018 - 08:01 pm - Link - Report abuse +2
  • DemonTree

    @JB
    I guess that explains most of the difference in figures. There must have been recessions before, though. And there were strong periods of growth before, but poverty was still very high. Apparently a thriving economy can't do the job by itself, although it's surely one ingredient.

    The Plano Real was clever, avoiding the problems caused by freezing prices, or increasing salaries/minimum wages below inflation. Wikipedia says the Real was loosely pegged to the dollar until 1999 when there was a currency crisis, which explains why the value fell a lot after that. What was it like to live with such high inflation before 1994? It must have made financial planning and even ordinary shopping a nightmare.

    As for the IMF, I think getting in that situation in the first place is at least as much EM's complaint as the action of borrowing from them.

    I'm disappointed in Macri. He didn't inherit an easy job but I don't think he handled it well, we saw him make mistakes right at the beginning and he doesn't seem to have learned from them. Also, it is sadly true that banks are only willing to lend money to the people and countries who need it the least. I don't know what Argentina is going to do though, they still have a big deficit so if they can't borrow any more they'll need to make drastic cuts, IMF or no.

    May 14th, 2018 - 09:44 pm - Link - Report abuse 0
  • Jack Bauer

    @DT
    Pre-94, you got used to high inflation, by buying most of your month's supplies asa you got your salary and investing the rest in inflation-pegged (or better) investments. On the other side, it was also common for companies to increase salaries every month, based on (past) inflation. Only one company I worked for went further, raising salaries based on projected inflation, and making the necessary adjustments later, as the real inflation rates became known.


    Cont. of discussion under “Towering Inferno…”

    It (communism v the military) was not a choice available to the average citizen ; Only in retrospect can you compare what did happen, to what you believe might have happened ; given the choice now, in view of prior experience, would still go with the military, because as far as I was concerned, nothing changed (for worse).
    True, it’s all about perception…It’s normal to strike preemptively to defend yourself from perceived threats, instead of waiting to see what will happen. Had the communists taken over, you don’t know that the death toll would not be far higher than the ‘few 100’…look at the 1917 revolution in Russia.
    By definition sure, today’s regime with all its faults, is more democratic than the Military regime, however, it’s the way events happened, and it’s what led to today’s ‘democracy’, no matter how weird it is.
    Getting free of the yoke of communism in the short/medium term, is almost impossible. It’s no use mulling over what MIGHT have been, but what WAS ; where it’s led us today, is what counts.

    Corruption grew again in civilian govts, as high posts in State-run companies became political feuds; to avoid this, the military would usually switch people around to prevent them from getting ‘comfy’. And one should remember, the military invested heavily in Brazil's infrastructure, preparing the base for future development.

    May 15th, 2018 - 05:32 pm - Link - Report abuse 0
  • Zaphod Beeblebrox

    DT,

    “You retracted your error and immediately made another one, or did you find some evidence that CFK ever asked the IMF for money?”

    OK, I got that bit wrong too. However, she did get into trouble with the IMF for providing false statistics and she didn't borrow from the IMF and defaulted. Happy now?

    May 15th, 2018 - 05:44 pm - Link - Report abuse 0
  • Tarquin Fin

    Everybody relax. The cavarlry has arrived. BlackRock boys are giving a hand.

    May 15th, 2018 - 05:47 pm - Link - Report abuse 0
  • DemonTree

    @JB
    ”it was also common for companies to increase salaries every month, based on (past) inflation.“

    It's not a wonder they had trouble ending it when the rises were anticipated in this way. It sounds inconvenient but it's obvious people found ways to cope because they had to.

    ”It (communism v the military) was not a choice available to the average citizen”

    No, because the choice was taken out of their hands. As for which is best/worst, I guess it depends where you are in society. The very poor in Vz (and there were/are a lot of them) were better off under Chavez, and even now are probably not much worse off than they were, despite the disaster it's caused to the country. True, we don't know how many might have died under communism, we also don't know that they would have even tried to take over, let alone succeeded, so it might have been none. And you didn't know beforehand what the military government would be like either, it depended on exactly who ended up in charge, something you didn't get any choice over.

    Anyway, that's all in the past. Now you have some general standing as a presidential candidate whose policies are rather alarming. It doesn't sound like he is too supportive of democracy.

    @ZB
    Yup. She got in trouble for providing false stats, and borrowing more wouldn't have helped prevent the default; they had the money, but the US courts blocked them from paying their creditors.

    May 15th, 2018 - 09:17 pm - Link - Report abuse +1
  • Jack Bauer

    @DT
    “No, because the choice was taken out of their hands.”
    Allow me to disagree. I think you're still missing the point....in March '64, with the political uncertainty caused by rumours of a president highly sympathetic towards the USSR, it was not an issue that could be handled by the 'people'....the Church, the business community and the press, reflecting society's fears, were pushing for measures to contain the political instability, and the military were the only ones who could do that. The situation had evolved to such a point that a solution - either way - was no longer in the hands of the average citizen.

    Regarding VZ under Chavez, defending him by saying the poor were better off then (and even then, only in the beginning) than now, is to ignore where the situation was headed, and to presume - naively - that such an experiment (leftist dictatorship) could lead to anything good....but ok, everyone chooses to see what they want to.

    As I've said exhaustively, no one knew what it would be like under communism (which was lurking on the horizon, like a bad omen), and far less what it would be like under the military (which took over without prior warning), so it's something you can only evaluate in retrospect... even if you want to consider both options bad, IMO the military was (by far) the lesser of two evils. If you had lived here at the time and were a communist with political ambitions (like the 'urban guerillas'), no doubt you'd position yourself with Dilma & Co.

    Regarding General Mourão, remember, it is the individual, not the armed-forces that might be a candidate...and his discourse of law & order is not anti-democratic. Despite the probability he'd be the only one able to put the house in order, I doubt he'd win. A lot of voters don't know their ass from their elbow.
    There're 17 candidates so far (quite absurd) which make the 1st round kinda unpredictable. Things should start to take shape in the 2nd round, with eventual coalitions.

    May 16th, 2018 - 03:58 pm - Link - Report abuse 0
  • DemonTree

    @JB
    I think the military should have waited to see if Goulart did anything rather than acting premptively. Perhaps they thought it would be too late after, but they would still have had options; it's not like there was that much support for communism in Brazil.

    But I think my original point was that communism wasn't worth it in Cuba despite the improvements to health, education etc, and the military government wasn't worth it despite (perhaps) less corruption and more investment in infrastructure. There's no threat of communism now so no other reason to want the military back.

    RE VZ, Maduro still has a surprising amount of support given what has happened. IMO it's a sign of how much previous governments neglected that part of the population that they would turn to Chavez as the only one who did anything to help them. If the more conventional governments had done more to develop the poverty stricken regions, this would never have happened.

    I know General Mourão is standing as an individual, and in theory there is nothing wrong with a(n ex-) general becoming president. I thought his law'n'order emphasis might appeal to you, but what I read about him in the article is decidedly off-putting. He wants the (elected) state government officials in RdJ to step down and let the military take over. He praised the colonel who headed the dictatorship's torture program, and supports Jair Bolsonaro.

    I believe that for effective policing, the people (the non-criminals), need to trust the police and the police need to be on the same side as the people. I think this is probably already not the case in the favelas where police are regarded with suspicion, but would likely be much worse if the military took over fully. Military training and mindset is different, they expect to be fighting an enemy and not their own countrymen. I think the result would be a *lot* of 'collateral damage', ie dead bystanders, and increased mistrust, and any benefits would be temporary.

    May 16th, 2018 - 09:22 pm - Link - Report abuse 0
  • Jack Bauer

    @DT
    “I think the military should have waited to see if Goulart did anything rather than acting premptively. ”

    Neither you, nor I for that matter, could possibly know the extent of the communist threat (before the fact, and specially because it was nipped in the bud), but it's easy to give advice after the event.

    “it's not like there was that much support for communism in Brazil.”.....this isn't really relevant....the 'people' generally speaking, specially back in the 60s, were in their great majority, uninformed about national / international events, so it's unlikely they would have any opinion formed about this or that political regime.
    If communism, as opposed to democracy, was so wonderful, why didn't it survive and spread like wildfire ? despite claims of improvements to health / (basic) education in Cuba, don't you think the people would have preferred to have those things allied to 'freedom'? they don't have to mutually exclusive.

    In Brazil now, the problem is social unrest (caused mainly by explicit PT policies - throwing the poor against the rich) and the inability of the civilians to get things back on track. True that the PT is still instigating their followers (MST and other social movements) to create chaos whenever they can, which produces an unfavourable atmoshere for investment and progress.

    In the last year over 50,000 Venezuelans have crossed to border into Brazil looking for refuge, and carries on at the rate of 1,000/day....doesn't say much for the people's approval of Maduro.

    It is obvious that your perception of the military is different to mine, probably because I have had first-hand experience with them, while you are basing your's on what has happened in some other LatAm countries. AFAIC, it boils down to having law & order or the spreading of the Rio situation to other States. IMO drastic situations require drastic solutions, but if you don't agree, and given the failure of the 'police' in Rio, what would you suggest ?

    May 17th, 2018 - 02:23 pm - Link - Report abuse 0
  • DemonTree

    “If communism, as opposed to democracy, was so wonderful, why didn't it survive and spread like wildfire ?”

    Because it wasn't so wonderful? But it did survive and spread in other parts of the world, encouraged (sometimes enforced) by Russia and China. That was why the US went to such lengths (immoral and illegal) to stop it spreading in Latin America. And if they really hoped to take over, I would have thought the communists would have tried to gain support among the poor. The more uninformed the easier to convince them.

    Do you think Temer is failing to get things back on track, then? That's unfortunate. As for the military, have you had first hand experience with them acting in the role of police? Stopping you in the street or pulling over your car, maybe? I gave you my reasoning above, which had nothing to do with other Latin American countries, but if you want a comparison you could look at Mexico. The military have been intervening in the drug war there since the end of 2006, but the problem has only continued to worsen. The state governments have used the federal intervention as an excuse to wash their hands of the problem and save money on their own police forces, and last year was the deadliest in 20 years.

    Anyway, I don't think a military intervention could never work, but I wouldn't want someone who admires torturers put in charge of it. It would need a clear plan and a limited time to achieve it's goals, not a policy of shoot first and ask questions later.

    May 17th, 2018 - 05:53 pm - Link - Report abuse 0
  • Jack Bauer

    @DT
    “Because it wasn't so wonderful?”.....are you implying it was 'wonderful' ? (???)
    Sure, it survived only where it was enforced with a fist of iron...at the expense of freedom and all it entails. In the same way that Russia tried to spread communism - and succeeded in Eastern Europe, only through brute military force - the USA had the same right as far as Latin America was concerned...IMO. The poor are usually uninformed and have less to lose, so it's understandable they'd lap up the fake promises of paradise.

    Temer has managed to stop the economy from continuing downhill, but (mainly thanks to the PT and other more radical parties) he has not managed to create an atmosphere of tranquility. His own corruption has not helped, and made many of his initial supporters lose faith in him. But then again, Congress has not been particularly cooperative either. Frankly , don't know what Congress is waiting for, but one thing is for sure, the next president will face a situation just as bad as Temer did when he took over...you'd think that the parties would rejoice at having a president who was willing to burn his popularity in order to push the reforms through, but to them, their popularity is more important than the country and its people.

    Under the miliary regime, the army intervened sporadically to support the police, but you must remember, in the 60s/70s, street crime was NO where near what it is today. I was never stopped in the street, nor pulled over while driving. The left (here and in EU) loves to depict the military as sanguinary monsters and implying that 99% of the population suffered at their hands...it's not true. Mexico is a case apart, but Rio is pretty similar.

    I think Bolsonaro's rhetoric is more of a ploy to rouse the silent majority, which just wants peace to be able to go about its daily biz, because IF he gets in, he will not have a free hand to dictate the rules...Congress, for what it's worth, usually tries to avoid extremes.

    May 17th, 2018 - 10:42 pm - Link - Report abuse 0
  • DemonTree

    No, the reverse. Communism sounds like a good idea but worked badly in practice, so although it did spread quite quickly after WWII most of the communist regimes eventually collapsed or became communist in name only, like China.

    But I would say the USA had the same *lack* of right to force mostly-repressive military dictatorships on the Latin American countries as the USSR had to force repressive communist regimes on Eastern Europe. There's a reason people from Eastern Europe often hate Russia, and people from Latin America often hate the USA. If instead the US government had tried to prevent communism by developing those countries' economies, ensuring fair trade and helping with infrastructure and education, I bet it would have been a lot more effective long term.

    In Brazil, although rooting out corruption is surely good in the long term, the investigations can't be helping economic stability today. Plus Temer's policies seem more aimed at fixing structural problems and the deficit rather than growing industry and the economy. The only sector I've heard positive things about is agriculture, boosted by record harvests.

    I suppose for politicians being unpopular is risking their jobs, but it IS important; there are some things they can do that deserve to make them unpopular and loose re-election, eg break their promises or steal from the public purse.

    You lived under the military regime, but it sounds like it didn't really affect your life in any way. And not being in Rio, you won't have had any contact with the current intervention, right? Besides, you're not who the police would be interested in, so you haven't much to fear. I think the people who live in the favelas might have a better idea of how to end the violence, but no one seems to be asking them.

    And I don't think your military are sanguinary monsters... if anything, I think they lack experience for dealing with well armed drug gangs experienced in turf wars. When did Brazil last fight in a war?

    May 18th, 2018 - 05:45 pm - Link - Report abuse 0

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