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Bolivia and Argentina: They Said “No” to the Austerity Jackals – and Prospered

Austerity jackal sent packing. (photo: dougwoods/flickr)

One of the interesting things about the widespread depression of the last five years is that it’s hit different places with varying effects. One of the other interesting things is that the places that are doing the best are the ones whose people have told the austerity jackals to bugger off. Yet another of the interesting things is that the establishment media outlets in the US aren’t exactly eager to tell you about these places.

Let’s look at Bolivia first:

In the past six years, Bolivia has become one of the Latin American countries most successful at improving its citizens’ standard of living. Economic indicators such as low unemployment and decreased poverty, as well as better public healthcare and education, are outstanding.

Between 2005 and 2010, the proportion of those in moderate poverty went down from 60% to 49.6%, while extreme poverty fell from 38% to 25%. Likewise, the unemployment rate decreased from 8.4% to 4%. The United Nations Development Programme (UNDP) points out that Bolivia is the top country in Latin America in terms of transferring resources to its most vulnerable population – 2.5% of its GNP.

How did Bolivia do all this? By ignoring the austerity jackals:

These economic and social successes have been attained following an alternative route to neoliberalism. Evo Morales’s government did the opposite of what the Washington Consensus recommends: it nationalised hydrocarbons, electricity, telecommunications and mining; renegotiated the presence of direct foreign investment in the country; implemented an expansive fiscal policy and closed borders to the free importation of economically strategic products. The state took 34% of the economy under its control.

This exceptional performance was obtained even though remittances decreased, the United States revoked the most-favoured nation status for some Bolivian products, and in spite of a global recession. The oil income is now three times that of 2005. The tax revenues went up. The international currency reserves are up to more than $12bn dollars. The banking savings-and-loans system has been “Bolivian-ised” and the external debt has been reduced. The bid now is that Bolivia will take a “big industrial leap” in the next five years so that it ceases to be an extractor of natural resources and begins to export value-added goods.

This is not surprising to anyone who isn’t under the spell of the Chicago Boys. Last century, Russia and China used a more comprehensive version of this state-sponsored neoliberalism to take themselves from economic and geopolitical backwaters, client states and (especially in the case of China) virtual colonies of the European powers, and transform themselves in less than three decades into global superpowers on a level with the United States.

Just as the story of Bolivia’s successfully blowing off the austerity jackals has been kept out of the US mainstream press, the story of Argentina’s even greater success is also not a favored topic in American mass media. Argentina had for years been controlled by a bloodthirsty junta very much influenced by the Chicago Boys then dismantling Chile’s societal safety nets. (You may remember that Chile’s privatized pension plans have (among other things) such obscenely-high overhead costs (in large part because the top execs take much bigger salaries than did any government pension-plan administrator) that poverty among the elderly has skyrocketed as a result. Yet conservatives and other austerity jackals consider Chile’s privatized pension plan a “success story”.)

The result? Argentina was weakened so badly that it teetered on the brink of total societal collapse. The Argentinians were forced to default on their IMF loans to survive — and instead of the doom so confidently predicted, have enjoyed growth rates that near double digits over the past decade.

No wonder why the austerity jackals don’t want you hearing about these places.

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