Argentina Another Country to Brush Off Liberal Dogmas
May 1, 2012
It should be borne in mind that Latin America was the epicenter of the neoliberal reform that swept across the world in the 1980ies. In the epoch, politicians, the media people, and financial players - a community on the payroll of the Bilderbergers' shadowy world government - eagerly subscribed to the universality of the solution offered by market liberalization. With an overarching justification derived from the radical doctrine, privatization campaigns took off in various parts of the continent from Mexico to Argentina and Chile, typically reaching breakneck proportions in the countries run by dictatorial regimes. The originally Chilean pattern of displacing the legitimate government to pave the way for predatory reforms – a combination of media allegations with deliberate disruptions of the supply of necessities to the outraged population – was extensively replicated by the neoliberal forces worldwide. The reality that eventually confronted the nations whose economies had been rearranged in line with the untamed market recipes was the loss of economic sovereignty plus the unfair enrichment of the liberal governments' cronies, the internationally empowered reformers, and the omnipresent transnational grands.
The myth of the superiority of neoliberal capitalism held out for a couple of decades, echoing with recurrent economic crises, socioeconomic turbulence, and rivalries over energy resources or transit routes which routinely escalated into wars as in Afghanistan, Iraq, Libya, and Syria. These days, the trend promises to continue in the form of a US and Israeli snap offensive against Iran.
Sober and nationally-oriented figures in the ranks of the world's political class are painfully aware of the risk of the coming global US military dictatorship. Nations which cherish their sovereignty are making serious attempts to stay clear of the Empire, both for fear of being drawn into its international escapades and due to the growing realization that giving in to the neoliberal economic order imposed by Washington will have disastrous consequences. The tendency is manifest in Latin America where the ALBA countries insulate key sectors of the economy from privatization and gradually modernize them based on budgetary infusions. Attracting investments to vital infrastructures, the populist regimes in Venezuela, Ecuador, Bolivia, and Nicaragua do retain control over them along with the privilege to set the corresponding development objectives.
Western watchers contend that, swayed by the advice from the “radical” camp, Argentine's Cristina Kirchner increasingly adopts the populist economic approaches typical of Hugo Chavez. Importantly, the Venezuelan leader earned a reputation of a reliable friend of Argentina back during the presidency of Nestor Kirchner and helped the country at the peak of the crisis when Venezuela poured loans and investments into Argentina and propped up its economy by massively absorbing Argentinian agricultural exports. No doubt, Cristina Kirchner's government fully took into account the populist economic experience en route to the decision to recover the YPF assets contrary to the imminent outcries from Repsol and elsewhere in the West.
The privatization of YPF, an ugly maneuver which caused considerable damage to the Argentinian economy, took place under president Carlos Menem and prompted lingering speculations that he or individuals from his inner circle had benefited personally from the move. It illustrates the impact of the privatization which led to the creation of Repsol YPF on Argentine's national interests that over the past years the country sank to the status of a net energy importer. In 2011 – for the first time in a quarter of a century – Argentina imported more energy than it exported, while Repsol YPF was slashing investments in exploration.
Cristina Kirchner charged quite convincingly that the Spanish operator's involvement had been limited to maximizing revenues from the exploitation of Argentinian energy resources. Experts in Argentina warned about the threat that the company's aggressive practices could in the foreseeable future leave the energy fields in the country depleted. Worse than that, multiple reports indicate that the Spanish stakeholders were knowingly undermining Argentinian energy security and held talks with potential buyers, Chinese in particular, in a bid to dump the YPF energy assets.
Spain reacted to the YPF retaking by spearheading the formation of a kind of a neoliberal solidarity bloc. Spanish industry minister Manuel Soria said that moves unfriendly to Spanish companies – regardless of where in the world they occur – would be interpreted as expressions of hostility towards Madrid by the Spanish government and pledged that the Argentinian government would accordingly face consequences. Ire at the “seizure” of Repsol assets was voiced by the US, Great Britain, the World Bank, and the Latin American right-centrist trio comprising Mexico, Columbia, and Chile.
The Euro 8b compensation claim rolled out by Repsol became a staple in the Western media. US papers showered Cristina Fernández de Kirchner with offensive comments and The Wall Street Journal bluntly accused the Argentinian leader of a “nationalist tilt”, described the nationalization as a “grab”, and called for the expulsion of Argentina from G20. The Washington Post upheld the same appeal and slammed her over alleged “autocratic populism”, projecting that “Argentina’s isolation from the world, and from the economic progress of its neighbors, will continue to grow”. The neighbors, hypothetically, are Chile and Peru.
The Western propaganda asserts that the YPF nationalization will in the long run harm Argentina as foreign companies scared by the supposed radicalization of the regime will from now on refrain from launching projects in the country and the inflow of investments to it will dwindle. In the meantime, the ALBA countries and Brazil stand by Argentina and cite a completely different set of arguments – oil and gas being essential to national security, opening to transnationals the energy sector imminently means putting sovereignty in jeopardy and severely narrowing down the list of options in strategic decision-making.
Spain, the country with a record of ruthless treatment of Latin American natives, in a sense recaptured the continent during its privatization epoch and, nominally dealing with sovereign states, rebuilt in the modern world's settings the situation whereby it is able to extract resources from the continent. It is an open secret that the Spanish embassies' staff took part in the conspiracies organized by the CIA in Venezuela, Ecuador, and Bolivia. In Spain, the activity is explained away as necessary to open to Spanish companies and banks new opportunities in Latin America. Repsol YPF, in a stark example, felt powerful enough to evade any kind of oversight, to conceal revenues, to disregard ecological responsibilities, and even to meddle with Argentina's domestic affairs. In a number of cases, Repsol reportedly sponsored subversive groups or bought favors from state officials including the bosses of Indian organizations who somehow greenlighted oil production on native people's lands.
As expected, the Senate passed the bill submitted by Cristina Fernández de Kirchner by a wide majority on April 25. Hearings in the Chamber of Deputies are due next week, and the opposition will likely vote for the nationalization along with the president's supporters. Indeed, there is no shortage of arguments to back the initiative. Energy resources nationalization and tighter state control over the energy sector have proved beneficial to the economies of Venezuela, Bolivia, and Ecuador. Argentina should be able to overcome the problems the Western coalition intends to present it with and to make great progress, especially since the country can count on support from ALBA and Mercosur.
Former Argentinian president and present-day senator Menem who oversaw the oil sector privatization in the 1990ies gave an interview on the eve of the senate vote. He did not hesitate to say:
- I will certainly attend the session and support recovering state control of YPF.
- That sounds rather strange considering that you were the one to privatize the company...
- That is correct, but now is a new epoch, completely different from the one we used to live in. Times are changing, the scenario has changed.
The above statement went practically unreported in the media. In some of the world's countries, proponents of total privatization continue to cultivate neoliberal illusions and still handle economies as if the world's signals that the model is being brushed off do not reach them.