[News] These Dark Times Are Also Filled with Light - Argentina

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Thu Apr 21 10:27:18 EDT 2022

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*These Dark Times Are Also Filled with Light: The Sixteenth Newsletter 

Shengtian Zheng and Jinbo Sun, /Winds of Fusang/, 2017. ‘Fusang’ is an 
ancient Chinese word referring to what some believe to be the shores of 
Mexico. The work is an homage to Latin America’s influence on China, 
particularly that of Mexican artists on the development of modern 
Chinese art.

Dear friends,

Greetings from the desk of Tricontinental: Institute for Social Research 

In early March, Argentina’s government came to an agreement 
with the International Monetary Fund (IMF) on a $45 billion deal to 
shore up its shaky finances. This deal was motivated by the government’s 
need to pay a $2.8 billion instalment on a $57 billion IMF stand-by loan 
taken out under former President Mauricio Macri in 2018. This loan – the 
largest loan in the financial institution’s history – sharpened divides 
in Argentinian society. The following year, the Macri administration was 
ousted in elections by the centre-left Frente de Todos coalition which 
campaigned on a sharp anti-austerity, anti-IMF programme.

When President Alberto Fernández took office in December 2019, he 
refused the final $13 billion tranche of the IMF’s loan package, a move 
applauded by large sections of Argentinian society. The next year, 
Fernández’s government was able to restructure the $66 billion debt held 
by wealthy bondholders and open discussions with the IMF to delay 
repayment of the debt incurred by Macri’s government. But the IMF was 
rigid – it insisted on repayment. Neither the Macri loan nor the new 
deal under President Fernández settles Argentina’s long-term struggle 
with its public finances.

Carlos Alonso (Argentina), /La oreja/, 1972.

The term ‘odious debt’ is used to describe the money owed by societies 
whose governments have been undemocratic. The concept was crafted by 
Alexander Nahum Sack in his book /The Effects of State Transformations 
on Their Public Debts and Other Financial Obligations/ (1927). ‘If a 
despotic power incurs a debt not for the needs or in the interests of 
the State, but to strengthen its despotic regime, to repress its 
population that fights against it, etc.’, Sack wrote 
‘this debt is odious for the population of the State’. When that 
despotic regime falls, then the debt falls.

When Argentina’s military ruled the country (1976–83), the IMF 
generously lent it money, ballooning the country’s debt from $7 billion 
at the time the military took power to $42 billion when the military was 
ousted. Plainly, the IMF’s provision of funds to the Argentinian 
military junta – which killed, tortured, and disappeared 30,000 people – 
set in motion the ugly cycle of debt and despair that continues till 
today. That those ‘odious debts’ were not annulled – just as the 
apartheid debt was not annulled in South Africa – tells us a great deal 
about the ugly reality of international finance.

Gracia Barrios (Chile), /Desaparecidos/, 1973.

The deal cut by the IMF with the Fernández government is exactly like 
other deals that the IMF has made with fragile countries. During the 
pandemic, 85% of the IMF’s loans to developing countries came 
with austerity conditions that sharpened their social crises. Three of 
the most common conditions of these IMF loans are cuts and freezes to 
public sector wages, the increase and introduction of value-added taxes, 
and deep cuts to public expenditure (notably for consumer subsidies). 
Through its new deal with Argentina, the IMF will inspect the operations 
of the government four times per year, effectively becoming an overseer 
of the Argentinian economy. The government has agreed to reduce the 
budget deficit from 3% (2021) to 0.9% (2024) to 0% (2025); to accomplish 
this, it will have to cut large areas of social spending, including 
subsidies for a range of consumer goods.

After reaching the agreement, IMF Managing Director Kristalina Georgieva 
pointed out the great difficulties faced by Argentina, though these 
difficulties will not be ameliorated by the IMF plan. ‘Argentina 
continues to face exceptional economic and social challenges, including 
depressed per capita income, elevated poverty levels, persistent high 
inflation, a heavy debt burden, and low external buffers’, she said 
Consequently, Georgieva noted, ‘Risks to the program are exceptionally 
high’, meaning that further default is all but certain.

Shengtian Zheng and Jinbo Sun, /Winds of Fusang/ (close up), 2017.

A few weeks before Argentina came to terms with the IMF, President 
Fernández and China’s President Xi Jinping held a bilateral meeting in 
Beijing at which Argentina signed 
onto the Chinese-led Belt and Road Initiative (BRI). Argentina is the 
twenty-first country from Latin America to join the BRI. It is also the 
largest economy from the region to join, pending applications from 
Brazil and Mexico. Expectations rose amongst sections in Argentina that 
the BRI would provide a pathway to exit the grip of the IMF. This 
remains a possibility even as President Fernández returned to the IMF.

Our team in Buenos Aires has been looking carefully at China’s growing 
ties with the Caribbean and Latin America. These studies resulted in our 
most recent dossier 
no. 51, /Looking Towards China: Multipolarity as an Opportunity for the 
Latin American People/ (April 2022). The main argument of the dossier is 
that the emergence of programmes such as the BRI offers countries such 
as Argentina choices for development finance. If Argentina has more 
latitude in choosing its avenues for finance, then it will be better 
positioned to reject harsh offers of stand-by assistance from the IMF 
which come with conditions of austerity. The possibility of these 
choices opens the door for countries such as Argentina to develop an 
authentic national and regional development strategy that is not written 
by the IMF staff in Washington, DC.

The dossier is quite clear that the mere entry of the BRI into the 
Caribbean and Latin America is not sufficient. Deeper projects are 

It is possible for Chinese integration to further the ‘development of 
underdevelopment’ if the Latin American state projects produce a new 
relationship of dependency on China by merely exporting primary 
products. On the other hand, it will be far better for the region’s 
peoples if the relationship is based on equality (multipolarity) as well 
as the transfer of technology, the upscaling of production processes, 
and regional integration (national and regional sovereignty).

Josefina Robirosa (Argentina), /Bosque azul /(‘Blue Forest’), 1993-94.

The BRI’s annual disbursement of funds is around $50 billion, with 
suggesting that, by 2027, total BRI spending will be about $1.3 
trillion. These capital flows primarily focus on long-term investments 
in infrastructure rather than short-term bailouts, although new studies 
suggest that China has offered short-term liquidity to several 
countries. Between 2009 and 2020, the People’s Bank of China entered 
into bilateral currency swap arrangements with at least 41 countries. 
These currency swaps take place between the local currency (the 
Argentinian peso, for instance) and China’s renminbi (RMB), with the 
local currency as collateral and the RMB used either to buy goods or to 
acquire dollars. The combination of BRI investments and RMB currency 
swaps provide countries with immediate alternatives to the IMF and its 
austerity demands. In January 2022, Argentina’s government asked China 
to increase its 130-billion-yuan swap ($20.6 billion) by an additional 
20 billion yuan ($3.14 billion) to cover the IMF payment. A few weeks 
later, the People’s Bank of China provided 
the necessary swap to Argentina’s Central Bank. Despite this infusion of 
cash, Argentina still went to the IMF.

The answer to why Argentina took that decision can perhaps be found in 
the letter 
written by Martín Guzman (minister of the economy) and Miguel Pesce 
(president of the Central Bank) to the IMF’s Georgieva on 3 March 2022. 
In the communication, Argentina promises to ‘improve public finances’ 
and to restrain inflation, which are straightforward orthodox positions. 
But then there is an interesting obligation: that Argentina will expand 
exports and draw in foreign direct investment to ‘pave the way to an 
eventual re-entry into international capital markets’. Rather than use 
the opportunity afforded by BRI-currency swaps to develop its own 
national and regional agenda, the government seems eager to use whatever 
platform possible to return to the status quo of integration into the 
capitalist marketplace for finance dominated by Wall Street and the City 
of London.

On 12 April 2022, the Committee of Creditors of Internal Debt (CADI) 
that the people of Argentina refuse to shoulder the burden of the IMF 
debt. The people should not pay a single peso: those who squirrelled 
away the billions that Macri borrowed from the IMF should be the ones 
who pay the price. Banking secrecy laws need to be suspended in order to 
draw up a list of those who took that money and hid it in tax havens. 
The hashtag of CADI’s campaign is #LaDeudaEsConElPueblo – the debt is 
with the people. It should be paid /to/ the people, not drawn from them.

As the Argentinian poet Juan Gelman (1930–2014) wrote during the reign 
of the military junta, these are ‘dark times, filled with light’. This 
phrase resonates even now:

dark times/filled with light/the sun/
pours sunlight onto the city/ torn
by sudden sirens/the police on the hunt/night falls and we/ make love 
under this roof

Gelman, a communist, fought the dictatorship, which killed his son and 
daughter-in-law and damaged the spine of his country. Even the dark 
times, he wrote, echoing Brecht, are filled with light. These are tough 
moments in world history, but even now there remain possibilities, there 
remain people gathered on the streets of Buenos Aires and Rosario, La 
Plata and Córdoba. Their slogan is clear: /no to the pact with the IMF/. 
But theirs is not only a politics of ‘no’. It is also a politics of 
‘yes’. Yes to taking advantage of the new openings to shape an agenda 
for the well-being of the Argentinian people. Yes, also yes.



Website <www.eltricontinental.org>




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