Latin America Delivers a Swift Kick

[marmar]

from CounterPunch:



Latin America Delivers a Swift Kick
by CONN HALLINAN


On one level, April’s hemispheric summit meeting was an old fashioned butt kicking for Washington’s policies in the region. The White House found itself virtually alone—Dudley Do Right Canada its sole ally—on everything from Cuba to the war on drugs. But the differences go deeper than the exclusion of Havana and the growing body count in Washington’s failed anti-narcotics strategy. They reflect profound disagreements on how to build economies, confront inequity, and reflect a new balance of power in world affairs.

The backdrop for the summit is anger in Latin America over the failure of the U.S. and Europe to stimulate their economies, all the while pursuing policies that have flooded the region with money—a “ monetary tsunami” in the words of Brazilian President Dilma Rousseff—driving up the value of southern hemisphere currencies and strangling local industries.

After meeting last month with President Obama, Rousseff said she told him of Brazil’s “concern with the expansionary monetary policies of the rich countries…leading to the depreciation of developed countries currencies and compromising growth among emerging economies.”

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Argentina is the poster child for the region’s rejection of the so-called “Washington consensus.” Throughout much of the ‘90s, a deeply indebted Argentina followed the strictures of the International Monetary Fund (IMF), slashing government spending and instituting a suffocating austerity. The result was a “debt trap”: cutbacks increased unemployment, which dampened tax revenues, which required yet more cutbacks, and more unemployment. In the end, debts went up. From 1998 to 2002, Argentina’s economy shrank 20 percent. By the time Buenos Aires finally said “enough” and defaulted on its $100 billion sovereign debt, half of its 35 million people were below the poverty line. ..................(more)

The complete piece is at: http://www.counterpunch.org/2012/05/01/latin-america-delivers-a-swift-kick/