Porto Alegre, Brazil — The second annual World Social Forum (WSF) is now over, and the intention is to make it an annual event. But the questions being discussed among participants as they exchange hugs and business cards and board planes to various parts of the globe is, what shape should this gathering take in the future?
The world’s third-largest recipient of U.S. military aid is the South American nation of Colombia, the focus of our never-ending war on drugs. Before September 11, this made a lot of people in Washington nervous. Now there is even more reason to worry. President Bush’s fiscal 2003 budget is requesting $98 million in new Pentagon training and equipment for the Colombian military, in a new initiative to transform the war on drugs into part of our global war on terror.
Porto Alegre, Brazil As the sixth and final full day of the World Social Forum dawns here on southern tip of Brazil, delegates prepare for a now-familiar routine of dawn to dusk forums, side meetings over meals, and impromptu protests in the foyer of the main campus building. Today’s events culminate with a mass march opposing the FTAA (Free Trade Area of the Americas), the United States’ main proposal for integrating the hemisphere under a single trade and investment regime.
Porto Alegre, Brazil – The World Social Forum (WSF) officially began Thursday evening (Jan 31) with a march through the heart of this city’s main business district by some 10,000 delegates waving a sea of mostly red banners, chanting political slogans, and beating pots and pans, a Latin American symbol of protest. They gathered in a lakeside park for a 4-hour cultural performance by a variety of Brazilian bands and dance groups and a satellite hook-up via a giant television screen with worker and labor groups protesting outside the World Economic Summit in New York City.
Porto Alegre, Brazil–Under a strong summer sun and a broad political proclamation that “Another world is possible,” tens of thousands of activists from around the world are arriving here for the second annual World Social Forum. The host, like last year, is Brazil’s southernmost major city, capital of the state of Rio Grande de Sul. The city and state governments, which are both facilitating and underwriting some of the Forum’s cost, have won international acclaim for their progressive policies, providing extensive social services and a high quality of life.
In the midst of their fourth year of recession, with the official unemployment rate approaching 20%, and with increasing cutbacks of social programs, Argentinians took to the streets in the days before Christmas. Sparked by the government’s latest economic policies, which restricted the amount of money people could withdraw from their bank accounts, political demonstrations and the looting of grocery stores spread across the country. First the government declared a state of siege, but with the police often standing by watching the looting “with their hands behind their backs,” there was little the government could do. Within a day after the demonstrations began, the principal economic minister had resigned; a few days later came the president’s resignation.
The inevitable has now happened. The strategy of the government of President de la Rua was to revive the sinking economy by re-attracting IMF credits and foreign capital. To appease the IMF and Wall Street, it chose to remain with a policy triad that had ceased to make sense. This was to defend at all costs a severely overvalued peso exchange rate, keep up full servicing of the oppressively large dollar debt, and balance the fiscal budget in the face of skyrocketing unemployment and falling production.
The reverberations from the Asian financial crisis of 1997-98 enmeshed the International Monetary Fund (IMF) in a major legitimacy crisis over its recently assumed mission to promote free capital mobility around the globe. The repercussions from the current Argentine crisis threaten to apply the coup de grace to that mission. The mission, which deviates drastically from the IMF’s original function under its Bretton Woods charter, was designed to support the U.S. free market globalization strategy. The mission crisis of the IMF is thus also a U.S. policy crisis.
For most of the past decade Argentina had been the poster child of the IMF and Wall Street. No developing country in the 1990s had opened its financial markets more avidly, or privatized its state assets more fervidly. These structural reforms were supported by monetary reforms in 1991 that legally froze the peso/dollar exchange rate and tightly tied the money supply to the changing stock of hard currency reserves. To further gain Wall Street confidence, the Argentine government in 1991 announced a major foreign policy shift from nonalignment to an all-out pro-U.S. position–“in carnal embrace,” Foreign Minister Guido Di Tella sardonically put it.
“After our trip to Buenos Aires,” the investment firm of Merrill Lynch announced in early July, “our main impression is that the risks of a spiraling of the crisis in Argentina have increased.” Investors took the warning to heart. On July 11, in its efforts to raise funds on the bond market, the Argentine government was forced to offer interest rates of 14% on its three month bonds; only two weeks earlier, investors had demanded only 9% for similar bonds.