HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » Latest Breaking News (Forum) » Argentine Gov't moves to ... » Reply #5

Response to Igel (Reply #3)

Sun Mar 1, 2015, 07:41 PM

5. Yes, but this isn't really about the IMF.

We can quibble over the motives all you like, but a decade later or so the results were plain to see: dilapidated service with a limited reach (6k miles, compared to 21k before); heavier reliance on subsidies than ever (see above); and contrary to Wall Street (and IMF) promises, zero benefit to national coffers (au contraire).

Naturally the IMF did a lot of cheerleading at the time it was happening, but to be fair the decision wasn't theirs: it was an obsequious (and corrupt) Carlos Menem administration that privatized these and other state firms for a fraction of their real value, and by way of sweetheart deals that entitled privatized firms to receive hefty subsidies ad infinitum as in the case of the railways (that's "free market reform" for you).

To put in broader context, around $24 billion were earned by privatizations in Argentina during the 1990s. But around $15 billion of that was in the form of Brady Bonds that were worth 60 cents or less on the dollar, meaning that the Argentine state earned at most $18 billion (most of which went to debt repayment, at 10% interest, anyway).

A Bank of England audit requested by Menem himself, found that Argentina's 300 state-owned enterprises had $1 trillion in assets at the time the privatization drive began in 1990 (!).

That's not privatization - that's profitization.

Reply to this post

Back to OP Alert abuse Link to post in-thread

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Please login to view edit histories.