Obligatory Michael Hudson quote:

Among the BRICS+ countries, Argentina is a case in point. Its foreign dollar debt has grown largely by IMF sponsorship. The IMF’s main political function in US foreign policy has been to enable pro-American client oligarchies to move their money out of countries whenever there is a chance of a left-wing or simply democratic reformer being elected. Convert their Argentinean currency into dollars lowers the peso’s exchange rate. Without IMF intervention, that would mean that as the exchange rate falls, the wealthy classes engaging in capital flight receive fewer and fewer dollars. To support the currency – and hence, the hard-currency dollars that capital-flight actors receive – the IMF lends the right-wing government dollars to buy up the excess pesos that the client oligarchy is selling off. That enables Argentineans to move their money out of the country to obtain a much higher amount of US dollars than they would if the IMF were not lending money to the right-wing puppet government.

When the new reform government comes in, it finds itself loaded down with a huge foreign debt owed to the IMF. This debt has not been taken on in a way that helped Argentina develop its economy and earn dollars to pay back the loan. It is simply a result of IMF support of right-wing governments. And the IMF then tells the new government (whether Argentina or any other debtor) to pay off its foreign loans by lowering the wages of labor. That is the only way that the IMF recognizes for countries to “stabilize” their balance of payments. So the reform government is obliged to behave just like a right-wing government, intensifying the class war of capital against labor. The “cure” for their balance-of-payments deficits thus becomes even worse than the original disease, that is, its rentier oligarchy moving their money out of the country.

Nothing will change until the dollar debt problem can be resolved. De-dollarization can only come from debt cancellation:

Recently, [Argentina] paid back part of one of these odious IMF loans. It did so with money that it borrowed from China. And China has been in discussions about raising its quota in the IMF to reflect its rising economic power. Yet US politicians have designated China as America’s number-one long-term enemy, and are seeking to expand NATO into the Pacific to ramp up military threats to China. The US/NATO war in Ukraine has been described as a strategy to destroy Russia’s economic ability to support China in the coming Cold War. And to support the West’s arms supply to fight Ukraine, the IMF has lent Ukraine seven times its quota – despite this large a loan being against the IMF rules, despite Ukraine being at war, and despite the fact that this loan obviously cannot be repaid. The Germans have helpfully suggested giving the $300 billion in confiscated Russian reserves to Ukraine to pay its foreign creditors and pay for more US arms.

It therefore seems quite obvious that the IMF cannot play a role in any BRICS bancor arrangement. But it also shows how hard it is to create an alternative economic system to the present legacy of World War II.

The most serious problem has not been discussed publicly. There is no way that a viable and resilient economy for Global South countries and their arrangement for central banks can take shape without repudiating the overhang of US dollar debt. This unpayably high foreign-debt burden is a legacy of US-sponsored financial colonialism. As long as this debt is kept on the books, countries will remain obliged to use their trade surplus and sales proceeds from selling off their property to foreign investors to pay their former colonial powers and post-colonial creditors.

I don’t think there’s a unique cause this happens. Different people will have different motives. Having said this, some causes are:

• Anti-peronism. As shown in the last election, there’s like 20-25% of the people that will vote for whatever opposes the Peronist party.

• Social media, especially tiktok. Milei has been extremely successful conquering that space, so younger generations just get excited to see some “radical change”.

• Perceived corruption of the peronist party. I won’t say this isn’t real, but I don’t think it’s as bad as most people think. Also, all corruption concerns fly out the window once a right wing guy is in the government.

• Traditional media. We have our own version of Fox News, which is also quite successful at appearing neutral to these that can’t criticize what they consume.

Some people also overfocus in whatever feel is the current issue, two examples.

• People worried about inflation remember fondly the 90s, despite unemployment getting close to 20%.

• People worried about crime will remember fondly the last dictatorship because “you could walk safely at night”. This last one is especially false, because every statistic shows that Argentina isn’t an insecure country and it was the military that could kill you at night without consequences.

I once saw a Milei interview on YouTube. It was from before he became president. He went on a deranged tirade about how “the central bank are thieves” without explaining why. In the comments, a British guy was commenting about how wise he was.

The interview where he was spouted this nonsense and the “interviewer” just sat there nodding in agreement reminded me of India’s news media of today. Billionaires have an unopposed and total control of TV news channels and newspapers which then do uncritical PR for their favoured political party of their patrons (mostly BJP) and most of the “news” has devolved into an electoral circus where the “news” is concerned with what this and that politician said about an event rather then the event itself.

The billionaires that own these news outlets welcome imperialists plundering their motherland as long they get a cut from it. I reckon it should be similar in Argentina.