Sunday, May 18, 2003

Global capital seems to be shivering in its boots again now that another left-wing populist is poised to come to power in another Latin American country. First it was Hugo Chavez in Venezuela, then Lula da Silva in Brazil, followed by Lucio Gutierrez in Ecuador. Now we have Nestor Kirchner on the horizon in Argentina, who has the audacity to suggest that some of the country's foreign debt is "illegitimate" and may be repudiated or at least forcibly rescheduled. Kirchner even had the gall to say "We are not disposed to do everything to continue paying international creditors at the expense of the hunger of Argentines". Shocking!

Funny how when Latin America questions the legitimacy of its foreign debt, capital markets start wetting their pants, but when the US Treasury announces (as it did in April) that Iraq's debts (mostly to Russia, France and Kuwait, *not* the US) must be written down because they were amassed under illegitimate circumstances, Wall Street and the City nods its collective empty head in agreement. How convenient that both John Snow and global financial capital found religion in Iraq just in time to lose it in Latin America.

A final interesting point in this NYTimes article is how Kirchner is "more enthusiastic about strengthening trade ties with fellow members of Mercosur, the South American common market, especially Brazil, than about seeking a bilateral agreement with the United States or joining Washington's Free Trade Area of the Americas." With nominal lefties now leading the three largest economies of South America, one can only hope the FTAA -- at least in its uber-NAFTA-for-the-hemisphere superhero cape and mask -- is now a dead letter.

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