Caught firmly in a debt trap: Argentina's descent into penury

Adolfo Perez Esquivel, Project Syndicate

"Everything . . . everything changes." So goes the refrain in a famous Argentine song. But actually, in Argentina everything stays the same or becomes worse.

Heraclitus's warning against bathing in the same sea twice is lost on our economic ministers, who insist on bathing regularly in contaminated waters. Whenever they go bathing, they follow the same path, first raising concerns over what will happen if Argentina pays back its foreign debt, and then inevitably paying back the debt under strong pressure from the International Monetary Fund and the U.S.

Sometimes, Argentine negotiators respond to international bond owners, who harass the government in an effort to force payment on what cannot be paid. By playing this endless game, our ministers leave for tomorrow what they lack the courage to face today, knowing full well that this ruse will end tragically for Argentines.

The sagacious historian and politician Arturo Jauretche liked to say, "It's not about changing our collar; it's about ceasing to be a dog." His companions, however, remain unconvinced and seem resigned to failing to find an alternative to the neo- liberal taxation model for paying the foreign debt. They believe we will be condemned to the abyss unless we accept rules created by the world's powerful.

This is wrongheaded; it's time we cease being dogs. Our foreign debt, or more appropriately our eternal debt, cannot and should not be paid. It is an immoral debt and a profound human rights issue. The debt is used to dominate people, and the impact is cruel and abusive.

The world's indebted nations, unfortunately known as the Third World, transfer capital to the rich nations by paying interest on their foreign liabilities. This generates a vicious, untenable cycle of deep poverty and social exclusion for the south. The northern countries, unfortunately known as the First World, use the hunger and poverty of southern nations to ensure a better life for themselves.

Argentina's foreign debt was generated during the military dictatorships, when the rich nations of the north provided credit to despots and sold them weapons to repress their people. These private debts were passed along to the populace, which received nothing from the loans but is now expected to pay them back.

Indeed, Argentina's case is pathetic. It was a rich country, a great producer of food, where endemic diseases such as leprosy, parasites, and tuberculosis had been defeated and literacy thrived. True, Argentina endured fifty years of military dictatorships and weak civil governments. But, up until the 1970s it was never heavily encumbered by debt.

Today, 23 million Argentines are poor, and more than 10 million live below the poverty line. Everyday, nearly 100 children die from hunger and preventable diseases. Our indigenous communities continue to lose their land to foreign corporations. Endemic diseases and illiteracy are increasing. Hundreds of factories have closed, driving up the unemployment rate to nearly 30%. Nonetheless, we continue to transfer capital to rich countries to pay interest on our foreign debt. The more we pay, the more we seem to owe and the less we have.

Still, Latin Americans know how to resist and how to create social movements to fight the "axis of evil" -- militarization, foreign debt, and the Association of Free Trade for the Americas -- that seeks to subject their continent to re-colonization by the U.S. The free trade agreement, for example, would provide North American companies with the same production and investment conditions that are available to our companies and grant them agricultural subsidies against which no Latin American country can compete.

Because foreign debt has such a direct impact on people's lives, diverse proposals have been made to government officials, in the belief that the foreign debt burden is fundamentally a political problem -- one that must be faced now, not later. Essential to any real change is the creation of continental unity and regional affiliations such as Mercosur, and the Andino and Caribbean Pacts.

We must differentiate legitimate debt from illegitimate debt, which means taking the problem before the World Court in The Hague. The World Social Forum, which met this year in Bombay, India, is another useful body that is generating alternative proposals to overcome the dire situation of the heavily indebted countries.

People across Latin America must unite to preserve their sovereignty, their environment, and respect for human rights, all of which are systematically being violated. We need to re- consider how we define our democracies, which appear to be mere formalities with little real substance. The fact that we can vote is an important victory, but it does not guarantee us the hope and dignity that we deserve.

The writer won the Nobel Prize for Peace in 1980. He is now director of Servicio Paz y Justicia, a human rights organization based in Buenos Aires.