The IMF and Argentinas Future In A Global Economy †Political Science

The IMF and Argentinas Future In A Global Economy – Political Science Free Online Research Papers The IMF and Argentina’s Future In A Global Economy Political Science In December 2005 Nestor Kirchner, the Argentinian president, announced that the country was to repay the IMF the outstanding $8.5bn of debt owed to the organisation from a series of loan agreements that had stretched back to the early 1980’s. Economically, it will also add some closure to Argentina’s $183bn default of 2001, (of which $103bn was owed directly to the IMF), yet the implications that this affair will have on both parties and the on the global stage are of intense interest. This essay will take a closer look at how we reached this current state of affairs. Notably, it will examine how the neo-liberal ethos of the IMF has proved to be insufficient in turning around this countries economic fortunes and will ask what future beckons for the role of international bodies in the successful restitution of sovereign nation economic privation. The case of Argentina Argentina since becoming a democracy in 1983 has had a chequered economic performance. From the years 83-89, under the leadership of President Raul Alfonsin, its economy suffered from constant hyperinflation (of up to 5000% per year) and a government that managed its effect ,or more aptly mis-managed, via central bank money creation. The net result was to make the peso next to worthless on the international currency markets and Argentina an unattractive investment opportunity. Eventually, the politics caught up with the economics as Menem replaced Alfonsin and embarked on a policy dynamic of dealing with international financiers, including the IMF, and being persuaded him to initiate a policy of dollar pegging and liberalising of aspects of the economy. During this period the period the IMF continued to supply rolling loans with Argentina’s solid economic performance in the first half of the 1990’s being hailed by many to be a testament to the organisation’s ec onomic rigours. Certainly it was felt that this proved the the neo-liberalist economic approach to economic development to be paramount). However, this was not to last and by tying itself in with the global economy, Argentina left itself exposed to the severe exogenous shocks when Mexico in 1995, South East Asia in 197 and Brazil in 1999 all suffered severe capital flight and adopted (under the recommendation of the IMF) currency devaluation. Argentina, who having pegged the currency to the dollar, was unable to take such action and the loss of competitiveness and export markets led to a sharp downturn in the Economy, so much so that by 1999 the economy had started to contract. From this point on the country was facing a losing battle, lumbered with an overvalued pesos, a barrage of loan interest payments, and a global financial market that had already condemned the country to default, in 2001 the country did precisely that and in spectacular fashion . In the years since its default the country did continue to work with the IMF in an attempt to redraw its arrangements with it creditors to force them to accept a ‘haircut’ of around 40-50% of the original loan. At the same time the topic of the IMF and its role in the country’s economic demise has become the key cultural and political issue within Argentina and one that got President Kircher elected on a fiercely anti-IMF policy platform. All of this leads to a need to examine whether such attacks on the IMF are legitimate, how Argentina was able to default on such a large sum and to ask what it entails for other severely indebted countries. The consequences of IMF intervention The IMF, when it negotiated its structural loans with Argentina, insisted that the countries main economic woes stemmed from a poor infrastructure in which profit was being lost due to false pricing, indexed wages, draconian trade restrictions and a social welfare system that lacked any kind of a market dynamic. Subsequently, it insisted that the country embark of a policy of heavy liberalisation under the economic mantra that rational investors view competitive advantage as the major factor in deciding where to place credit and to commit long term FDI and that with these factors under control Argentina would emerge as a stronger, more attractive investment opportunity. But, the market, and the societies they operate in are not rational and the impact of this misjudgement has been dramatic. Firstly, the liberalisation and loss of indexed wages in the name of international competitiveness has hit the ‘bring home’ pay of most workers. In fact, when compounded by upward price changes brought about as part of commodity price normalisation policies it is clear that for many families even the most basic supplies were out of reach . The net result would seem to be a ratification for development economists ,such as Chussodvosky, who argue that such wage policies are posited on the assumption that there is an excess of demand and a privation of human capital when, in fact, global demand has long remained constant at around 15% . Instead, what these policies serve to do is simply to bring about a ‘race to the bottom’ within geographic regions with the net beneficiary being the consumer and service industries in the west. For it is they, rather than the producer, who gain greatest by being able to spend less on daily produce and more on additional goods a nd services . Secondly, by voluntarily reducing its economic sovereignty via the privatisation of key utilities, the government has lost control of not only a key financial resource but also, and more critically, of a means to provide sufficient provision to its populous. Critics have noted that these firms, have become unwilling to commit capital resources to country that they no longer view as profitable commentators such as Gilpin have noted (himself no anti-globalising theorist), the ethos behind privatisation is potentially sound – market forces, prices established via competition etc. – however in order for it to take place a sound, secure administrative framework needs to be in place, to be manned largely by middle class individuals. However, in an almost painful twist, this is the section of society that is most blighted by the reforms. The outcome has been a hotch-potch of privatisation which, ironically, has turned out to be of benefit to neither investor nor investee. The insistence that Argentina rapidly open up to allow global trade and finance to penetrate its domestic markets has, as Beiroch noted with regard to the 19th century , proven to be of far greater equity to developed countries than to Argentina itself. The IMF continued insistence that MNC’s and TNC’s are best equipped to identify where best profit lies within the Argentinean economy and that providing unrestricted access was essential to enabling them to do this. However, critics argue, this has served only to weaken Argentina’s internal economy in two ways. Firstly, by allowing MNC’s/TNC’s to pursue market manipulating policies (e.g. dumping) has enabled them to squeeze smaller domestic companies’ market share companies. Secondly, is the argument that these firms are motivated by nothing other than short term profit , to be strived for at the expense of any social or political concerns. Thirdly, by lowering trade barriers and tariffs vita l government revenues were lost, revenues that were desperately needed to pay back the loans owing to its creditors. Most crucially of all, is the charge that IMF US focussed myopia meant that they failed to appreciate that with the Peso pegged to the dollar Argentinean products would never not competitive when selling into Argentina’s main market, Europe . Finally, cutbacks on welfare meant that the Argentina’s citizens lost the vital safety net needed to prevent the fall into the poverty trap. It is a point on which Joseph Stiglitz, the ex world bank head, has been particularly stinging arguing that it is gross economic misjudgement to restrict spending when a country is heading into a recession Argentina’s response and its implications So, what has been learnt from the ending of this relationship. Firstly, Argentina would seem to have demonstrated that it is possible to take on the IMF and, if not bet them, then give them a proverbial bloody nose. The country exposed the fact that dealings with the IMF are symbiotic and that they need to maintain relationships with debtor countries, especially large ones, in order to maintain their public image as the key development lender. In the wider context however, it is hard to see many other countries taking this policy choice. Kirchner and Lavagna (the Finance minister who administered the debt repayment ‘haircut’) did so in a post 9-11 environment that allowed the country to trade off political support for deliberate oversight on the part of the US treasury . Similarly, whilst Argentina has been struggling to make debt payments, the strength of the soya market has enabled it to build up the reserves required to pay back the debt early. The other caveat is that whilst the IMF loan is to be squared off other loans will nee d to be sought and, as Fischer has noted, this is not always as easy as it sounds and the finance, when it does come, may well be on terms more prohibitive than those of the IMF . Secondly, the example of Argentina , some assert, demonstrated that the primacy of the citizen remains. The economic damage inflicted upon the country saw rapid transfers of political power and stability has only been restored with the induction of Kirchner to the role of President on a mandate of anti-IMF action . In particular, the rise of social groups representing the lower end of society – most notably the Piqueteros – offers, for some advocates, a vision of how democracy could be made to work in an increasingly segregated world. Thirdly, the scale of the IMF’s failure within South America and Sub-Saharan Africa would seem to be a searing indictment that the US economic model cannot, and should not, be produced wholesale around the globe. After all, this is a system that has been exposed as having heavy flaws of its own (Enron, Worldcom scandals), instinctively dismisses other successful economic models ,and that is now running at such heavy deficit spending levels that its own financial security are by no means clear . Lastly, are the practical challenges that Argentina’s payback will pose. The IMF, is meant to be self sustaining with its annual budget of around $1bn coming from interest payments made on loans. Argentina’s action came days after Brazil made the same commitment, and when considered alongside countries such as Thailand, who have built up large currency reserves in order to remove the need to approach the IMF, although unlikely the organisation itself may need to get a loan. In conclusion, the IMF’s role and subsequent withdrawal from Argentina has left both parties with an uncertain future. Argentina has now made a commitment to gaining finance on the open markets, opting away from IMF control yet opening itself up to potentially ever greater market swings as the IMF safety net is removed. For the IMF, it has started the 21st century with a tarnished reputation. The organisation has made a pledge that it is to operate in order to reduce global poverty; yet factors both internal (secrecy, market led bias) and external (notably the growing antipathy of its main backer ) have led to questions over the legitimacy and continuation of the institution , and the time for providing acceptable answers is getting less. Research Papers on The IMF and Argentina’s Future In A Global Economy - Political SciencePETSTEL analysis of IndiaDefinition of Export QuotasThe Effects of Illegal ImmigrationTwilight of the UAWAppeasement Policy Towards the Outbreak of World War 2Assess the importance of Nationalism 1815-1850 EuropeNever Been Kicked Out of a Place This NiceAnalysis of Ebay Expanding into AsiaRelationship between Media Coverage and Social andBringing Democracy to Africa

5 Steps to Determine Your LinkedIn Profile Focus by guest blogger Jill Schaefer

5 Steps to Determine Your LinkedIn Profile Focus by guest blogger Jill Schaefer You are a multi-faceted human being and yet you only get one LinkedIn profile (or two if one of them is in a second language). Perhaps you are unsure where to focus as a professional and thus how to present yourself in your profile. The question â€Å"Who am I?† is an important one for job seekers and professionals, and it’s not always easy to answer. You: The multi-talented All of us are good at MANY things; but the fact is you can’t be everything to everyone- especially as a job seeker. As Martin Yates, CPC, author of the famed Knock ‘em Dead series, elaborates in Knock ‘em Dead 2012: The Ultimate Job Search Guide, â€Å"People get hired based on their credentials not their potential†¦ Decide on the job that will be the easiest sell for you and the easiest buy for an employer.† In the almost two years that I have been writing LinkedIn summaries for The Essay Expert, I have encountered clients who attempt to be all things to all people. They want to highlight their experience in A, B, and C industries and their accomplishments at X, Y, and Z jobs, AND promote their small business- all within the space of 2,000 characters. Sound familiar? You may think this broad-ranging type of summary says, â€Å"I’m dynamic and versatile.† In reality, most readers interpret it as, â€Å"This person is confused, random, and indecisive.† 5 Step Plan Here’s how to convey focus and strength in your LinkedIn summary: Step 1: Pick one thing The first step to finding your LinkedIn focus is to zero in on the PRIMARY job that you’re after or the PRIMARY professional pursuit you want to come across loud and clear in your profile. How do you do that? Back to Martin Yates’ words of wisdom. â€Å"Based on the skills you possess today, what is your primary job target?† Step 2: Find job descriptions for your target job or profession. Identify keywords. Look up 3-5 job descriptions for your target job category. For example, if I am looking for a marketing or communication manager position, I would go to indeed.com, monster.com, or careerbuilder.com to find posted positions, such as Marketing Communications Officer or Marketing Services Manager, that employers are actively recruiting for. You don’t have to limit yourself to a certain geographic area for this exercise. The point is to learn what job title is most commonly used and what language employers use to describe the job’s requirements. What is the problem a person in that role must solve? What skills would an ideal candidate have? (Note: If your target job requires you to do things that you hate, go back to Step 1.) Copy and paste the contents of the job descriptions into an electronic file or print them out. Highlight mandatory skills from the job descriptions. What keywords- the words that LinkedIn recruiters and hiring managers would search on- keep popping up? Hint: â€Å"team player† is not a keyword phrase, â€Å"alliance management† is. Learn more about keywords in Brenda Bernstein’s Baffled by choosing keywords for your LinkedIn Profile HEADLINE post. Make a list of the most common keywords from the job descriptions. You might want to use Wordle.net to help out with this part. Step 3: Identify your accomplishments With your target job position in mind,   create a list of your top five relevant accomplishments. Organize each accomplishment into a Situation/Action/Results format: Briefly DESCRIBE THE SITUATION or problem. List the ACTIONS YOU TOOK to amend the situation. Describe the RESULTS YOU ACHIEVED. Use quantifiable statistics and metrics, if possible. Step 4: Evaluate how you match up Compare and contrast the similarities between the job descriptions and your accomplishments. How do you match up? If you do, great! If not, it’s time to re-evaluate whether you have matching experiences or successes in the areas that are important to an employer. Step 5: Be THAT person Make sure everything you say about yourself on your LinkedIn profile supports your ONE target position or singular professional objective. Don’t muddy the waters by including keywords from everything that you’ve ever done in your working life. Keep it focused. Remember if you decide today that you’re most qualified to be a genie and tomorrow you decide you’d rather be a zookeeper, you can change your LinkedIn profile accordingly. It’s a living document that reflects who you are as a professional right now. Once you’ve updated your LinkedIn profile, start monitoring the â€Å"Who’s viewed your profile?† section on the right side of your LinkedIn home page. How many times has your profile appeared in searches over the past few days? If your hits are in the single digits, change a few keywords, reassess, and repeat until your numbers go up. Feeling lost? The Essay Expert is here to help you find your professional self. We have helped many a client with multiple professional personalities benefit from a focused, successful LinkedIn summary. About Jill Schaefer: Jill is a professional copywriter and freelance writer who lives in Madison, Wisconsin. She specializes in environmental communications, connecting with clients, giving LinkedIn profiles a makeover, and producing compelling copy. View winning LinkedIn summaries Jill co-wrote for The Essay Experts clients: Shashi Dosaj | Marissa Keller Outten | Michelle Henry