From Argentina to Zimbabwe
Argentina's Eduardo Duhalde and Zimbabwe's Robert Mugabe both impoverish their people by destroying the rule of law, attacking free markets, and invalidating democracy.
by Jerome F. Winzig
At first glance, the troubles in Argentina and Zimbabwe appear quite dissimilar. While Argentina's president, Eduardo Duhalde, is the fifth in just over a month, Zimbabwe's president, Robert Mugabe, has been in office for 22 years. However, both countries are in the midst of political and economic crises brought on by governments that do not believe in democracy, the rule of law, or free markets. The executive branches in both countries seek to demonize their opponents and, when ruled against by the judiciary, have taken steps to either nullify or pack their own supreme courts.
The circumstances in both countries call for clear leadership by the United States in favor of democracy, the rule of law, and free markets. While such leadership is not all that radical, it is not likely. Instead, in both cases, U.S. inaction or hostile policy has the potential to make the problems worse.
Under Mr. Duhalde and his predecessors, the Argentine government has shattered an already-shaky economy by freezing bank deposits, devaluing the peso, and abrogating contracts that were denominated in dollars, requiring that they are to be repaid in devalued pesos. When the people rioted in the streets, Duhalde blamed the banks for the problem and his wife said she "could care less about the banks."
The Argentine government has also raised import tariffs and Carlos Ruckauf, the new Minister of Foreign Affairs, says his main goal is to strengthen the ties with Brazil and the protectionist policies of Mercosur, the Latin American customs union. Duhalde has espoused a governing position that is openly hostile to free markets, foreign investors, and capitalism.
At the same time, Duhalde wants the International Monetary Fund to provide Argentina with a $15-$20 billion in additional loans and aid. So far, it seems likely that the IMF, which concedes that it has failed badly in Argentina in recent years, is going to accommodate him; the U.S. Treasury department has yet to state its position on the matter. This would not only be a colossal waste of money but would also prop up a government whose policies are idiotic.
Mary Anastasia O'Grady, editor of the Wall Street Journal column, "The Americas," says "this would effectively sentence 38 million Argentines to prolonged hard labor. It's time for the United States to oppose such a bailout and point out that , while the political class in Argentina rails against the banking class, the IMF measure will save the necks of the foreign banks who poured good money after bad in Argentina.
In Zimbabwe, Mr. Mugabe, having reduced his nation's economy to shambles, impoverished his people, and set neighbor against neighbor, is nearing the end of a long, desperate attempt to stay in power, perhaps for the rest of his life. He has made criticism of the president a criminal offense. His vitriolic and violent campaign against white farmers has smashed the country's agriculture. He has disenfranchised the millions of Zimbabweans who are living abroad in an attempt to make enough money to survive.
If U.S. trade policies toward Africa were fairer, perhaps the U.S. stance in favor of democracy would be heard more clearly. Last week, a public radio program interviewed an American couple who were bemoaning the fact that their six-figure family income in the textile industry was threatened by African competition. To protect their income, Congress is enacting silly measures that require that dying and assembly of cloth must occur on American soil.
The events of last September should have taught us that we cannot afford foreign policy measures that impoverish people in other countries. Even though these measures claim to protect poor people, they often serve to accomplish the opposite. Debt forgiveness measures, for example, reward foreign bankers who connived with corrupt governments to make ill-conceived loans.
Instead, we should let those bankers pay the costs of their connivance and allow corrupt politicians fall from power. We should give the successor governments free and open access to world markets -- including our own -- so we can all benefit. For the astonishing fact about free markets, the rule of law, and democracy is that they make it possible for everyone's economies to grow and prosper.