II. DOMINATION BY DEBT: FINANCE CAPITAL IN ARGENTINA
Martel, Julian
One of foreign capital's major objectives in Argentina has been to gain control of its public sector, and more specifically its stateowned enterprises. The present military regime is...
...Instead, the profits have been used to pay the interest on the firms' debts to the foreign banks and to cover the costs of new contracts (mostly for replacement goods) with their transnational suppliers...
...Shortly after Peron's death in July 1974, a JulylAugust 1978 2930 NACLA Report series of economic and political problems sur- faced, progressively undermining Argentine society and its reformist regime's state capitalist project...
...Medium and small businesses have suffered as a result of the current credit restrictions, extremely high interest rates, and the overall fall in demand...
...Germany) also began to supply ENTEL.'1 The competitive battle which ensued between the two equipment giants was bitter...
...Energia Atomica Eulabank, British, Banco Nacion* Ger., Belg...
...22 NACLA Report.JulvlAuaust 1978 2 The foreign private banks did not yet consider the situation ripe for heavy involvement, so the Argentine government sought the support of foreign governmental agencies such as the U.S...
...Soon SEGBA's directors began taking additional loans from U.S...
...1977, which is higher than our figures...
...7. Ibid., pp...
...FINANCE CAPITAL IN ARGENTINA: DOMINATION BY DEBT 1...
...The banks, in their turn, forced the state to offer new public contracts to the transnational corporations, thus completing the cycle...
...The government also expropriated a large complex of firms owned by Deltec, the 28 NACLA ReportJulylAugust 1978 28 1974: Nationalization of petroleum marketing...
...3. For details see Luis Sommi, Los capitales alemanes en la JulylAugust 1978 3738 NACLA Report Argentina (Buenos Aires, 1945) and Los capitales yanquis en la Argentina (Buenos Aires, 1949...
...These were supposed to increase the number of phone lines nationally by 50...
...2) the growth of external loans to the government owned enterprises since 1960 and the increasing control of these firms by the foreign banks and transnationals...
...And in order to gain the IMF's and banks' approval for these relatively useless and burdensome credits, the military must continue to implement its present economic program whose harsh burdens have of course fallen hardest on Argentina's working people...
...69-83...
...Peron also promoted the establishment of a whole range of additional state enterprises...
...Consequently, real wages have drop- ped to their lowest levels in modern Argentine history...
...Thus, when the Argentine government proposed nationaliza- tion, the foreign owners quickly agreed...
...The economic program attained a certain degree of success in the years 1973-1974...
...Argentine National Board of Statistics, reproduced in Clarin, October 9, 1977...
...Mercado, August 19,1976...
...Many Argentines publicly criticized the contract, and two years later Frondizi's successor, Arturo Illia, rescinded the agreements...
...6 In other industries with substantial foreign investments, the situation is also bad: steel and textiles, for example, have each suffered a sales drop of over 60%.* The preoccupation of foreign capital with this deterioration was evident in early April at a meeting attended by the Junta's ministers and over a hundred leading executives from U.S., European and Japanese banks and corporations...
...OTHER INROADS Competition among the banks has not been limited to local branch banking...
...Now that the firm has been put back on its feet, the Junta is evidently considering its reprivatization...
...The total external debt of Argentina which stood at $150 million at mid1955, rose to $1 billion by early 1958...
...Also see comments in Business Week, November 21, 1977, p. 71...
...Minsburg, op...
...Although this was a political victory for the working class, in economic terms it was not a triumph...
...14-18...
...Until now, YPF had rarely sought foreign loans, intentionally financing most past expansion with internally generated funds...
...The wholesale unloading of these firms has reached such proportions that even right-wing nationalist groups have begun to protest...
...As one industry advertisement lamented: "the $200 million in insurance policies that INDER negotiated for the Argentine government in 1976 will be JulylAugust 1978 = _ 3132 NACLA Report handled in the future by foreign insurance companies for their own benefit...
...Discussion of ITT's role in Chile, for example, may be found in NACLA, "Secret Memos from ITT," NACLA Report, vol...
...4. For details see Marcos Kaplan, Petroleo, estado y empresas en Argentina (Caracas, 1972...
...When ITT's local sales dropped from 215 million pesos in 1974 to 137 million in 1975, ITT threatened the Peronist government with closure of a factory employing 4,000 workers...
...Data for 1966 and 1970 from Carlos Maria Vilas, La dominacion imperialista en la Argentina (Buenos Aires, 1974), pp...
...Still, the factor most responsible for the payments deficit was the rising foreign debt...
...the monopolies arising therefrom...
...BANADE EximBank and two Acindar S.A...
...Banco Central Argentine govt...
...Shortly after the military takeover, Swiss bankers arrived in Buenos Aires to discuss the "electrical situation" with the Generals...
...Local manufacturing industry developed rapidly, spurring the growth of an industrial bourgeoisie and a large urban proletariat...
...Politically the new government allowed greater latitude to the Left, as could be observed from the rapid growth of numerous left-wing parties of various ideological shades and from the multiplication of worker strikes and demonstrations...
...2. Mercado, August 19,1976 and August 10, 1977...
...and Europe have increasingly taken the lead...
...4 But these significant advances of the state enterprises were overshadowed by the fact that they also continued to rack up very large overall deficits...
...The military coup of 1966 saved the day for the World Bank and Italo...
...37-41...
...Since then they have continued to drop...
...In November, the company served notice to the Generals: Harold Geneen, then ITT's chief executive officer, publicly announced that ITT held $85 million in Argentine foreign bonds...
...In short, ENTEL, like SEGBA and other major Argentine state enterprises in steel, rails, shipping and gas, has had its growth stymied by the costs of its increasingly heavy debt, and distorted by its dependence on its allied foreign creditors and suppliers...
...This should be carefully analyzed to understand not only the current economic and political situation in Argentina, but also that of other Latin American countries such as Peru, Chile and Mexico, which are faced with increasing internal social contradictions resulting from the crisis of dependent capitalist development.' Why are the big banks so interested specifically in the public companies...
...Hanovers, Morgan Guaranty Hierro Patag6nico S.A...
...Gas del Estado Siam di Tella S.A...
...During the first few months after the coup, the banks adopted a wait and see attitude...
...134-36...
...World Bank BANADE Austrian banks Banco Central Consortium inter- Ferrocarriles national banks del Estado Banco Exterior Ferrocarriles de Espara del Estado World Bank, Lloyds BANADE & 36 private banks IDB Agua y Energia French banks Aqua y Energia European banks Argentine govt...
...The government also promised to decontrol prices, and suggested that it would try to freeze workers' wages...
...An indispensable aid in winning this contract was the collaboration of the powerful Deutsche Bank which agreed to distribute $25 million worth of Argentina's external bonds at the precise Siemens pays a house call...
...Recently, these companies have channeled substantial funds into new exploration and production ventures in such potentially rich carbon fuel regions as Tierra del Fuego and along Argentina's continental shelf...
...Gregorio Selser, El Onganicato: la lLamada revolucion Argentina, Vol...
...On the contrary, their functions have been and are complementary...
...bank EximBank IMF IDB IMF EximBank and Private U.S...
...The national railway workers who, before the coup, numbered 150,000 strong, provide a dramatic illustration of the working class predicament...
...But the resultant profits have not generally been reinvested in improving the equipment, efficiency and services of the public firms...
...Instead, the bankers retained the cash as guarantee for future payments due...
...BOLSA Review, March 1978, p.131...
...If the government did not respond favorably and soon, ITT might dump its bonds, thus destroying or diminishing Argentina's international credit at a particularly critical moment...
...To cover these deficits, the government began to issue more and more paper pesos, thereby fueling inflation...
...The outburst of popular activism evidenced in the large demonstrations and factory takeovers which occurred throughout 1973-74 provided the political support necessary for the implementation of some advanced reforms...
...Argentine govt...
...Buenos Aires, 1974), p. 149...
...Of the 150 largest companies in Argentina, the public firms' share of total sales increased from 36% in 1973 to 46% in 1975...
...58-69...
...banks Westinghouse Corp...
...5. Banco Central de la Republica Argentina, Memorias, 1940-1951...
...But a key factor for many was the need to pay extremely large sums for imported capital equipment and for the interest payments on their burdensome foreign debts...
...It invited new investments and proceeded to sell some of the public enterprises to private Argentine and foreign capitalists...
...Impoverishment, together with the repression of the workers, the physical liquidation of political activists, the suspension of trade union activity, and the freezing of wages at starvation levels, must all be understood in light of the Junta's attempt to preserve and complete Argentina's integration into international capitalism, subordinated to the dictates of the leading banks and transnationals...
...One element which has received little study is the growing foreign debt of specific state enterprises, and its implications for dependency and underdevelopment...
...JulylAugust 1978 . v 2122 NACLA Report The influence of both groups was seriously diminished by the government of Juan Domingo Peron, who took power after the elections of January 1946...
...But once the Junta's program received the IMF's "seal of approval" in September, the loans began to roll in.1" (See Table...
...banks Consortium West German banks Consortium French banks Consortium Japanese banks Consortium Dutch banks Consortium Scandin...
...Estimates of total workers fired from the public administration and state enterprises range from 100,000 to 200,000, including 40,000 on the railways alone.' 7 YPF's prices on gasoline and oil rose 220% in 1976 and over 170% more in 1977...
...Immediately after the coup ITT, in search of new contract, commenced negotiations with the military regime...
...Deutsche Bank and Argentine govt...
...And in Avellaneda, Moron, Berisso and many other towns, the situation was equally disastrous...
...A likely purchaser is Westinghouse, which holds most of Siam's patents...
...equipment Compensate for decline in export earnings Construct gas pipeline Refinance foreign debt Buy U.S...
...La Opinion, September 29,1977...
...As the deficit climbed, the government and its enterprises came to depend ever more heavily on the foreign banks for financial assistance...
...In practice, moreover, such institutions as the World Bank and IDB depend directly on the private banks...
...The high attrition rate is reflected in the 1977 bankruptcy totals, which amounted to 34,046 million pesos as opposed to 187 million in 1976...
...closely tied to General Electric...
...La Opinion, February 12...
...3 The implication was clear - ITT was disposed to use all its financial artillery to gain its goal...
...2 " A survey of the contracts arranged with SEGBA during the years 1966-76 indicates that the principal benefactors have been G.E., Westinghouse, Hitachi and a few leading European suppliers...
...7 Despite considerable success during the years 1946-50, the Peronist economic program gradually ran out of steam...
...For a recent look at Siemens, Europe's third largest worldwide employer, see George Williamson, "Siemens Starts Second but Finishes First," Fortune, April 10, 1978, pp...
...The multilaterals have also provided a good screen behind which private finance capital could hide, defusing potential political conflicts in the more delicate loan negotiations...
...Among these were the steel firm, Sociedad Mixta Siderurgica Argentina (SOMISA), initiated in 1947...
...There is, however, no basic contradiction between the role of the multilaterals and the banks...
...Paribas and Societe Generale (France), Deutsche and Dresdner (West Germany), Banco Central and Banco Santander (Spain), and Algemene (Netherlands...
...General Motors, among others, ceased operations entirely in February and March, and has permanently fired 5% of its workforce...
...Between 1973 and 1975 the government renationalized seven major commercial banks bought by foreign financial interests during the late 60's...
...See Mercado, June 15, 1978, p. 2 1 and Euromoney, November 1975, p.106...
...A third is the distortion of the state firms' development resulting from their dependence on foreign supplies and technology...
...The continued growth of inflation-over 170% in 1977 and expected to reach 200% in 1978 - easily outpaces such nominal wage increases...
...Among other companies for sale is a major manufacturer of machinery and appliances, Siam di Tella...
...Indeed, in many cases, these have all deteriorated...
...AID - The Carrot and the Stick" in NACLA New Chile (New York, 1973), pp...
...Its first foray in Argentina occurred in 1929 when, with the support of the London-based Morgan-Grenfell Bank, it bought Union Telefonica (U.K...
...Amnesty International, Informe de una mision de la amnistia internacional a la Republica Argentina 6-15 noviembre, 1976, (Barcelona, 1977...
...Buenos Aires American Chamber of Commerce, Comments on Argentine Trade, December 1946, p. 95...
...La Opinion, December 29, 1977...
...But it has also been the consequence of the growing recognition on the part of the banks of the potential profits to be realized in the third world...
...Finally, major loan negotiations commenced with both the multilateral and private banks from the U.S., Canada, Europe and Japan, with the object of rolling over a substantial part of the foreign debt...
...But with the contracts in their pockets the two companies proceeded instead to "rip off" ENTEL by grossly overpricing its equipment purchases: locally produced items were overpriced 123% by ITT and 97% by Siemens, and imported equipment was overpriced 22% by both...
...The state enterprises rapidly increased their relative power during the period 1973-75...
...26 NACLA ReportJulylAugust 1978 27 moment the atomic energy deal was being negotiated...
...1977, but provides no additional details...
...Public firms such as the national telephone monopoly (Empresa Nacional de Telefonos-ENTEL), came to depend almost exclusively on the telecommunications equipment and technical assistance of major transnationals such as ITT and Siemens...
...second, that all public companies raise their rates...
...Moreover, the Bank asked the directors of SEGBA to fly to Washington and make a public declaration approving the Bank's strategy, which they did, illustrating clearly who they saw as "boss...
...The Minister of Economy, Jose Gelbard, initiated a series of nationalizations and simultaneously institutionalized policies designed to fortify and expand the role of domestic private and public firms...
...6. For details on this nationalization and state enterprise program, see J.C...
...banks Finance imports by small/ medium firms Buy German equipment for plant Finance bank expansion overseas Finance bridge construction Finance expansion Import General Motors equipment Cover short term debt of YPF General external bonds General external bonds Renewal of stand-by loan Credit for import payments Refinance foreign debt Finance import of locomotives from Belg...
...Agreements were also reached with the leading multilateral banks: Argentina became a member of both the IMF and the World Bank in 1956, and joined the Interamerican Development Bank (IDB) when it was established in 1961.10 From Peron's overthrow until 1966, most of the public sector's foreign financing was provided by these bilateral and multilateral institutions...
...Until recently, however, neither the transnationals nor the banks have been particularly interested in actually taking over the major public firms...
...Likewise, SEGBA's electric rates, as well as telephone and transport charges, have skyrocketed...
...A total of 19 local banks were sold to foreign interests between 1967 and 1969, allowing the latter to extend their branch networks outside of metropolitan Buenos Aires and into other cities.'" In 1966, the foreign banks held 31.6% of the total commercial deposits in Argentine private banks...
...1978, p. 71...
...banks Japanese banks Argentine govt...
...equipment Finance import Japanese equipment Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Refinance foreign debt Finance road construction Buy Boeing 747 and 707 AlyluJ ugust 1978 333' I4ACLA Report 4-77 6.1 Eulabank 4-77 25.0 5-77 50.0 5-77 32.0 6-77 100.0 6-77 21.0 6-77 50.0 8-77 50.0 8-77 115.0 8-77 20.0 9-77 250.0 9-77 80.0 9.77 46.0 9-77 200.0 10-77 100.0 10-77 10.0 11-77 19.0 11-77 150.0 12-77 100.0 12-77 83.0 1-78 45.0 1-78 10.0 1-78 53.9 2-78 105.0 2-78 69.0 2-78 105.0 2-78 19.3 Dalmine Siderca Finance import of equipment S.A...
...Review of the River Plate, December 14, 1928...
...Together, the bankers offered over one billion dollars in credits over the next two years...
...29...
...For a complete list of the World Bank loans see Jose Garcia Vizcaino, La Deuda Publica Naciona4 (Buenos Aires, 1972), appendix...
...Esteban, Imperialismo y desarrollo economico (Buenos Aires, 1972), pp...
...banks IMF Argentine govt...
...In the past, a major attraction of the contract arrangement was that the state enterprises often received the financial guarantee and support of the government regardless of their overall profitability...
...Thus despite the government's monopoly over electric power generation and distribution, Argentine-owned electric manufacturing firms have fallen by the wayside...
...This has been due in part to the fact that the multilaterals simply have not had sufficient funds to meet the growing demands for foreign loans...
...IV, Nos...
...In September 1976, the IMF granted Argentina refinancing of $290 million...
...In return for the 1958 IMF loan, President Arturo Frondizi's government promised to carry out a "stabilization" plan which would reduce the number of state employees by 15%, slow down the majority of the publicly-financed development projects, and increase prices on all public services, including railways, electricity and petroleum...
...The foreign debt continued to grow rapidly throughout the Frondizi administration, 195862, and by the end of 1963 had risen to over $3 billion...
...But they did assert that the military Junta would not allow any disorders...
...Clarin, April 13, 1978...
...in C6rdoba 4-78 8.0 U.S...
...Martinez de Hoz accepted these demands with a vengeance...
...In the latter year, six of the ten leading companies (ranked by sales) were public enterprises: YPF, ENTEL, SOMISA, SEGBA, Gas del Estado, and Ferrocarriles (the national railroad system), while the remaining four were transnationals: Fiat, Ford, Exxon, and Renault...
...s Many medium and small-sized Argentine businesses have also begun to attack the Junta for its anti-national economic policies...
...Bahamas-based conglomerate, including its Swift Co...
...Mercado, August 19, 1976...
...The armed forces and police stepped up repression against workers and left-wing political groups, preparing the way for the March 1976 coup...
...La Opinion, November 11, 1976...
...Among the worst losers were Siemens and ITT, whose dramatic drops in sales had resulted in large losses...
...In practice, however, the effect was to increase both the commercial and financial dependency of Argentina...
...These firms are rapidly becoming the pawns of the globe's largest private banks and transnationals...
...In addition, an attack was launched on the powerful oil companies Exxon and Shell...
...Recent experience certainly does show that the Argentine armed forces are prepared to carry out renewed repression of the working class...
...Among the development bank's whollyowned firms placed at auction were several metalurgical companies bought by Renault (France), Massey Fergusson (Canada) and Philips (Netherlands).49 The government also resold the Swift meatpacking plant in La Plata, receiving only $8 million down and $12 million in installments due over six years for a property whose annual revenues exceed $50 million...
...Agricultural exports declined in the 1951-55 period, first as a result of severe droughts and subsequently because of the drop of world prices of wheat, corn and other grains...
...EximBank concentrated on helping to fund the state steel firm, SOMISA, as well as various projects of Fabricaciones Militares and other state firms...
...banks and Zarate-Brazo 1 Canadian bank Largo complex World Bank and SEGBA private banks EximBank Ferrocarriles del Estado Consortium U.S., YPF Canada, Jap...
...A massive wave of strikes broke out in November 1977, which halted virtually all the lines...
...Early on, it was decided that BANADE (the government's development bank) should sell its interests in some 200 manufacturing and service companies.' 4 As soon as this decision was made public, the stock prices of most of these firms plummeted on the Buenos Aires exchange...
...factory in La Plata, the largest and most complex meatpacking plant in Latin America...
...The purchaser, Carnes Argentina, is closely linked to foreign financial institutions...
...In the town of Nueve de Julio, the agricultural machinery factories were closing...
...But having suffered losses in market share and financial reverses over the years, it was transformed into a public firm and subsidized by the state during the Peronist wave of nationalizations in 1975...
...These social measures were complemented by a series of economic ones...
...Since the coup, the government has been systematically firing workers on all the railways, urban and rural, ostensibly to reduce the company's costs and deficits...
...17 Another area of intense competition continues to be that of loans to state enterprises...
...In addition, an agreement was reached with Cuba to export $200 million worth of Argentine manufactures to that country...
...8 ' Siam, once privately owned, had ranked in the early 60's as Argentina's largest non-foreign machinery and appliance firm...
...Hector Melo and Israel Yost, "Funding the Empire" Parts I and II, NACLA Newsletter, April and May-June, 1970...
...Ibid, February 3, 1977...
...They offered new loans in exchange for higher rates for Italo...
...See Naum Minsburg, Inversiones extranjeras y dependencia, enfoque historico y actual (Buenos Aires, 1975), pp...
...THE PERONIST REGIME AND STATE CAPITALISM Although the experience of the last 20 years demonstrates that the Argentine public sector has become progressively subservient to international capital, certain periods have provided less favorable conditions for the expansion of JulylAugust 1978 2728 NACLA Report foreign interests than others...
...In Rosario, the wheat capital of the nation, the tractor factories owned by John Deere and Massey Fergusson shut down during the first months of 1978...
...financial titans conducting this general offensive were Morgan Guaranty, Chase Manhattan, Citicorp, First Boston Corp., Continental Illinois and BankAmerica...
...BANADE BANADE Banco Central Banco Central Banco Central Banco Central Banco Central Banco Central Banco Central Banco Central Banco Central Banco Central BANADE Aerolineas Purchase equipment from Mitsui Co., Japan Buy U.S...
...These two firms were prohibited from participating in the retail distribution of petroleum, which became a virtual monopoly of the state-owned company, YPF...
...and Gregorio Selser, Una empresa multinacionaL" la ITT en los Estados Unidos y en Chile, (Buenos Aires, 1974...
...But first we need to review the contradictions which emerged during the recent Peronist experiment with state capitalism...
...In this sense it is symptomatic that even the managers of international finance capital have begun to suspect that the days remaining for the exploitative economic and repressive political programs of Argentina's military government are numbered...
...There are numerous indications that the total number of general government, public enterprise, government guaranteed loans to both public and private companies and purely private company loans greatly exceeds the number contained here...
...But these plans seriously underestimated the sector's degree of foreign 1973: Popular demonstration on Peron's return...
...The IAPI used foreign exchange earnings from agricultural exports to pay for imports such as machinery and equipment necessary to carry on industrialization...
...The economic program initiated by Alfredo Martinez de Hoz was designed to guarantee high profits for the large, private companies, to attract foreign investment and to placate the big international banks...
...Note, however, that none of these loans was ever channelled into Argentina...
...Some of them were undoubtedly mismanaged, and others engaged in overly ambitious expansion plans...
...La Opinion, April 4, 1978...
...Today, Dr...
...IDB Consortium Spanish banks IDB IDB EximBank Japanese EximBank Consortium U.S...
...Export-Import Bank (EximBank) and the U.S...
...subRepression of a mass rally protesting government's wage policy...
...Mercado, August 8, 1974 and August 19, 1976...
...These refinancing loans, which carried short maturities and stiff interest charges, totaled approximately $1 billion, or about 70% of the total foreign loans received by Argentina in the year following the military coup...
...Business Latin America, April 24, 1969, pp...
...0 This elite asked the Ministers how long they believed working people could manage on salaries as low as $50 a month...
...The World Bank retaliated by threatening to cut off future financial aid to Argentina...
...In order to pay them off, however, the government found it necessary to borrow $115 million from a consortium of Swiss banks...
...8 (October, 1973), p. 6-12...
...Ibid, January 6 and February 21, 1978...
...Investment was heavily concentrated at first in petroleum and automobiles...
...and European institutions for financial assistance...
...On the one hand, the banks provide them with essential information on future 24 NACLA ReportJulylAugust 1978 government expansion plans and the best way to present their bids...
...Of these, perhaps the most revealing example is ENTEL, the national telephone company, which found itself there courtesy of the manipulations of ITT...
...This would prove a costly mistake...
...INTERNAL CONTRADICTIONS INTENSIFY While the Argentine working class has undoubtedly suffered most severely from the present economic program, others have also been adversely affected...
...8 Thus the Peronist government gradually lost the support of the industrial bourgeoisie, which banded together with the reactionary 1952: President Juan Peron...
...these included loans for the construction of the Salto Grande hydroelectric complex and joint venture accords for the development of fishing and petrochemicals...
...ITT tended to get a larger share of the ENTEL contracts, but Siemens was able to equal or top its rival in total sales because it obtained contracts with other public enterprises...
...By 1973, however, Siemens was 59th, while ITT still ranked only 73rd.s 2 Siemens' rapid rise was caused "at least in part by the fact that the company snagged the contract for Latin America's first atomic energy installation in Argentina...
...In this article we analyze four aspects of the relations between international capital and the Argentine state: 1) the historical development of the Argentine public sector since 1945...
...equipment Cover outstanding debt with Westinghouse Finance Argentine exports Purchase railway and shipping equipment in Spain Expand paper plant Finance construction of grain silos Finance import U.S...
...This subsidiary became ENTEL's almost exclusive supplier of telephone equipment until the late 50's, when its transnational competitor, Siemens Co...
...Furthermore, the government will authorize production concessions for those companies that strike oil...
...Although some of these loans have been employed productively, the largest ones were used simply to roll over existing debts...
...But this could not be implemented unless the grip of the foreign banks and companies was broken...
...the military-industrial conglomerate Fabricaciones Militares...
...The government proceeded to return the banks nationalized in 1974 to their former owners...
...Switz...
...The agencies justified this loan expansion on the need to modernize the nation's basic economic infrastructure...
...THE JUNTA'S ECONOMIC POLICIES The military Junta took power on March 24, 1976 and immediately attacked all popular and left-wing forces...
...The fact that the majority of these workers were employees of state enterprises was not a mere coincidence...
...For details on the sale of additional state firms see La Opinion, August 8 and 16, 1977, January 9, 1978 and February 15, 1978...
...During 1958-59, the Frondizi government authorized the concession of some 28 contracts with such giants as Shell, Exxon, Standard Oil of California and Texaco, for the exploration, drilling and exploitation of gas and oil reserves...
...Ibid 68...
...162-63, and data for 1976 from Mercado, April 29, 1976...
...But the Junta has decided to dismantle INDER...
...6 - 1 6 . 47...
...I, Selected Works (Moscow, 1970), p. 7 3 6 . 40...
...The heightened collaboration between the multilateral and foreign private banks in promoting the immediate profitability of the latter's operations in the third world (see the article on Peru in this issue) has further reduced the development options of Argentina's public enterprises...
...18601, which gave foreign commercial and investment banks the go-ahead to purchase domestic banks...
...Talleres Guillermina S.A...
...Business Latin America, June 1, 1977...
...large landowners in opposition to its "populist" regime...
...More serious than SEGBA's dependence on foreign supplies and technology is an already incapacitating and still growing foreign debt...
...At the same time, Fiat, Ford, General Motors, Chrysler and several other corporations set up auto plants...
...Particularly significant was the expansion of the transnational corporations into the fastestgrowing Argentine industries...
...Agency for International Development (AID...
...In fact, during the years 194751, Argentina became a net lender of funds to such countries as France, Spain and Italy.' It also nationalized most of the largest foreign firms, including the railroads, port, gas and telephone companies...
...They insisted, first, that the number of public employees be drastically reduced...
...For a history of the Argentine electric power industry up to this point, see Jorge del Rio, Politica Argentina y los monopolios electricos (Buenos Aires, 1958...
...Alto Parana S.A...
...The report states their pessimistic conclusions, and includes stark figures for practically every town and city in Buenos Aires province - by far the nation's largest, richest and most heavily populated region...
...Ultimately their loans would serve to consolidate the process of import substitution...
...and Pirelli (Italy).'" WORLD BANK SUPERVISION Early in 1962 the Frondizi government added another $95 million to SEGBA's already heavy debt burden, this time with a loan from the World Bank...
...Of the ten largest companies in Argentina (ranked by sales), six are government-owned and four subsidiaries of transnational corporations.' The government owns the largest petroleum company, the biggest steel mill, the only aluminum plant, the majority of electric and gas utilities, the national telephone monopoly, the largest sugar refining plant, the principal shipping, railway and airline firms, and much more...
...Peligros de una political de estabilizacion al modo de F.M.I.," Realidad Economica (Buenos Aires, July 1975), pp...
...and European public agencies and private banks...
...One of the keys to this strategy was the re-strengthening of the public sector, especially the state enterprises...
...Argentina's public employees, whose earnings average less than $70 a month, are among the lowest paid in the country...
...169-177 and recent estimates by Fundacion de Investigaciones Economicas, (FIEL, Buenos Aires...
...VII, no...
...Both public and private firms became increasingly burdened with foreign debts...
...The Peronist victory in the national elections of March 1973 represented a major setback for both the military, which had ruled since 1966, and for foreign capital in general...
...THE BANKS TAKE THE OFFENSIVE Up to the mid-60's, the bulk of foreign loans to such semi-industrialized nations as Argentina, Mexico or Brazil had been supplied by public lending agencies...
...In return, ITT was paid $95 million for its installations, and received a service contract giving it a virtual monopoly over ENTEL's future equipment and technology needs...
...3 6 In was only in 1974, as a result of a Peronistinspired Congressional investigation, that all this became publicly known...
...Jorge Sabato, "Que hacer con la Italo...
...La Nacion, August 1, 1977...
...RETURN TO THE DEBT TRAP The 1955 overthrow and exile of Peron resulted in a dramatic reversal of many of his nationalist economic projects...
...the telephone utility in metropolitan Buenos Aires...
...financial dependence...
...184, OctoberDecember, 1971...
...stayed off the job...
...By the end of 1975, the firm's foreign debt ran over $700 million, of which 70% was owed to the World Bank, 10% to First National City Bank, and the balance to other foreign interests...
...0 Moreover, ITT used its cash receipts from the deal to set up a large local factory called Standard Electric S.A...
...For a complete listing of external bonds issued by the Argentine government between 1961 and 1971 see Organizacion Techint, Boletin Informativo No...
...Mercado, August 8, 1974, pp...
...This critical turn of events is reflected in a report issued by the Economic Federation of Buenos Aires, whose members - mostly local manufacturers and merchants - met in late November 1977, to discuss the overall economic picture...
...In Buenos Aires and Cordoba, the transnational auto plants reduced or suspended production...
...Among them were employees of the Buenos Aires subways, the public electric companies, SEGBA, Agua y Energia, YPF and the major ports...
...When these multilateral institutions want to expand their working capital they are obliged to sell bonds on the international capital markets, and it is precisely the transnational banks that buy up most of these bonds.'" 23 JulylAugust 1978 424 NACLA Report One of the key functions of the multilateral agencies during the period 1955-65 was to create the appropriate preconditions for an increase of private foreign investment in Argentina as in the rest of Latin America...
...and Vision, March 10, 1978, pp.616...
...Simultaneously the growing working class militancy sharpened the class struggle and threw the traditional elites into a panic...
...112-113...
...European investments advanced at a slightly slower pace but also made significant inroads in such key areas as autos, food and chemicals...
...The founder and long-time chair of Deutsche Bank (est...
...direct investment in Argentina grew from $350 million in 1955 to $800 million in 1962, reaching $1.5 billion by 1968 and an estimated $2.2 billion by the end of 1976...
...Fred Goff, "U.S...
...other Ger...
...america," America Latina (Madrid, February 1977), pp...
...The nationally-owned Argentine electric firms got only the crumbs 2526 NACLA Report and they protested loudly...
...cit., p. 146...
...banks 7 U.S...
...The credit was granted under extremely severe conditions: the Bank demanded authorization to name the executive vice-president of the companey, to supervise all of SEGBA's supplies and contracts, and to substantially raise electric rates...
...Our sources for this table include the Memorias of the Banco Central de la RepLblica Argentina, annual reports of the IDB and the World Bank...
...ElDia (La Plata...
...Subsequently U.S...
...About the author: Julian Martel is an historian and long-time student of Argentine political economy recently forced to leave the country because of the continuing political repression...
...Yet the strikes continued and broadened as tens of thousands of workers in other industries also 32 NACLA ReportFOREIGN LOANS TO ARGENTINA AND ARGENTINE FIRMS SINCE THE MILITARY COUP OF MARCH 1976 Date Amount Lender(s) Recipient Purpose (u$s millions) 3-76 $ 3.5 3-76 4-76 6-76 9-76 9-76 11-76 11-76 1-77 2-77 2-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 3-77 4-77 4-77 1.8 120.0 87.0 296.0 15.3 2.8 8.0 290.0 51.0 60.0 20.0 15.0 500.0 90.0 30.0 40.0 20.0 10.5 60.0 35.0 18.0 65.0 105.0 50.0 Private U.S...
...Thousands were arrested, tortured and assassinated...
...BRANCHING OUT Inevitably, the private banks followed their transnational clients abroad, and rapidly extended their network of foreign branches...
...La Opinion, February 22, 1978...
...In this respect, the following brief case studies illustrate certain fundamental aspects of the increasing domination of the Argentine state and political economy by foreign capital since the late 1950's...
...Unintimidated, the government counterthreatened to nationalize both ITT's and Siemens' operations...
...Shortly thereafter the government rescinded the contracts with both transnationals and ENTEL began contracting with other companies...
...reporters and oil industry analysts that Argentina desired a new role for foreign capital not only in oil and gas, but in petrochemicals as well...
...statement of A. Ortiz Mena, President of the IDB, BOLSA Review, August 1971, p. 446...
...Apart from the complex political struggles that tore apart the Peronist movement, the worsening of the external position of the economy, both in trade and finance, aLso contributed to the deterioration of the overall situation...
...For a listing of the banks involved see Oscar Alende, Los que mueven las palancas (Buenos Aires, 1973), pp...
...the coalescence of the banks with industry...
...When they hit rock bottom, national and foreign speculators began buying and so "relieved" the government of its holdings...
...The loans were not used primarily to build up heavy industry, but rather to pay for the imports of expensive capital goods for existing consumer goods producers, tying them as well to technological contracts with the transnationals...
...Jaime Fuchs, La penetracion de los trusts yanquis en la Argentina, (Buenos Aires, 1959), pp...
...Economically, the government promoted a series of nationalist and populist reforms within a capitalist framework, much as had been done during the previous Peronist administrations...
...6 7 EVEN TRANSNATIONALS WHIPSAWED Numerous transnationals with Argentine subsidiaries are also feeling the crunch, particularly in the agricultural machinery and motor vehicle industries...
...4 (April 1972) and "Chile: The Story Behind the Coup," NACLA Report, vol...
...MORE FOREIGN LOANS Since mid-1976 nearly every important state firm has negotiated new loans with the foreign banks...
...1978...
...La Opinion, November 1,2,8,11, 1977...
...P. von Siemens sits on the bank's Board of Directors...
...1870), e.g., was a Siemens' family member.and close relations between the bank and Siemens - still family controlled - continue...
...9596...
...POVERTY AND PAUPERISM Even official statistics demonstrate that in just the first year after the coup, real wages declined by over 50...
...In contrast, 1975 was marked by a serious deficit on trade of $985 million which, accompanied by a massive capital flight, contributed to a total payments shortfall of $285 million...
...45-46...
...Paramilitary groups kidnapped and perhaps killed thous- ands more, and their whereabouts remain unknown.44 The Generals declared all trade union activity and strikes illegal, and froze workers' wages while allowing prices to escalate...
...In Quilmes, a major industrial center, sales were down 55...
...For background information on the significance of the Peronist triumph in 1973 see NACLA, Argentina: In the Hour of the Furnaces (1975...
...Ferns, Gran Bretana y la Argentina en el siglo XIX...
...45-59...
...At the same time, the Minister of Economy sought new and different sources of capital equipment and financial assistance...
...Similarly, BOLSA Review of December, 1977 claims foreign banks had provided $600 million in loans to Argentine private companies, during the period Jan.-Dec...
...For information on contracts see monthly reports in BOLSA Review, as well as more scattered data in Business Latin America, Mercado and other financial periodicals...
...Thus, although the accords were a shot in the arm for the Junta, which could now breathe a little easier with respect to the economy's critical external situation, they increased, not decreased, the nation's foreign debt...
...In 1974, the government signed various trade and financial agreements with the USSR, Poland, Czechoslavakia and Hungary...
...The IDB provided credits for the government banks, the state-owned water and electric utility, Agua y Energia, and numerous agricultural development projects...
...Argentine govt...
...from Europe Banco Ambrosiano Fiat Concord S.A...
...In 1967, the Argentine Finance Minister, Adalbert Krieger Vasena, further cleared the path for the denationalization of the financial sector by promulgating Law No...
...For an analysis of the kinds of leverage exerted historically by foreign-lending institutions see, e.g., Teresa Hayter, Aid as Imperialism, (London, 1971...
...4 6 - 7 4 . 9. J.C...
...3) the present policies of Martinez de Hoz with respect to the state companies...
...VI, no...
...Business Latin America, July 9, 1970, p. 218...
...and European transnationals moved into other rapidly expanding branches, especially pharmaceuticals, chemicals and plastics...
...In Coronel Suerez, economic activity had declined 40-80% across the board...
...La Opinion, August 16, 1977...
...4 These loans were used to pay for electrical equipment supplied by leading transnational corporations...
...Under the Frondizi government (1958-62), most of SEGBA's loans came either from EximBank or directly from major European manufacturers of electrical equipment, including Vickers (U.K...
...The reasons are complex, but one of the key factors is their size and overall weight within the economy...
...Until 1976, for example, locally-owned insurance firms did much of their business through the official insurance institute (INDER) which guaranteed them most of the government's insurance business...
...Cabildo, (Buenos Aires), November 1977...
...This included commercial loans and the so-called "stabilization credits" of 1957 and 1958, consisting of two standby loans of $75 million from the IMF and an additional $375 million provided by U.S...
...This seriously diminished the financing capacity of IAPI, and made it impossible to overcome a serious bottleneck: the light consumer industries had grown more rapidly than heavy industry, and thus became more and more dependent on the import of expensive capital goods which had to be paid for with increasingly scarce foreign exchange...
...Since that time, the powerful private banks of the U.S...
...The government finally allowed a 34-43% wage increase for the railway workers, and similar increases for the other strikers...
...The state firms chosen for study are SEGBA, the principal electric utility, and ENTEL, the telephone company...
...Soon new World Bank agreements were signed: one in 1968 for $55 million, another in 1969 for $60 million, and a third in 1971 for $100 million...
...Another is the increasing collaboration between the multilateral lending agencies and the private transnational banks...
...THE SALE OF STATE ENTERPRISES Finally, conforming to the bankers' wishes, the Junta has been selling all those state firms of interest to private capital, including large numbers of entities involved in manufacturing, mining and petroleum...
...But it is also clear that the internal contradictions of the Argentine bourgeoisie have reached a critical stage...
...Business Latin America, June 1, 1977, p. 1 7 6 and Vision, March 10, 1978, pp...
...JulylAugust 1978 31 sequently, the private banks concluded similar agreements...
...4) the impact of these policies on the working classes of Argentina...
...Sixty years ago, finance capital was defined as "the bank capital of a few very big monopolist banks, merged with the capital of the monopolist association of industrialists.'" Currently, it appears to be assuming a newer form consistent with its history as "the concentraton of production...
...205-07...
...Without the support of the IAPI and other public financial sources, the state enterprises were forced to negotiate with leading U.S...
...THE GROWTH OF THE PUBLIC SECTOR In order to understand the importance of the state enterprises within Argentina, and therefore to explain their attraction to foreign interests, a brief historical review is essential...
...Bigger profits through a lower wage bill can help these companies pay back their debts to the foreign bankers...
...Argentine Ministry of Economy, Economic Information on Argentina (Buenos Aires, January 1977), pp.3-11...
...The ultra-right magazine Cabildo, for example, denounced the sale of CONASA, the country's largest sugar firm, arguing that the government had just invested $35 million in new milling equipment and that there was no justification for selling it to private capital, presumably foreign...
...Esteban, Valor industrial .y enajenacion de DINIE (Buenos Aires, 1959...
...These included the ratification of progressive social legislation, the strengthening of the trade unions, the reform of the universities and the expansion of public health services...
...The present military regime is offering the international bankers and industrialists the opportunity to accomplish it...
...These changes created favorable conditions for the implementation of a self-sufficient "nationalist" development program...
...1 By the late 50's, much of the infrastructure of these companies had become outmoded and profits were dropping...
...DENATIONALIZING PETROLEUM The most significant thrust of the denationation program is found in petroleum...
...0 Today, this coalescence occurs on a world scale and includes the absorption of third world state enterprises among its sources of monopoly power...
...private bank Agua y Energia Finance expansion 'Banco Nacion: Banco de la Nacion Argentina, an Argentine govt commercial banking and savings institution heavily involved in agriculture "IFC: International Finance Corporation, a branch of the World Bank...
...The government was forced to focus more attention on internal economic development, particularly through import substitution programs...
...The European banks which own commercial bank subsidiaries in Argentina include Lloyds (U.K...
...To win these contracts, the transnationals enlist their bankers' support...
...Gas del Estado Argentine govt...
...In fact, the oil industry has become the single most important source of foreign investment in Argentina, committing $344 million or 86% of total new foreign investment for the year ending March 1978.67 In exchange for the concessions the transnational banks have provided YPF with a $250 million loan to cover its short-term debts, until it can arrange long-term financing...
...Problemas de Economia, June 1976, pp.6-10...
...This meeting's participants tended to JulylAugust 1978 3536 NACLA Report criticize the government for fostering the recession, and noted that those benefiting most from the crisis are the banks, which charge exhorbitant interest rates, and the foreign companies, which are "able to buy national companies for virtually nothing...
...Carlos Vilas, La dominacion imperialista en la Argentina...
...Lenin, "Imperialism, the Highest Stage of Capitalism: A Popular Outline," Vol...
...Ibid, p. 704...
...Demand has dropped, of course, because the working population does not have enough income to buy more than life's barest essentials...
...Endeudamiento y crisis del capitalismo en Latino...
...Similarly, when it was known in 1969 that ENTEL planned to offer large new supply contracts for its five-year expansion program, the banks which became most heavily involved in issuing Argentina's external bonds were the Deutsche Bank and Morgan Guaranty...
...in 1970 this figure rose to 40.5%, and by 1976 to approximately 58%.16 Among the U.S...
...Junta Nacional de Granos Argentine govt...
...131, 133...
...With the outcome never really in doubt, on February 2, 1977, the government announced that ENTEL would embark on another ambitious expansion program, and immediately offered ITT $72 million in supply contracts, as well as guarantees of future deals...
...BOLSA Review, Feb...
...Belgium) and American Foreign Power Co...
...IDB World Bank German banks IDB Celulosa Puerto Piray S.A...
...5, 1977, foreign banks provided the government development bank, BANADE, with over $800 million in loans in the period Jan.-Sept...
...banks Consortium British banks Consortium Spanish banks Consortium Belgian banks Consortium Canadian banks World Bank Lloyds Bank, Manuf...
...The military also ended YPF's monopoly over retail oil and gas distribution, handing back control of over 1,500 gas stations throughout the country to Exxon and Shell.46 Discussion soon began with ITT and others on compensation for their losses under the Peronist government...
...Moreover, he explained that YPF would open up a large number of zones where it had already carried on exploration and drilling operations to foreign exploitation...
...The relations between Morgan and ITT have always been friendly, and Siemens and the Deutsche Bank are interlocked at the highest levels...
...In 1969, ITT ranked 74th in total sales among the largest companies in Argentina while Siemens placed 76th...
...In this demand they were joined by the World Bank, which also committed itself to support an expansion plan for SEGBA...
...Rippy, British Investment in Latin America 1822-1949 (Minneapolis, 1959...
...Since 1966, the foreign banks have also become heavily involved in supplying medium and long-term credits to public and private companies as well as in underwriting Argentina's external bonds...
...SEGBA, Memoria Anual, 1975...
...This will become even clearer when we consider below the "privatization" of Argentina's most profitable public firms under the current military Junta...
...3 One outcome of the banks' influence was the award of contracts worth nearly $250 million to both ITT and Siemens...
...The World Bank, for example, specialized in loans for the public railway system of Argentina, as well as for the major public electric utility (Servicios Electricos del Gran Buenos Aires - SEGBA...
...II, (Buenos Aires, 1973), pp...
...Import equipment from Spain Cover import payments Finance water development projects Finance import of equipment Help finance hydroelectric project Finance paper plant expansion Finance silo construction program General external bonds Expand ethylene products plants Expand privately owned steel plant U NACLA Report3-78 10.0 IFC** Privately owned Finance plant expansion cement co...
...Realidad Economica (Buenos Aires, September-October 1974), p:' 104...
...These firms are key clients for the transnational corporations in that successful bids for their long-term supply contracts often secure stable long-run profits through the monopolized delivery of large amounts of specialized equipment, replacement parts, technological service contracts, special concessions and subsidies...
...They also questioned whether there would not eventually be further strikes and social upheavals...
...A large number of these firms had been statesubsidized under the Peronist administration, and have now lost their public support...
...Therefore, it was not strange that the two transnationals welcomed the military coup in 1976...
...Expansion has been accentuated by their growing participation in local underwriting and in a large number of financieras, or relatively small financial firms which deal in such speculative areas as foreign exchange, real estate and leasing...
...At a press conference held at the end of December, 1977, General Videla told a group of U.S...
...For example, according to La Opinion of Sept...
...In Argentina, as in Chile and elsewhere, the reliance of these firms on public contracts is so great that they have an inveterate interest in the exercise of local political influence...
...On the other hand, through their position as the public companies' major creditors, the banks also wield influence over the allocation of the contracts...
...One such period occurred during the recent Peronist regime, which was marked by an intensification of the class struggle in Argentina...
...Many small firms have closed, generating even more unemployment...
...November 29, 1977...
...Until 1945, the most important and fastest growing branches of the Argentine economy were dominated by foreign interests.$ The only government-owned firms in that period were the state banks, several waterworks companies, a few dilapidated railway lines (which ran through the poorest provinces) and the public petrol company (Yacimientos Petroliferos Fiscales - YPF), first established in 1923.' Beginning with the worldwide depression of the 30's, and continuing through the further dislocations of foreign trade and investment during World War II, Argentina's relations with foregin capital began to change...
...The new military Junta immediately sought a rapprochement with foreign interests...
...the navigation firm Empresa de Lineas Maritimas Argentina (ELMA...
...2 9 ITT managed this firm -the largest phone company in Latin America -until 1946 when the Peron government nationalized it and created ENTEL...
...In 1973 and 1974, Argentina had enjoyed large export surpluses, totaling $715 million and $434 million, res- pectively...
...258-60...
...Mercado, June 15, 1978, p.14...
...For details on the Junta's economic program and the banks' response see: Problemas de Economia (Butenos Aires, June 1976), pp.1-31...
...Neither the Minister of Economy nor the Minister of Labor cared to offer specific answers to these questions...
...and Ed Daniels, "From Mercantilism to Imperialism: The Argentine Case," Parts 1 and 2, NACLA Newsletter, Vol...
...the monthly reports of BOLSA Review, the AMEX Eurocurrency Syndication Guide, and the Argentine press, including La Opinion, La Nacion, Clarin, La Razon, among others...
...8. Jorge Schwarzer, "Los avatares de la industria Argentina," Todo es Historia (Buenos Aires, September 1977), pp...
...Finance plant expansion Group, Spanish, French and Arab banks Consortium inter- BANADE national banks IDB Finance roads, portworks, sanitation Agua y Energia Construct hydroelectric project Consortium inter- BANADE national banks West German bank Comision Nac...
...and third, that the government sell all profitable public firms, especially those involved in manufacturing...
...40-52...
...and European sources to pay for capital equipment imports...
...By the spring of 1955 the Argentine Right had begun to prepare a coup...
...The program's severity seems to reflect a lack of confidence that anything less can prevent Argentina from erupting into a total politico-economic crisis which could threaten capitalism itself...
...Culminating a process begun during the years 1940-46, the government used the huge monetary reserves accumulated by Argentina during the war to pay off the remaining debt...
...NATIONAL ELECTRICITY FROM GENERAL ELECTRIC: SEGBA The largest Argentine public power company, SEGBA, was set up in 1959 with the nationalization of electric utilities belonging to two powerful foreign holding companies, SOFINA Co...
...private U.S...
...Denuncia, March 1978, p.7...
...They theorized that their investments would create the conditions necessary for an increased allocation of private foreign and local capital to industry and agriculture, thus stimulating economic growth...
...But Illia did not budge and the electric rates of both SEGBA and the only major private utility, the Italo Co...
...For details, see NACLA, "The Foreign Debt: Priming the Pump" in NACLA, Argentina: In the Hour of the Furnaces (1975), pp...
...To further guarantee Argentina's ability to make future debt payments, the financiers also demanded that Martinez de Hoz revamp the public sector...
...Control of these firms is essential to the control of the whole Argentine economy...
...He added that the state would be willing to participate in joint ventures with the transnationals, but always as a minority partner...
...Forty thousand workers have already lost their jobs and 20,000 more are scheduled for dismissal by the end of 1978.61 But the railway workers have not taken these measures sitting down...
...9 Most important, the government decided to liquidate the previously powerful IAPI and to limit the functions of the Banco de Credito Industrial, dramatically reducing the state's control over national finance and investment...
...Ibid 12...
...Predictably, all the oil "majors" rushed to announce that they would soon participate in Argentine petroleum ventures...
...BOLSA Review, May 1978, p. 2 4 3 . 58...
...The government has applied particularly harsh measures against the state employees...
...Within the local bourgeoisie the protests against Martinez de Hoz have become more frequent and pro- nounced...
...Jesus Sabra, El capital extranjero en Argentina (Buenos Aires, 1973), pp...
...historically multilaterals have provided loans for diverse "development" programs in third world countries which the banks considered too risky...
...General Observations and Sources: This table is incomplete because it is virtually impossible to obtain exact information on loan operations with Argentina, particularly specific private company loans...
...2 7 ARGENTINE TELEPHONES: ITT A large number of other state firms have also been gradually locked into debt...
...The army responded by occupying the major railway stations and jailing hundreds of strikers...
...and the manufacturing complex Direccion Nacional de Industrias del Estado (DINIE), formed from the nationalizaton of the majority of German-owned companies in Argentina.6 These enterprises were financed largely by two key institutions: the Instituto Argentino de Promocion de Intercambio (IAPI) which controlled foreign trade, and the Banco de Credito Industrial...
...The Banco de Credito Industrial used the growing local capital markets to raise funds for both debt and equity investments in growing Argentine enterprises...
...One of the most powerful U.S.-based transnationals, ITT is also one of the most criticized for its overseas political activities...
...4,6 (July-August and October, 1970...
...Recession and economic collapse were widespread...
...Inflation became rampant, the economic and social situation turned critical, and the political crisis deepened...
...As the government's financial situation worsened, it accelerated the printing of paper money to cover its rapidly rising expenditures...
...All new oil exploration is to be carried out by private foreign companies rather than by YPF...
...Mercado, June 15, 1978, p.14...
...The 1968 loan, for example, covered an equipment contract that was bid for internationally under World Bank supervision, and was won by General Electric and Westinghouse...
...remained frozen...
Vol. 12 • July 1978 • No. 4
