Who’s Afraid of Reversing Neoliberal Reforms? Financial Statecraft in Argentina and Venezuela

Varieties of state interventionism in financial policy in the aftermath of the 2008 global crisis

“…In the period immediately prior to the global crisis, Argentina was experiencing twin surpluses (fiscal and current account), built up from the resurrection of its economy in the post 2002 era. The real economy was being driven by the commodity boom, and by a new type of macroeconomic populism established in 2007 (Labaqui, 2014;Frenkel, 2013Fanelli, 2013).…”

“…These events worsened the risk perception that international markets held of the country (see Graph 2) and contributed, together with the global crisis, whose effects could still be alleviated by commodity exports, to the outflow of foreign capital. Despite the wide acceptance of debt restructuring by creditors in 2005 and 2010, a group of hold-out creditorsthat did not accept the restructuring offer in 2005were able to legally prevent Argentina from placing more debt on international markets (Labaqui, 2014).…”

“…Moving forward on the institutions, the federal government announced in December 2009 that it would use foreign reserves to pay down part of the private external debt, creating a fund for this, the Fondo Bicentarnario, 5 which in March 2010 was replaced by another fund that allows government access to reserves. Despite a great deal of backlash, from legal processes to the effective resignation of the governor of Argentina's central bank (BCRA), who at that time refused to implement this policy, the government continued to exchange reserves for 10-year debt securities (Labaqui, 2014).…”

The hidden edifice of (food) sovereignty: Rights, territory, and the struggle for agrarian reform in Venezuela

“…Beginning with the failed coup d'etat by the old dominant classes in 2002—precipitated by the passing of the “Enabling Laws” concerning participatory democracy, land reform, and political control of the national oil company—Chávez implemented a system of currency controls to stem capital flight. Access to dollars by individual companies was mediated by the Comisión Administradora de Divisas (Labaqui, , p. 35). Yet subsidising hard currency for domestic capital, in the absence of stronger state oversight, significantly undermined national development.…”

Can International Relations and Comparative Politics Be Policy Relevant? Theory and Methods for Incorporating Political Context

“…First, the commodity boom that buoyed economies throughout South America in the early twenty‐first century was driven by demand from China, and to lesser extent from India. Second, Chinese state banks and sovereign wealth funds have been extremely generous in dispensing credit to left‐populist South American governments, especially Venezuela and Argentina, and in quantities that have single‐handedly enabled these sovereign borrowers to escape from the direct (International Monetary Fund) and indirect (market) sanctions that otherwise would have been imposed on them (Associated Press ; Labaqui ). However, if the researcher's analysis remains exclusively focused on the institutions, norms, and rules of the existing global sovereign debt regime—which have not changed (yet)—then neither Argentina's recent experiences, nor the likely future evolution of the policy governance regime, can be understood.…”