Trump’s Troubling Choice of Sessions
By Gilbert Doctorow | Consortium News | March 17, 2016
I imagine many anti-war colleagues will choke over Donald Trump’s selection of the junior senator from Alabama Jeff Sessions to head his foreign policy team. Sessions’s past strong support for the 2003 invasion of Iraq and the prosecution of the war that followed features prominently in his Wikipedia entry.
Surely, it is not heart-warming to read about Sessions’s rally in 2005 to protest an anti-Iraq War rally the day before. There he described the other side as committing the sin first highlighted by President Ronald Reagan’s neoconservative United Nations Ambassador Jeane Kirkpatrick in 1984 – “to blame America first.”
Then there are the other, non-foreign policy positions of Sessions that will be galling to all progressives. Ranked as one of the most conservative members of Congress, his positions on civil rights, gay marriage, race relations, immigration and abortion rights follow conservative orthodoxy. The list of his domestic policy red flags goes on and on.
In any case, Sessions is not widely regarded as a foreign policy expert. Despite his membership on the Senate Armed Services Committee, national security policy is not his strong suit. He is known more for his experience as a former state attorney general and a member of the Senate Judiciary Committee,
By itself, the choice of Sessions is a seemingly sad commentary on Trump’s campaign. And yet it clearly fit within Trump’s political calculations of getting elected to the presidency. Picking Sessions came not long after Sessions issued his endorsement of Trump, one of the first major figures in the Republican establishment to do so. With his solid standing within the more conservative wing of the party, Sessions is a valuable asset to protect Trump against charges that he is not a real Republican, nor a real conservative.
Whether Trump really intends to take counsel from this new chief adviser on foreign policy is another matter, a question of strategy and not electoral tactics. In this sense, Trump may have been too clever by half.
As he draws together a foreign policy and security team, Trump’s choice of Sessions – a lockstep Republican on national security as illustrated by his staunch support of President George W. Bush’s Iraq War – may push aside “realist” and “anti-interventionist” military and civilian experts who have been left on the curb these past 20 years as the American foreign policy establishment purged its ranks of heterogeneous opinions to become dominated by a monolithic assemblage of warmongers.
A person who regularly communicates with me summarized the challenges facing Trump in formulating foreign policy as follows:
“The key is fleshing out for Trump what his elliptical statements, not only about [Russian President Vladimir] Putin and Russia, mean, and translating his deal-making into a new non-militarist diplomacy — making big diplomatic deals that will end the cold war and open other prospects, e.g., on nukes, etc. I sense he is ready for this, but the military people Sessions will recruit have contrary instincts and no regional knowledge. Trump does best tapping into the real conservatives who are closer to Rand Paul and worship the Reagan of 1985-88. Even the retired Gen. [Martin] Dempsey [former chairman of the Joint Chiefs of Staff], based on what [investigative reporter Seymour] Hersh wrote, might advise Trump.” (Hersh described Dempsey as resisting interventionist pressure to engage in “regime change” in Syria and instead worked behind the scenes with Russia to thwart gains by jihadist terror groups.)
The first task for a President Trump would be to take us back from the brink of nuclear war with Russia. In the context of needless confrontations with Moscow, which have produced a feverish atmosphere of mutual distrust, preemptive nuclear strikes have become all too thinkable.
A potential Trump administration in January 2017 should arrive in office with well-defined plans for resuming arms control talks that address directly American concerns over Russian tactical nuclear weapons and Russian concerns over America’s global missile defense system. Trump and his team should be ready to discuss and to act on a desperate need for a new security architecture in Europe that brings Russia in from the cold.
Only after these debts in arrears are resolved can we proceed in positive territory to revising the rules of global governance and replacing rancor and discord with concerted actions by all the big global players. This is the foreign policy which the American public has backed in opinion poll after opinion poll over the past 30 years. It is the policy which the establishment elites have denied us for too long.
Gilbert Doctorow is the European Coordinator, American Committee for East West Accord, Ltd. His latest book Does Russia Have a Future? (August 2015) is available in paperback and e-book from Amazon.com and affiliated websites. For donations to support the European activities of ACEWA, write to eastwestaccord@gmail.com. © Gilbert Doctorow, 2016
The Ever-Curiouser MH-17 Case
By Robert Parry | Consortium News | March 16, 2016
The curious mystery surrounding the shoot-down of Malaysia Airlines Flight 17 over eastern Ukraine on July 17, 2014, gets more curious and more curious as the U.S. government and Dutch investigators balk at giving straightforward answers to the simplest of questions even when asked by the families of the victims.
Adding to the mystery Dutch investigators have indicated that the Dutch Safety Board did not request radar information from the United States, even though Secretary of State John Kerry indicated just three days after the crash that the U.S. government possessed data that pinpointed the location of the suspected missile launch that allegedly downed the airliner, killing all 298 people onboard.
Although Kerry claimed that the U.S. government knew the location almost immediately, Dutch investigators now say they hope to identify the spot sometime “in the second half of the year,” meaning that something as basic as the missile-launch site might remain unknown to the public more than two years after the tragedy.
The families of the Dutch victims, including the father of a Dutch-American citizen, have been pressing for an explanation about the slow pace of the investigation and the apparent failure to obtain relevant data from the U.S. and other governments.
I spent time with the family members in early February at the Dutch parliament in The Hague as opposition parliamentarians, led by Christian Democrat Pieter Omtzigt, unsuccessfully sought answers from the government about the absence of radar data and other basic facts.
When answers have been provided to the families and the public, they are often hard to understand, as if to obfuscate what information the investigation possesses or doesn’t possess. For instance, when I asked the U.S. State Department whether the U.S. government had supplied the Dutch with radar data and satellite images, I received the following response, attributable to “a State Department spokesperson”: “While I won’t go into the details of our law enforcement cooperation in the investigation, I would note that Dutch officials said March 8 that all information asked of the United States has been shared.”
I wrote back thanking the spokesperson for the response, but adding: “I must say it seems unnecessarily fuzzy. Why can’t you just say that the U.S. government has provided the radar data cited by Secretary Kerry immediately after the tragedy? Or the U.S. government has provided satellite imagery before and after the shootdown? Why the indirect and imprecise phrasing? …
“I’ve spent time with the Dutch families of the victims, including the father of a U.S.-Dutch citizen, and I can tell you that they are quite disturbed by what they regard as double-talk and stalling. I would like to tell them that my government has provided all relevant data in a cooperative and timely fashion. But all I get is this indirect and imprecise word-smithing.”
The State Department spokesperson wrote back, “I understand your questions, and also the importance of the view of these families so devastated by this tragedy. However, I am going to have to leave our comments as below.”
Propaganda Value
This lack of transparency, of course, has a propaganda value since it leaves in place the widespread public impression that ethnic Russian rebels and Russian President Vladimir Putin were responsible for the 298 deaths, a rush to judgment that Secretary Kerry and other senior U.S. officials (and the Western news media) encouraged in July 2014.
Once that impression took hold there has been little interest in Official Washington to clarify the mystery especially as evidence has emerged implicating elements of the Ukrainian military. For instance, Dutch intelligence has reported (and U.S. intelligence has implicitly confirmed) that the only operational Buk anti-aircraft missile systems in eastern Ukraine on July 17, 2014, were under the control of the Ukrainian military.
In a Dutch report released last October, the Netherlands’ Military Intelligence and Security Service (MIVD) reported that the only anti-aircraft weapons in eastern Ukraine capable of bringing down MH-17 at 33,000 feet belonged to the Ukrainian government.
MIVD made that assessment in the context of explaining why commercial aircraft continued to fly over the eastern Ukrainian battle zone in summer 2014. MIVD said that based on “state secret” information, it was known that Ukraine possessed some older but “powerful anti-aircraft systems” and “a number of these systems were located in the eastern part of the country.”
The intelligence agency added that the rebels lacked that capability: “Prior to the crash, the MIVD knew that, in addition to light aircraft artillery, the Separatists also possessed short-range portable air defence systems (man-portable air-defence systems; MANPADS) and that they possibly possessed short-range vehicle-borne air-defence systems. Both types of systems are considered surface-to-air missiles (SAMs). Due to their limited range they do not constitute a danger to civil aviation at cruising altitude.”
One could infer a similar finding by reading a U.S. “Government Assessment” released by the Director of National Intelligence on July 22, 2014, five days after the crash, seeking to cast suspicion on the ethnic Russian rebels and Putin by noting military equipment that Moscow had provided the rebels. But most tellingly the list did not include Buk anti-aircraft missiles. In other words, in the context of trying to blame the rebels and Putin, U.S. intelligence could not put an operational Buk system in the rebels’ hands.
So, perhaps the most logical suspicion would be that the Ukrainian military, then engaged in an offensive in the east and fearing a possible Russian invasion, moved its Buk missile systems up to the front and an undisciplined crew fired a missile at a suspected Russian aircraft, bringing down MH-17 by accident.
That was essentially what I was told by a source who had been briefed by U.S. intelligence analysts in July and August 2014. [See, for instance, Consortiumnews.com’s “Flight 17 Shoot-Down Scenario Shifts” and “The Danger of an MH-17 Cold Case.”]
But Ukraine is a principal participant in the Dutch-led Joint Investigative Team (JIT), which has been probing the MH-17 case, and thus the investigation suffers from a possible conflict of interest since Ukraine would prefer that the world’s public perception of the MH-17 case continue to blame Putin. Under the JIT’s terms, any of the five key participants (The Netherlands, Ukraine, Australia, Belgium and Malaysia) can block release of information.
The interest in keeping Putin on the propaganda defensive is shared by the Obama administration which used the furor over the MH-17 deaths to spur the European Union into imposing economic sanctions on Russia.
In contrast, clearing the Russians and blaming the Ukrainians would destroy a carefully constructed propaganda narrative which has stuck black hats on Putin and the ethnic Russian rebels and white hats on the U.S.-backed government of Ukraine, which seized power after a putsch that overthrew elected pro-Russian President Viktor Yanukovych on Feb. 22, 2014.
Accusations against Russia have also been fanned by propaganda outlets, such as the British-based Bellingcat site, which has collaborated with Western mainstream media to continue pointing the finger of blame at Moscow and Putin – as the Dutch investigators drag their heels and refuse to divulge any information that would clarify the case.
Letter to the Families
Perhaps the most detailed – although still hazy – status report on the investigation came in a recent letter from JIT chief prosecutor Fred Westerbeke to the Dutch family members. The letter acknowledged that the investigators lacked “primary raw radar images” which could have revealed a missile or a military aircraft in the vicinity of MH-17.
Ukrainian authorities said all their primary radar facilities were shut down for maintenance and only secondary radar, which would show commercial aircraft, was available. Russian officials have said their radar data suggest that a Ukrainian warplane might have fired on MH-17 with an air-to-air missile, a possibility that is difficult to rule out without examining primary radar which has so far not been available. Primary radar data also might have picked up a ground-fired missile, Westerbeke wrote.
“Raw primary radar data could provide information on the rocket trajectory,” Westerbeke’s letter said. “The JIT does not have that information yet. JIT has questioned a member of the Ukrainian air traffic control and a Ukrainian radar specialist. They explained why no primary radar images were saved in Ukraine.” Westerbeke said investigators are also asking Russia about its data.
Westerbeke added that the JIT had “no video or film of the launch or the trajectory of the rocket.” Nor, he said, do the investigators have satellite photos of the rocket launch.
“The clouds on the part of the day of the downing of MH17 prevented usable pictures of the launch site from being available,” he wrote. “There are pictures from just before and just after July 17th and they are an asset in the investigation.” According to intelligence sources, the satellite photos show several Ukrainian military Buk missile systems in the area.
Why the investigation’s data is so uncertain has become a secondary mystery in the MH-17 whodunit. During an appearance on NBC’s “Meet the Press” on July 20, 2014, three days after the crash, Secretary Kerry declared, “we picked up the imagery of this launch. We know the trajectory. We know where it came from. We know the timing. And it was exactly at the time that this aircraft disappeared from the radar.”
But this U.S. data has never been made public. In the letter, Westerbeke wrote, “The American authorities have data, that come from their own secret services, which could provide information on the trajectory of the rocket. This information was shared in secret with the [Dutch] MIVD.” Westerbeke added that the information may be made available as proof in a criminal case as an “amtsbericht” or “official statement.”
Yet, despite the U.S. data, Westerbeke said the location of the launch site remains uncertain. Last October, the Dutch Safety Board placed the likely firing location within a 320-square-kilometer area that covered territory both under government and rebel control. (The safety board did not seek to identify which side fired the fateful missile.)
By contrast, Almaz-Antey, the Russian arms manufacturer of the Buk systems, conducted its own experiments to determine the likely firing location and placed it in a much smaller area near the village of Zaroshchenskoye, about 20 kilometers west of the Dutch Safety Board’s zone and in an area under Ukrainian government control.
Westerbeke wrote, “Raw primary radar data and the American secret information are only two sources of information for the determination of the launch site. There is more. JIT collects evidence on the basis of telephone taps, locations of telephones, pictures, witness statements and technical calculations of the trajectory of the rocket. The calculations are made by the national air and space laboratory on the basis of the location of MH17, the damage pattern on the wreckage and the special characteristics of the rockets. JIT does extra research on top of the [Dutch Safety Board] research. On the basis of these sources, JIT gets ever more clarity on the exact launch site. In the second half of the year we expect exact results.”
Quinn Schansman, a dual U.S.-Dutch citizen killed aboard Malaysia Airlines Flight 17 on July 17, 2014. (Photo from Facebook)
Meanwhile, the U.S. government continues to stonewall a request from Thomas J. Schansman, the father of Quinn Schansman, the only American citizen to die aboard MH-17, to Secretary Kerry to release the U.S. data that Kerry has publicly cited.
Quinn Schansman, who had dual U.S.-Dutch citizenship, boarded MH-17 along with 297 other people for a flight from Amsterdam to Kuala Lumpur on July 17, 2014. The 19-year-old was planning to join his family for a vacation in Malaysia.
In a letter to Kerry dated Jan. 5, 2016, Thomas J. Schansman noted Kerry’s remarks at a press conference on Aug. 12, 2014, when the Secretary of State said about the Buk anti-aircraft missile suspected of downing the plane: “We saw the take-off. We saw the trajectory. We saw the hit. We saw this aeroplane disappear from the radar screens. So there is really no mystery about where it came from and where these weapons have come from.”
Although U.S. consular officials in the Netherlands indicated that Kerry would respond personally to the request, Schansman told me this week that he had not yet received a reply from Kerry.
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com
UK Police pursue pensioner’s peace protest
By Peter Lazenby – Morning Star – March 17, 2016
A Weekly vigil outside a military base by a 74-year-old peace campaigner has been put under threat by a police dispersal order.
Lindis Percy, who stages a one-hour vigil at US communications base Menwith Hill in Yorkshire every Tuesday, told the Star yesterday that police turned up this week ordering activists to leave.
A fellow campaigner decided to leave but Ms Percy was arrested after refusing to budge. She has been ordered to appear in court on April 7.
The base is staffed by 1,450 US civilian and military personnel and is a key link in the US’s worldwide electronic intelligence-gathering operations via satellites.
Ms Percy, who is a retired nurse, midwife and health visitor, has been a leading peace campaigner for more than 30 years. She has been arrested hundreds of times.
She says North Yorkshire Police and the Ministry of Defence Police at the base have begun applying a dispersal order to stop her weekly vigils at the base.
“I very much want this in court as it is serious, if they get away with this. It stinks.”
Dispersal orders are part of the Anti-social Behaviour, Crime and Policing Bill 2014.
According to government guidelines, dispersal orders give police powers “to disperse individuals or groups causing or likely to cause anti-social behaviour in public places.”
The guidelines also state that “police will be able to deal quickly with emerging trouble spots” and that there must be reason to suspect that “the person has contributed or is likely to contribute to members of the public in the locality being harassed, alarmed or distressed, or the occurrence of crime or disorder.”
Toll from Saudi raids on Yemen market hits 119: UN
Press TV – March 17, 2016
A senior UN official says the death toll from recent Saudi airstrikes on a crowded market in the Yemeni province of Hajjah has risen to nearly 120.
Meritxell Relano, deputy representative for the UN Children’s Fund (UNICEF) in Yemen, on Thursday put the number of people killed in the Tuesday’s air attacks on the northern province at 119.
The strikes took place in the northwest of the Yemeni capital Sana’a after two Saudi airstrikes hit al-Khamees market in the district of Mustaba on March 15.
The UN sources say the victims include at least 20 children. Many other Yemenis were injured in the deadly aerial raids in the troubled region.
The UN children’s agency in a statement strongly denounced the deadly airstrikes.
UN Secretary General Ban Ki-moon also on Wednesday described the Saudi aerial raids as “one of the deadliest “ since Riyadh launched a military campaign against the impoverished Arab country in March last year. The UN chief also demanded a probe into the deadly incident.
The world body has already warned of a “human catastrophe unfolding in Yemen.”
Meanwhile, General Ahmed al-Asiri, a Saudi military spokesman, said on Thursday that Riyadh will scale down combat operations in Yemen in an apparent bid to divert mounting criticism of the military aggression.
However, al-Asiri stressed that the kingdom will continue to provide air support to Yemen’s former regime loyalists battling Houthi Ansarullah fighters and allied army units on the ground.
Riyadh has been under fire by international organizations and rights groups over the rising number of civilian casualties in Yemen.
The Saudi military strikes were launched in a failed effort to undermine the popular Ansarullah movement and bring the former fugitive president back to power.
At least 8,400 people, among them 2,236 children, have been killed so far and 16,015 others have sustained injuries.
Pentagon Drops the Ball Over Open Skies Treaty With Russia
Sputnik – 16.03.2016
US officials want Washington to deny Russia the right to observe strategic infrastructure facilities in the US from the air under the Open Skies Treaty.
At the center of their concerns is a new sensor suit installed on Tu-214OS, a special-purpose reconnaissance aircraft, used for such flights.
Some Congress and Pentagon representatives have already voiced concerns that Russia might use these flights to spy on American power plants, communications networks and other critical infrastructure.
“I cannot see why the United States would allow Russia to fly a surveillance plane with an advanced sensor over the United States to collect intelligence,” The New York Times quoted Representative Mac Thornberry, a Texas Republican who heads the House Armed Services Committee, as saying in a statement earlier in February.
His concerns are echoed by US Strategic Command (STRATCOM) Commander Adm. Cecil Haney:
“The treaty has become a critical component of Russia’s intelligence collection capability directed at the United States.” Defense One, the US defense and national security website, quotes him as saying.
“The Open Skies construct was designed for a different era…I’m very concerned about how it’s applied today,” adds Defense Intelligence Agency (DIA) Director Lt. Gen. Vincent Stewart.
Defense One, however has an answer to their concerns.
When the Treaty was first negotiated, the states involved all approved the use of panoramic and framing cameras using film, video cameras, infra-red line-scanning devices and sideways-looking synthetic aperture radar – all far less capable than what was then available to intelligence agencies, it explains.
The maximum ground resolution acceptable with treaty-approved cameras is 30 centimeters. Today, anyone can buy commercial satellite imagery with a resolution of 25 centimeters, it adds.
Russia recently requested to switch from wet-film cameras to digital sensors for its surveillance flights over the US.
The website says that the Treaty has provisions to upgrade and modernize sensors. Film has long ago given way to digital imagery. Treaty members have agreed to allow a digital electro-optical sensor package upgrade, but not to allow Open Skies flights to operate so that higher resolution can be obtained.
So why doesn’t the US military add its own digital sensors, questions the website?
“Because the Pentagon dropped the ball,” it explains.
“A policy directive to proceed with the upgrade was issued in 2012, but the Defense Department didn’t issue a request for proposal until 2015, and still hasn’t chosen a contractor. The issue isn’t money – perhaps $45 million. The problem is that Open Skies flights are a very low priority for the Pentagon.”
“At a time when the Pentagon is embarked on a new $3 billion initiative to reassure European friends and allies worried about Russian belligerence, it makes sense to speed up equipping the US Open Skies plane with digital imaging capabilities, rather than to complain about the disadvantages of mutual transparency,” it furthermore states.
Russia has for years conducted unarmed observation flights over the United States, just as the United States does over Russia, as part of the Open Skies Treaty, which was signed in 1992 by both nations as well as 32 other countries at the end of the Cold War, and entered into force a decade later.
Although the treaty and the flights, unfamiliar to most Americans, amount to officially sanctioned spying, their goal has been to foster transparency about military activity and to reduce the risk of war and miscalculation, especially in Europe.
“Amid last year’s rising tensions, the US Open Skies aircraft carried out twice as many overflights as its Russian counterpart,” Defense One says.
“US flights have strengthened ties between NATO members and have reassured non-NATO states around Russia’s periphery. Under the Treaty’s “ride-sharing” provision, US flights over Russia in 2015 carried crew members from Ukraine, Canada, France, Germany, the Czech Republic, Great Britain, Turkey, Italy and Romania.”
“Moreover, complaints about the new Russian advantage under Open Skies may be overblown and are certainly misdirected. The Kremlin isn’t the culprit in this case; the Pentagon is,” it says.
Russian officials confirmed the plans to equip surveillance planes with digital hardware but cited the obsolescence of wet-film equipment as a major reason behind the decision.
“We are switching to digital equipment because nearly nobody produces wet-film equipment any longer,’ said Mikhail Ulyanov, director of the Foreign Ministry Department for Non-Proliferation and Arms Control, in an interview to RBTH.
It also eliminates photochemical processes, allowing an operator onboard to observe terrain in real time, according to Vartan Shakhgedanov, chief design engineer of the new Russian system.
The system, specifically designed for Open Skies flights, includes two Tu-214ON planes produced by the Vega Radio Engineering Corporation (Vega) and the United Instrument Manufacturing Corporation (UIMC), two bodies within the Russian state corporation Rostec.
However, if Russia successfully upgrades its surveillance equipment, the US risks losing its advantage in what has so far been a relatively safe way to obtain strategic intelligence.
The new equipment meets criteria for film resolution set by the Open Skies Treaty, but is less clunky than its predecessor.
Rose Eilene Gottemoeller, the Under Secretary of State for Arms Control and International Security for the US State Department sought to temper concerns about Russian overflights, saying that what Moscow gains from the observation flights is “incremental” to what they collect through other means.
“One of the advantages of the Open Skies Treaty is that information — imagery — that is taken is shared openly among all the treaty parties,” she said at a joint hearing of the House Foreign Affairs and Armed Services committees back in December.
“So one of the advantages with the Open Skies Treaty is that we know exactly what the Russians are imaging, because they must share the imagery with us.”
Argentina and the Vultures: the Political Economy of the Settlement
By Mark Weisbrot | The Hill | March 14, 2016
After 15 years of court battles, injunctions, smear campaigns, lobbying, and other interventions, the vulture funds have finally won a tentative agreement with the new Argentine government. Vulture funds — the name preceded this particular dispute — are so called because they buy up defaulted debt for a very small fraction of its face value, then sue (and use other tactics) to collect an exorbitant return. In the case of Argentina, the chief vulture, American billionaire and major Republican campaign donor Paul Singer, will get an estimated 370 percent return; another vulture fund in the settlement did even better, with a return of 950 percent.
The agreement is tentative because President Mauricio Macri of Argentina still has to get the nation’s Congress, in which he does not have a majority, to change some laws in order to finalize the deal. And he will also have to reach agreement with some remaining “holdout” creditors. And now the vulture funds are appealing the judge’s order that would have allowed Argentina to issue new debt, presumably in an effort to extract even more concessions. But assuming it all works out, though, there are some important lessons to be learned from this long war over sovereign debt.
Argentina arguably had no alternative but to default in 2002, but the government also did the right thing by standing up to the IMF and its international creditors until it reached a deal (in 2003 and 2005) that would allow the economy to recover. International lenders — in this case a creditors’ cartel headed by the IMF — often succeed in getting a settlement that keeps the country trapped in recession, depression, or very low growth with an unsustainable debt burden; as well as numerous conditions (cuts to social spending, public pensions, public employment) that harm the majority of the debtor country’s citizens. Some of the worst recent examples of these abuses can be seen in countries like Greece and Jamaica, and will likely include Puerto Rico if there is a debt restructuring there.
By taking a hard line with its foreign creditors, Argentina reached an agreement with 93 percent of them that allowed the country to do very well over the ensuing 14 years. Instead of a prolonged depression as in Greece, or limping along from one crisis to the next, Argentina began an extraordinarily robust recovery just three months after its default and enjoyed very high growth — more than 90 percent in real GDP from 2002–2015. (There is some dispute over the exact number but it does not change the story.) This enabled Argentina to reduce poverty by about 70 percent and extreme poverty by 80 percent, in the decade 2003–2013.
So, even though the country would later run into economic trouble — in the world recession of 2009, but also in the last four years — there is no doubt that it pursued very successful economic policies, which it would not have been able to implement under a less favorable agreement with its creditors. Now, about the slowdown of the past four years, in which the economy has grown by about 1.1 percent annually: Part of the problem was that Argentina could not borrow on international markets, due to its inability to settle with the vulture funds. For Argentina’ detractors, this proves that the default and subsequent tough negotiation were wrong. But clearly that is not the case; the alternative offered by the IMF and the creditors was vastly worse.
The problem is really the vulture funds, and also the foreign policy goals of certain actors within the United States, who were against the prior government of Argentina. Here is Judge Thomas Griesa, of the Federal District court for the Southern District of New York, to whom the New York Times devoted a news article describing his incompetence: “Put simply, President Macri’s election changed everything.” This is from Griesa’s decision of February 19, explaining why he decided to conditionally lift the injunction he had imposed against Argentina in 2014, which the Financial Times editorial board generously described as “eccentric rulings,” and which prevented Argentina from making its debt payments. In other words, he much preferred the new, right-wing, pro-Washington government, as opposed to the prior, left government that he helped get rid of. Griesa’s unprecedented decision to take 93 percent of Argentina’s creditors hostage on behalf of the vulture funds was obviously political at the time. Now he has admitted it, to the chagrin of our legal system.
Argentina had appealed Griesa’s injunction to the U.S. Supreme Court, and the governments of France, Brazil and Mexico, and the Nobel Prize-winning economist Joseph Stiglitz filed briefs on its behalf. Interestingly, the IMF announced that it, too, would file a brief on behalf of Argentina. This was not because the IMF loved the Argentine government, but because Griesa’s decision was considered a threat to the stability of the international financial system. But the U.S. Treasury forced the IMF into an embarrassing retreat, most likely due to pressure from the vulture lobby and some anti-Argentina members of Congress, in particular from Florida, who could threaten to hold up legislation that the Fund needed.
Did I mention that the vulture fund chief Paul Singer is a major contributor to Florida Senator Marco Rubio, and is currently rumored to become finance chair for his presidential campaign?
The U.S. government also stopped blocking loans to Argentina at the World Bank and the Inter-American Development Bank, just after Macri was elected. Macri himself also has an interesting history with the U.S. State Department: In conversations with U.S. officials leaked by WikiLeaks, Macri chastised them for being “too soft” on the Argentine government and encouraging its “abusive treatment” of the U.S.
The main lesson from this whole episode is the importance of national economic sovereignty for middle-income countries like Argentina. This is what allowed Argentina to recover from disastrous economic policies implemented under IMF tutelage; and it was the infringement on this sovereignty by U.S. courts and other actors that made it difficult for Argentina to resolve the economic problems of the past few years. We will see how this new, less sovereign government fares going forward, now that it has settled with the vultures.