- Created: Wednesday, 06 May 2009 14:09
- Written by Alvaro Michaels
This year Argentina’s economy will contract at least 5%. Half the population already lives in poverty on less than US$3 per day. If the January inflation rate of 2.3% continues for the rest of the year, 4.3 million more people will be thrown into poverty. Meanwhile the IMF is forcing the Argentinean state to continue cuts in spending and abandon its temporary dual exchange rate, so accelerating the collapse of the economy.
This removes all room for manoeuvre for the Argentinean bourgeoisie as it falls further into the grip of imperialism. At the same time, President Duhalde hypocritically laments the fact that the ‘political class’ does not represent the wishes of the people.
At the end of February, in order to create a ‘credible’ budget for the IMF, provincial and central government agreed to a massive cut in social services expenditure. The aim was to cut the provincial deficit by 80% from $2,500 million in 2001 to $500 million in 2002. In many districts, the local state is a key employer and the cuts will cause further unemployment. No surprise then that the ‘political class’, politicians of all ruling parties, ex-Presidents, supreme court ‘justices’ and senior government officials generally are popularly despised and routinely ejected from bars, malls, cafes and restaurants, chased and abused in the streets and picketed in their homes.
On 27 February, Argentina started paying interest on the $1,000 million that the Spanish Central Bank and Official Credit Institute lent last September via the IMF. To do this the state is cutting the levels of spending on the poor, pushing whole sections of the unemployed into the arms of church charity. In response the Spanish church has raised $5.5m to send to Argentina to buy food, medicines and other means of assistance for the poor. Society is being driven backwards by capitalism in decay. Once again clerics are turned into ‘saints’ as they collude in the state’s offensive against the working class. Meanwhile banks make public appeals in an effort to halt the escalating physical attacks on their property and directors.
In the north east 57% of the population lives below the poverty line; in some areas it is 67%. Workers demonstrate across the country, besieging supermarkets demanding food. Roadblocks continue across the country. In La Plata, state employees occupied public offices demanding their salaries, and pensioners held demonstrations demanding that medical loans be available to them again. In Bahia Blanca, the unemployed blocked the roads to the local refinery demanding work. In Casilda on 15 March, thousands of ruined small farmers, hundreds of young families, a third of the local population, went onto the streets, directing their anger at the banks and privatised corporations, later destroying banks and automatic cash machines. Similar events took place in some 40 towns across the country.
Poverty both for workers and the middle class
Official figures show that 808,000 families will fall out of the middle class in 2002, on top of the 1.1 million middle class families who were impoverished in 2000. The state’s attempt to impoverish the middle class even further continues with new proposals to replace the $67bn deposits seized by ex-President de la Rua last December with low interest 10-year dollar and five-year peso securities. This will mean restricted access to funds for the most desperate sections of the middle class. When these bonds circulate they will fall in value by perhaps 60%. This is state theft. Outside of the USA, Argentineans hold more dollar bills per person than any other nation in the world. If the reversion to a devalued peso in Argentina fails then full dollarisation may follow, as in Ecuador, and with it, the loss of any remnants of sovereignty to the USA. Meanwhile, where they can, the middle classes are changing their pesos to dollars after economy minister Lenicov partly lifted the hated freeze on savings accounts. The government cannot allow the burden of devaluation to strike the middle class too hard or too quickly if it is to maintain power without direct military support.
Argentina’s neighbours are worried. In mid February Argentina’s largest private bank, Banco de Galicia, suspended operations in Uruguay after one third of deposits were removed by investors. Mercosur, the South American trade bloc, has pleaded for ‘global support’ and the EU may increase import quotas on Argentinean farm products. Current Euro-protectionism means the loss of $14bn a year to Argentina. The government is unable to finance existing spending and is now temporarily taxing exports, the supposed source of income, to repay debts in the future! It has now proposed a ‘windfall tax’ on privatised corporations having let them run riot for years, charging in the case of telephones virtually the highest tariffs in the world.
A programme for the working class
As reported in FRFI 165, the ‘pickets movement’ has developed strongly over the last two years. Since December the larger urban areas have seen the rapid growth of popular local and district assemblies. There are some 65 in the Buenos Aires area and over 164 throughout the country. All have many hundreds of participants. They hold weekly meetings to organise protests and marches and pass relevant motions which together are forming a clear programme for the working class. They are open to all locals and take as a first principle that ‘Everyone Counts’. Typical recent decisions of the Centenary Park inter-district assembly include a protest against the media, a vote against the 2002 state budget and the bankruptcy law, and demands to nationalise the banks and return all deposits, to renationalise all privatised industries, and to kick out the Supreme Court. In Urqiza the assembly demanded that oil taxes go to the unemployed rather than the banks, and that the names and addresses of all functionaries and judges be made public to enable proper popular control. The mood of the assemblies is one of consistent direct democracy, a public insistence on non-violence in the light of a history of police provocation, a practice of collective representation and horizontal organisation, and, importantly, maintenance of the programme of the National Pickets Assembly.
Amid continuing widespread civil unrest, President Duhalde has claimed that ‘there is a risk that (protests) could evolve into a spiral of violence, making it necessary to impose order, because people [sic] do not tolerate anarchy’ (Financial Times, 27 February). Already, in December, citizens’ rights had been suspended as police fought protesters across the country. Rumours of military intervention constantly circulate to panic the middle classes into allying themselves once again with the corrupt establishment’s ‘political class’. The key issue now is how workers will organise themselves politically against imperialism and its allies.
For further information on workers’ assemblies see: