In the presidential primary elections of 11 August, neoliberal President Mauricio Macri was heavily defeated by the new Frente de Todos – the alliance of Alberto Fernandez and ex-president Cristina Kirchner which won 47.65% of the vote. Juntos por el Cambio, Macri’s assemblage, took 32.08%. Roberto Lavagna’s Consenso Federal came third with 8.23%. With a 66% turnout, this defeat was the electoral response to Macri’s fervent collaboration with imperialism since taking office in 2015.
In the second round on 27 October, Macri has no chance of getting the votes needed to win. The shock to Macri, and his friends in the capital markets, was palpable. Macri’s own propagandists had provided misleading opinion polls, giving the capital markets false hopes. In September 2018, Argentina agreed $56.7bn of loans from the IMF, which Macri assumed would cover the next few years’ debt repayments and interest charges to international creditors. The IMF has already delivered $44.5bn. However, in the year to July 2019, private investors took $36.6bn out of the country. This constant cycle of international capital aims only at enriching the creditors – which the Argentine masses want to stop.
Following the election result the Peso fell 25% against the US dollar. Stock market prices also fell, by 38%. Bond prices for government dollar loans collapsed from 77 to 58 cents, as did derivatives, commodity futures and property prices. The cost of insuring Argentine Bonds reached $38 for every $100 of debt, in addition to regular debt principal and interest payments – usury capital working with a vengeance. The central bank interest rate rose to 75% to slow outward capital flight and so accumulates a daily debt of $45m. Poverty has deepened and general inflation reached 50%, a figure rising with Peso devaluation. The Peso has been falling for two years, from 16 to the US dollar in 2017, to 52 at the election, to 60 now. Shaken, Macri rushed to announce a short freeze on petrol prices, plus tax, salary or social security adjustments and promised to raise the minimum wage.
Until the new President is installed on 10 December, Macri governs without authority, but to appease his international minders, he intends to continue his fight to be elected in October. The next IMF loan instalment of $5.4bn comes in October. Macri is using the fear of a deeper recession as the basis of his campaign. His constituency is the middle and upper class epicentre of Buenos Aires, the agricultural regions and the interior of Buenos Aires Province, Cordoba and Santa Fe. In contrast, Frente de Todos claim votes from the workers, youth, the suburbs of Buenos Aires, the North and Patagonia. Matías Kulfas, Fernandez’s advisor, said the new government had the ‘absolute intention’ of completing extended debt payments, with no new mechanisms of exchange control and regularly meeting the IMF, but on renegotiated terms.
On 21 August Argentina’s new Minister of the Treasury, Hernan Lacunza, pledged to stabilise the Peso, and to meet IMF fiscal goals set in 2018. Either he intensifies exploitation, lowering the real wages of the masses, ruining much of the middle class to boot, or writes off the IMF loans. This is the only choice in the ongoing life or death struggle against imperialism. Fernandez met with the IMF and distanced himself from Macri’s structural adjustments policy. On 30 August the central bank, unable to cope with the outflow from its foreign currency reserves, announced exchange controls. The Peso fell to 65 per US dollar.
Hunger
The $56.7bn of loans from the IMF are impossible to repay. The crunch point for Argentina comes in 2021, when debt repayments themselves should begin. Argentina’s debts now make up about half of the IMF’s total loans. The IMF has demanded harsh austerity measures: cuts in basic services and healthcare and education, cuts in pensions, the slashing of government jobs, the raising of utility costs, and the elimination of past household subsidies. Not only those who are already poor, but also the middle class, have been hit, with 32% of adults and 51% of all children now in poverty. The number of young people aged 15-29 who are in poverty increased from 30.5% to 40.1% in 2018. For those aged 30-64, the poverty rate rose from 21.1% to 29.4%, whilst for those over 65 it rose from 6.1% to 9.1%. At the beginning of 2019, there were already 14.3 million people living in poverty in a country of 44 million. Industrial production has fallen nearly 10% over the past year, with manufacturing some 20% lower. The whole economy has contracted by 6.4%. Unemployment was at a record low of 5.9% when Macri took office; now it is nearly 11%, more than two million people – the highest figure since 2005. 23.4% of young women are unemployed in comparison with 18.6% of men. There are now more than 7,000 homeless people in Buenos Aires city alone.
On 3 August, the Catholic Church, anxious for its flock, called upon the government to declare a state of food and nutrition emergency, with the urgent provision of a free basic basket of essential products for the new born. In June it had already warned that the levels of social inequality were ‘dangerous for the country’. Macri’s Vice Presidential Candidate, Miguel Pichetto, called this ‘an exaggeration’ and strongly criticised the Church.
At least five million people in Argentina cannot afford the basic food basket – double the estimate when Macri entered office. On 18 September, the Senate unanimously extended the Food and Nutrition Emergency (EAN of 2002) Bill, increasing by at least 50% the national budget for public food programmes in socially vulnerable areas, until 31 December. The country provides food to 400 million people in the world, yet it can’t feed millions of Argentines. Such is the success of imperialism!
For four days from 28 August social movements and trade unions mobilised 250,000 people across Argentina, marching under the ‘Emergency to Confront Hunger’ banner. They demanded the implementation of a food emergency bill and an increase in the social wage. The current minimum salary is about half the living wage of 32,000 pesos. Treasury Minister Lacunza has now said that the government will renegotiate the IMF loans and private debts to extend the repayment dates. There is currently no other room for manoeuvre except stealing the workers’ future.
Alvaro Michaels
Fight Racism! Fight Imperialism! No 272, October/November 2019
