Argentina’s President Javier Milei’s budget slogan is ‘There is no money’. In March – in exchange for another $800m – the IMF demanded that the Argentine government restrict its primary fiscal deficit, where current spending is above taxation, to 1.9% this year. So far Argentina has received $41.4bn from the latest IMF programme. To negotiate the money Milei has halved the number of government ministries, slashed subsidies, and is privatising public companies. He devalued the peso by 54% to stimulate exports and deter imports. Consequently inflation reached an annual rate of 280% in May.
Milei has frozen public works, cut off funding to provincial governments and in January cut off 154,441 recipients of the Potenciar Trabajo (Empowering Work) welfare program for poor, often informal, workers. Expenditures on food subsidies will drop 24.5%. Food prices have risen by around 50%, and health care costs similarly. Petrol costs in Argentina have roughly doubled. Pensions will be cut. The increasing poverty has provoked massive demonstrations against the government, despite Milei’s efforts to intimidate protesters and the dismantling of protest rights.
Unemployment and poverty
In March, Milei announced that 50,000 public sector jobs had been removed, threatening to dismiss a further 70,000. Official unemployment has risen from 6% to 8% in the last year, while 51% of the working population desperately eke out a living in the informal economy. Many of Argentina’s social security agency (Anses), which manages pensions and welfare program payments have closed. Other government areas affected by the layoffs include the Human Rights Secretariat, the National Meteorological Service and the Family Agriculture Office. In the private sector, nearly 100,000 jobs have been lost since Milei took office. Construction accounts for 40% of the jobs lost, with the complete halt to public building work, followed by cuts in commerce and industry, which see between 2,000 and 4,000 workers laid off monthly. 95% of companies neither plan to hire new staff nor increase working hours. In the first quarter of 2024, industrial activity plummeted 30%.
Pensioners, have lost 30-40% of their real income due to inflation, and pension bonuses are blocked. 11% inflation in March outpaced the 10.3% rise in salaries. 60% of Argentinians now live below the poverty line. This is a worse economic collapse than that of the coronavirus pandemic, with output falls not seen since the 2001/2 crisis.
Culture and education attacked
Inflation and budget cuts have hit public education. The University of Buenos Aires warned in April that, without a rescue plan, it would shut down, stranding 380,000 students mid-degree. University funding this year is the same as in 2023, despite inflation reducing its real value by as much as 80%. Scholarships for the 16 to 24, year olds, will be slashed by 23.6%.
At the National Scientific and Technical Research Council, Argentina’s leading scientific research organisation, 140 redundancies have been recorded so far. More than 70 technicians have been ‘let go’ at the National Meteorological Service. Doctoral grants have been halved.
On 4 March Milei closed the national news agency, Télam, which will become the State Advertising Agency. In May, the government suspended content on portals and social media of all public media outlets for ‘reorganisation’ reasons. With dozens of attacks by state authorities against the Argentine press and the public media system facing closure or privatisation, freedom of expression and cultural rights are being removed.
Argentinians take to the streets
In April at least 800,000 people demonstrated in defence of public education in over twenty cities, one of the largest protests in the last 20 years and the largest of Milei’s administration. Students, pensioners, union members, families and other groups filled the streets near the Palace of the National Congress and the Plaza de Mayo.
On 12 June thousands of people protested outside of the National Congress against Milei’s antidemocratic omnibus bill as it was being voted on by the Senate. Demonstrators threw stones and Molotov cocktails to interrupt the session and riot police armed with helmets, batons and shields arrived to drive the crowd away. They deployed tear gas, rubber bullets and water cannon. Demonstrators were treated at hospital after being pepper-sprayed, dozens of others received first aid at the scene. Over 30 were arrested and charged with various offences. The Minister of Security and the President declared hysterically that the protest was a form of coup and that the detainees were ‘terrorists’. Five people remain in custody a month later.
Inside, Senators finally voted 37 to 36 to approve of the 238-article reform bill, which declares a one-year economic emergency allowing Milei to disband federal agencies and privatise about twelve public companies. Other measures aim to weaken labour protections.
Milei’s subservience to US imperialism
To encourage foreign capital investment, Milei’s administration has authorised the entry into Argentina of Elon Musk’s satellite internet company, Starlink. Musk is interested in lithium reserves in the northwest of the country, for his Texas lithium refinery. In May Milei signed the ‘Pacto de Mayo’, an agreement with 23 state governors that emphasises the importance of exploiting natural resources.
Since taking office, Milei has visited the US on at least five occasions. In February, Israel was one of the first countries he visited, staunchly defending Israel’s action in Gaza and announcing plans to move Argentina’s embassy to West Jerusalem.
Fuel suppliers in Argentina will no longer supply Cubana airlines. Milei has purchased 24 US-made second-hand F-16 fighter jets from Denmark.
As Argentina’s economy collapses, Milei’s threat to dollarise the currency becomes more likely. Argentinians must organise the resistance. La patria no se vende!
Luna Blue
FIGHT RACISM! FIGHT IMPERIALISM! 301 August/September 2024
