Centre for Research on Globalisation

The Abyss in Argentina

by Roger Burbach

Centre for Research on Globalisation (CRG),  globalresearch.ca ,  6 May  2002

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Argentina is in the midst of an unprecedented upheaval. In office for just four months, President Eduardo Dudalde last week reshuffled his cabinet, appointed a new economics minister, and called for yet another austerity program designed to meet the demands of Washington and the International Monetary Fund.

But virtually no one here believes that the new economic measures will be implemented or that the IMF will provide Argentina with the necessary funds to resuscitate the country’s moribund economy. As Manrique Salvarrey, a political analyst and congressional consultant for the opposition stated: “The country is bankrupt, the government will not be able to deliver on the IMF demands, and few think Duhalde will survive for long, regardless of how many times he changes his cabinet. New elections could be called at any moment that will lead to even more uncertainty and instability. We are in an abyss from which there is no apparent exit.”

Major protests, representing every social sector, occur on a daily basis in this country of 36 million inhabitants. Since the beginning of the year an average of nineteen major demonstrations have occurred per day according to one survey. This week the largest agricultural federation is on strike, with landowners blocking roads with tractors and farm implements. Unemployed workers, called piqueteros, are shutting down other major traffic arteries around the country, demanding jobs, and in some cases, plots of land so they can set up community cooperatives to produce food for their hungry families. And in the province of San Juan, public employees are occupying government offices, demanding salaries that have not been paid for months.

In Buenos Aires, popular assemblies are regularly convened in all the major barrios, calling for the replacement of the entire government, including the Congress and the Supreme Court as well as the President and his cabinet. Other protestors in the capitol, mainly from the upper middle class, bang on boarded bank windows and walls, demanding the payment of their frozen savings accounts.

“We are a shattered country,” says Lidia Pertieria, a social psychologist who participates in the popular assemblies. Beggars roam the streets, and in the once elegant commercial district of downtown Buenos Aires, every block has shuttered storefronts of bankrupt businesses. Groups of children and elderly people wait at fast food chains like McDonalds, not to buy hamburgers, but to get the remnants of food tossed into garbage cans. Official statistics reveal that 49 percent of Argentines now live below the poverty line in a country that once enjoyed the highest per capita income in Latin America. Argentina now ranks ninth, behind countries like Brazil, Chile and Peru.

Along with the political leadership, the major financial and international economic institutions are held responsible for the devastation of Argentina. The Federation of Bank Employees in Buenos Aires slaps stickers on bank walls proclaiming: “No More Extortion by Foreign Banks and the International Monetary Fund.” Jose Luis Coraggio, an economist and the rector of a university in Buenos Aires, angrily declares: “The leadership in Washington which dominates IMF policy is responsible for this economic catastrophe. We are to be made an example of because Argentina has no strategic importance, no major oil reserves, no illegal drugs, and we do not flood the U.S. with immigrants. Our political class bankrupted the country in the 1990s by implementing Washington’s neo-liberal economic prescriptions. Now we are told that the only solution is to turn over the bits and pieces that remain of our national economy to foreign lenders and to slash government social spending even further to get ‘rescue financing’ from the IMF.”

As is to be expected in a time of crisis and upheaval, the opposition is fragmented into a wide variety of social and political groups ranging from organizations on the left, like the Workers Party, to political formations like Alternatives for a Republic of Equality (ARI), which contains many dissidents from the two dominant political parties, the Radicals and the Justicalistas. The popular assemblies, while reflecting a surge in participatory democracy, find it difficult to coordinate their disparate activities and to articulate a unified national program. Even the militant piqueteros are split into three main groups. No major figure among the opposition commands wide respect as an alternative to the current political leadership.

The most charismatic figure in the opposition, Elisa Carrio of ARI declares the country is in the midst of a “hurricane” that is levelling everything: “We are facing the final disintegration of Argentina’s traditional political identity, the final destruction of the old economic order, and an institutional crisis never witnessed before.” She calls upon the entire political leadership to resign, to schedule elections for a legislative assembly to establish “a new social contract” that will be based on “justice, truth, … social inclusion, equality and the rule of law.” This process will be “chaotic,” she says, but it is necessary.

While Carrio says little about concrete economic policies, there is a growing belief among many groups and organizations that Argentina needs to build a fundamentally different type of economic system from the ground up. The largest trade union in the opposition movement, the Argentine Workers Confederation, is calling for “shock redistribution” to reactivate the economy. An initiative launched by the National Front Against Poverty which has over 60,000 members, this economic approach asserts that the only way to reactivate the economy is by putting funds into the hands of the country’s poor and the unemployed, not by slashing social programs and public employment as demanded by the IMF. A leading economist of the workers confederation, Claudio Lozano, proclaims: “We will not get out of this crisis without an absolutely different approach. Shock redistribution means providing employment and minimal financial support to all families, making the tax system more equitable, and redefining our relationship to the international economy.”

A new grass roots economy has already taken hold, born out of necessity. Three and a half million Argentines, one-tenth of the population, now participate in what are called nodos, or barter exchanges, and the number is expected to double by years end. Some popular assemblies issue degrees to divert taxes to local hospitals and medical facilities while forbidding the foreclosure of local businesses. Textile and ceramic factories that were once shuttered have been reopened by their workers and are now operating at full capacity.

Torcuato Di Tella, an eminent sociologist who has advised past Argentine leaders, declares: “We need to find a solution without the help of the IMF, to mobilize our own resources, including state intervention in the financial system and the market place.” Argentine also needs to look to “regional trade blocks like Mercosur including Brazil,” while rejecting U.S. dominated trade initiatives “such as the Free Trade Area of the Americas.” This path “will not be pretty and it will mean more violence and a decline in the standard of living at first” says Di Tella, but it is the only approach that will lead Argentina out of the abyss.

Copyright ©   Roger Burbach   2002. Reprinted for fair use only

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