Argentina:
At the Hour of the Economic Crisis—Two Demonstrating Workers Killed

Jul 16, 2001

(The following article is translated from an article appearing in the July 6, 2001 issue of Lutte Ouvriere, the newspaper put out by comrades in France.)

.... Two demonstrators, one of whom was a teen-ager, were killed when the Argentine armed forces tried to break up a barricade that workers had built on a road in Salta. This province in the northwest of the country had already seen a number of confrontations in recent years.

The degradation of the conditions of existence

To break up the workers’ roadblocks, the “radical” government of De la Rua sent in 400 police, pretending to "protect the population." The workers who blocked the road had hoped to win a modest demand–that is, an increase in their wages from $1.60 to $2.50 per hour. The authorities claimed that it was not the police who shot but some "snipers." The picketing workers who barricaded the road had no doubt that the "snipers" who shot the two came from the state police.

These confrontations, which have become more and more routine, are provoked by the decline in living conditions. The Argentine population finds it more and more difficult to survive. And there is nothing good in the recent government proclamations. They are only now recognizing that Argentina has been hit by recession. The sale of automobiles has fallen 55%, textiles have fallen 20% in the course of the last year.

An engineered depression

In 1991, Domingo Cavallo, President de la Rua’s Minister of the Economy, established a plan which tied the Argentine peso directly to the U.S. dollar. This convertability plan was supposed to be able to bring about monetary stability. In any case, it certainly did bring about austerity measures, frenzied privatizations and budget cuts, which fell heavily on the population.

But this did not create an economic recovery, because the Argentine economy is part of the world. Starting in 1999, Argentina suffered blows coming from the crash of the Brazilian currency, which was itself a consequence of the financial crash from 1997 which ravaged southeast Asia and parts of Latin America.

Cavallo decided on a mini-devaluation. Each dollar gained from export got an 8% bonus, while a levy was put on imports, making them more expensive. While this was not at all likely to stop the fall of the peso, it did lead directly to an increase in the cost of living for the laboring classes.

The population isn’t over its troubles. The rulers have mortgaged the future to obtain ready cash today. They already have to pay increased interest on the debt they owe to the International Monetary Fund (IMF), representing 23% of the Argentine state budget today, compared to “only” 10% in l997.

In 3 years, they might have to pay 15% interest, instead of the 7% they are currently paying on the government bonds they issue. That is double! Not only has it become a matter of urgency to pay the debt to the IMF, but the government evidently doesn’t have the political will to oppose itself to international finance. Completely the contrary.

Toward a new devaluation?

The threat of a new devaluation–no matter how tiny–is not ruled out. The recent injection of 40 billion dollars in the financial circuits has not stopped speculation on the peso. Cavallo navigates, to conserve the confidence of investors who doubt that the Argentine state will be able to meet the various debt payments. Too sudden a withdrawal of capital from Argentina would doubtless lead to a new crash touching neighboring countries, Brazil among others ....

Unemployment is already officially 17%, which means in reality it is well above 30%; at least 20% of the population are relegated to temporary and part-time jobs. But if the Argentine economy is shaken by a recession which today threatens the world economy, the essential weight of the sacrifices falls on the shoulders of the poor population. Over the past 20 years, that is since the end of the dictatorship, the disproportion between poor and rich has steadily grown. Today, the richest 10% earns 26 times more than the poorest, compared to “only” 12 times as much, 20 years ago.

When it goes so very well for the rich, then it goes proportionally that much worse for the poor classes, who must struggle to survive, sometimes without any salary or with a salary or pension which is late, without even a decent living place. The shanty towns multiply in the province of Buenos Aires, while in the heart of the capital homeless camps appear–under the highways, in the most deprived neighborhoods.

This is what drives unemployed or underpaid workers, forced to live hand to mouth, to revolt. When they barricade the roads to make their anger heard, this government, which can’t stand up to the representatives of imperialist finance, meets them with violence and sometimes–machine guns.