Revolutionary Worker #1114, August 12, 2001, posted at http://rwor.org
"Nobody cares about the unemployed. We are orphans."
Woman shutting down a highway
in northern Argentina
"We have entire families here that can’t feed or dress their children -- like me."
Street sweeper manning a roadblock,
whose monthly income is $160
Waves of resistance are washing over Argentina--shutting the whole country down in general strikes and roadblocks of burning tires.
Argentina has the second largest economy in South America and it has had the highest average income in Latin America--$9,000 a year. But now, after three years of deepening economic crisis, conditions for the working class have reached a breaking point.
According to the government’s own figures, unemployment has now reached over 16 percent, and underemployment is 15 percent--meaning that almost 4.5 million workers (over 30 percent of the workforce) can’t get the work they need. Mass poverty has spread. Nearly one in three people is now living below the poverty line. Desperate shantytowns of the homeless poor have grown around the cities.
Children are hardest hit: Half of Argentina’s children now live below the poverty line. One recent report showed that 800,000 kids live in homes that earn an average of $1 a day. A generation of working class kids are being forced out onto the street looking for ways to survive.
What is the response of Argentina’s government and ruling class? They spent the month of July approving sweeping new cuts in the living standards of the people. On July 31, Argentina’s Congress imposed a 13 percent cut in the salaries of government workers and in the income of retired government workers whose pensions are more than $6,000 a year.
The plan passed on July 31 was the seventh of cuts Argentina’s President Fernando de la Rúa has carried out in a year and a half! For millions of people it was the last straw. The country came to a stop.
Shut it down!
Resistance to this latest round of cuts has mounted day by day, as it became clear that the government really intended to force the cuts through.
July 17, the governors of the country’s 23 provinces and the mayor of the city of Buenos Aires reached agreements with the widely hated President de la Rúa to support his new wave of government cuts. Since many of these officials were from opposition parties, this was a sign of agreement within bourgeois political circles. International banks praised President de la Rúa for having forged a difficult unity within the country’s ruling class.
The next day, July 18, the country’s employed workers launched a powerful two-day general strike. Trains, busses, the national airline, schools and universities were all shut down. Strike supporters blocked several highways.
The capital city, Buenos Aires, was rocked with demonstrations. Government workers marched on the presidential palace. Workers and students besieged the stock exchange until riot police drove them away with water cannons.
This was the sixth general strike against President de la Rúa since he took office in December 1999. It was by far the most powerful -- shocking government officials by shutting down over 60 percent of industry.
The strike expressed a profound rejection of this capitalist crisis among the workers. At the same time, the generally conservative forces leading the trade union movement tried to channel this discontent in line with their reformist views and electoral schemes. The union officials aligned with the Peronista opposition supported the idea of deep austerity cuts, but denounced the fact that workers alone were being targeted. Other trade union federations raised reform demands for unemployment insurance and government training programs.
Government prosecutors announced they were considering charging union officials with sedition (illegal challenge to government power) for supporting the general strike. Meanwhile some press accounts reported that union officials were losing influence over the mass resistance and that leadership was sliding into more radical hands.
Even after this strike, the government pressed ahead with its plans. On July 30, it received final approval by the national Senate.
Immediately, tens of thousands of people responded by shutting down the country’s highways and city streets. Government workers, students and the unemployed went into the streets and set up barricades of burning tires in over 40 cities. The government estimated that 70 percent of highway traffic was stopped. The protests opposed the cuts of government worker salaries and pensions, demanded jobs for the unemployed and called for the release of jailed protesters.
Five traffic arteries were blocked in Buenos Aires, cutting off the airport and bringing rush hour to a stop. Outside the capital, in the militant working class suburb of La Matanza, over a thousand people and dozens of pickup trucks blocked the main highway into the city. In the suburb Florencia Varela, hundreds of protesters occupied a bank building.
Street blockades have been increasing in Argentina over the last year. The northern city of General Mosconi has been the center of an intense struggle by unemployed workers. And farmers have set up blockades as the NAFTA flood of cheap American grain has driven many of them to ruin.
August 1 was the first successful national shutdown of highways and cities. Bourgeois forces have openly worried that these blockades, unlike the more routinized union strikes, are being organized at the grass roots by new radical organizations "often with the help of cell phones and the internet." In many places, working class youth and children played a prominent role in the street blockades.
The federal government threatened to break up the blockades--but backed down when faced with the obvious popularity of the movement. There were some clashes and arrests--including a streetfight between workers and police in Cordoba, Argentina’s second largest city.
Protesters have sworn to find ways to continue their resistance. Various government workers have announced plans for wildcat strikes--in defiance of both the government and their conservative union leaders.
Collision of Classes
"I think the contagion internationally is going to be much larger than anyone was expecting. You can’t raise a fence around Argentina and just let it soldier on its own."
Walter Molano, Director of BCP
Securities, a banking institution
"The only thing that will appease the markets is the belief the government is in control of the situation."
Standard & Poor’s,
"This plan is not negotiable. I will give my life in this fight."
Argentinean President Fernando de laRúa
"We think the only way to get this country growing again is to stop paying the debt. We want the government to fall."
An unemployed printer at a roadblock
At the root of this intensifying class struggle are the profoundly different responses of opposing classes to the economic crisis.
For the ruling classes, the recession in Argentina’s economy is seen overwhelmingly in terms of how it impacts the government’s ability to pay interest on $150 billion foreign debt--equal to 50 percent of its Gross Domestic Product.
As the economy shrinks, tax revenues are running 8 percent below last year. This means the government has less to pay the global bankers.
Argentina is required to pay $8.5 billion to the international banks by the end of 2001. And since this spring, Argentina’s Finance Minister Domingo Cavallo has jetted all over the world, promising that his government will make those payments. The international banks have coldly insisted that the only way to keep their money flowing is to deeply cut payments to government employees and pensioners.
While the masses of people in Argentina were outraged by these latest cuts, President de la Rúa’s cruel plans were applauded at the G-8 meeting of world imperialists in Genoa.
The imperialists have two worries: first, a collapse of Argentinean payments will ripple through their international financial system and second, that the capitalist "medicine" of cuts will trigger even greater revolts against Argentina’s government.
On August 2, Jose Antonio Ocampo, head of the UN´s Economic Commission for Latin America and the Caribbean, predicted that economic growth in Latin America will be cut in half this year as crises in Argentina and Brazil compound the effects of the global slowdown.
In this capitalist world, nothing can be built or financed unless some big capitalist thinks there is money to be made--so the drop in "investor confidence" threatens to bring a whole country to its knees. As a result, the policies of Argentina’s President de la Rúa and the major bourgeois parties have been focused on meeting the cruel demands of international capital.
On August 3, the IMF announced it will lend Argentina enough money to prevent an immediate default on its loans--while the Argentinean government presses ahead with its plans to gouge even more from the people.
International bankers openly say that the $1.5 billion of these latest cuts will not be enough. The Argentinean government has already openly announced that they are planning the next wave of cuts. Cabinet chief Chrystian Colombo warns, "The people have to be prepared to face up to this profound crisis."
As the fighting spirit of the masses rises, the think tanks of capitalism are openly discussing schemes for imposing their demands by force. In London’s Financial Times, David Hale, the chief global economic analyst for Zurich Financial Services, recently wrote about Argentina’s crisis: "The situation could become so unsettled that it is even possible to imagine scenarios in which both Argentina and Brazil could return to military rule."
The imperialist system and the capitalists of Argentina are on a collision course with the masses of people. The deep economic crisis is producing an intensifying political crisis--with the escalating protests of this last year building toward new tests of strength.
This article is posted in English and Spanish on Revolutionary Worker Online
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