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A socialist newsweekly published in the interests of working people
Vol. 66/No.3January 21, 2002

lead article
Workers in Argentina
protest peso devaluation
Move a body blow to livelihoods of workers and farmers
Photo - see caption below
Hundreds of trade unionists and other workers took part in a January 7 march organized by the Argentine Workers Federation to oppose devaluation of the peso and other measures by President Eduardo Duhalde in response to the country's economic collapse.
NEUQUÉN, Argentina--Several hundred unionists and other workers marched in this southwestern city January 7 to oppose the measures announced by the new administration of President Eduardo Duhalde in response to the country's economic collapse. The devaluation of the nation's currency, the peso, which has already led to price increases for basic necessities, will be a body blow to the living standards of workers and farmers throughout Argentina.

Firsthand coverage from reporters in Argentina

"Businesses already marked up the prices of bread, meat, cooking oil, salt, and other essential items by 20 or 30 percent even before the official devaluation," said José Romero, a worker from the nearby Zanón ceramic tile factory who was part of a 30-person contingent from that plant. "The devaluation will mean a big cut in our wages."

The nearly 380 workers at Zanón, members of the Ceramics Workers Union, have been occupying the factory for the past two months to resist the employer's plans for mass layoffs. They are running the production lines themselves and selling the product in order to pay workers' wages while they press their demand that the state take over the plant.

"In the hospitals here we're now facing shortages of medicines and other pharmaceutical products," explained another marcher, Norma Mendoza, a member of the health workers union, which is affiliated to the Association of State Workers (ATE). She said suppliers of pharmaceutical goods were holding back imported goods to sell at higher prices.

On the January 5-6 weekend, the Argentine congress approved an "emergency law" giving special economic powers to Duhalde, who two days after taking office devalued the peso, ending a 10-year-old policy of pegging the peso to the U.S. dollar. The official exchange rate is now 1.4 peso to the dollar, a 28.6 percent devaluation.

There will be two parallel exchange rates. The official rate will apply to business and trade, while individuals will have to pay a floating exchange rate. Economy Minister Jorge Remes Lenicov said the government would maintain this dual rate for several months, before allowing the peso to float freely on the market, meaning further devastating devaluations are in store for working people.

Feigning concern for workers, the government also issued a measure banning mass layoffs "without cause" for 90 days. At the march, workers scoffed at the announcement, since many were already involved in a battle against mass layoffs. More importantly, they pointed out, the government has not reversed a 13 percent cut in retirement pensions and wages of public employees.

Lenicov also announced that restrictions on bank withdrawals, now limited to $1,000 a month, would be eased to $1,500. The restrictions have a direct effect on those with bank accounts, but they have also made it more difficult for working people to cash paychecks and have led merchants to raise prices.  
Capitalist parties all back devaluation
The devaluation and related measures were backed by all the parties in the government--Duhalde's Justicialist (Peronist) Party, the Radical Party, and another capitalist party called Frepaso. The Peronists control both houses of congress; the Radicals and Frepaso formed Fernando de la Rúa's coalition government, which collapsed on December 20.

The reshuffled coalition government under Duhalde has shown more staying power, in part due to support from two of Argentina's three union federations. The two wings of the General Confederation of Labor (CGT), which are politically tied to the Peronists, have come out in support of Duhalde's economic measures. Truckers union president Hugo Moyano, head of what is known here as the "dissident CGT," praised Duhalde for his "courage" and claimed the government had promised to repeal a series of "labor reform" laws that attack workers' social wage and union rights.

A third labor organization, the smaller Argentine Workers Federation (CTA), was critical of the government's moves. "Devaluation will simply continue the process of concentration of wealth in the hands of a few in Argentina," said CTA organizational secretary Edgardo Depetri in an interview.

While none of the three union federations call for canceling Argentina's $132 billion foreign debt, Depetri stated in an interview that "we have paid that debt many times over in interest payments." The CTA's main campaign today is to advocate establishing unemployment insurance of $380 a month for all heads of households who are jobless, plus $60 a month for each dependent child. Unemployment insurance does not exist for most workers in Argentina.

CAME, an organization of businessmen and small merchants, called on "consumers, merchants, small businessmen, professionals, and Argentine families" to join a cacerolazo--a pot-banging protest--in Buenos Aires on January 7 in support of the government's economic measures. They later canceled the action, presumably because of lack of support.

Economy Minister Lenicov said the government would draft a new budget, saying only that it would be "austere." He reported that the government had an $11 billion budget deficit for 2001, nearly double its original forecast.

U.S. and other imperialist creditors have been demanding that the Argentine government slash social spending, weaken union rights, and take other measures that will squeeze even more out of working people. The economy minister said he would travel to Washington later in January for talks with U.S. officials on the debt crisis.  
Washington's demand
A top economic advisor for U.S. president George Bush, Lawrence Lindsey, declared January 6 on Fox News Sunday that Washington would "aid" the Argentine government only after "political reforms are carried out and Argentina becomes viable in the long term." Blaming the South American nation for the capitalist economic meltdown there, Lindsey declared, "Argentina's main problems have to do with how they have handled things. If you're a provincial government in Argentina, you can spend money and let the federal government pay the bill." One of the imperialists' demands is to cut back spending in the depressed provinces, which are marked by skyrocketing unemployment, low wages, and ruinous conditions for small farmers.

Duhalde took office in the wake of the resignation of four other presidents in less than two weeks, following an explosion of mass protests around the country that forced de la Rúa to resign. De la Rúa presided over two years of deepening depression conditions, with unemployment jumping to at least 18 percent and underemployment even higher. The regime slashed wages and pensions, increased taxes, and implemented laws allowing bosses to extend working hours and undermine unions. More recently, it imposed the limits on bank withdrawals. Even with these savage measures, however, the government was unable to keep up with the growing interest payments on billions in foreign debt to imperialist creditors.

During the de la Rúa administration, the unions carried out seven general strikes to protest these economic measures. The crisis boiled over in mid-December. Unemployed workers demanding jobs blocked highways across the country December 12. The next day a general strike paralyzed the country. Over the next week, large crowds of impoverished working people began to storm supermarkets demanding food.

The mobilizations, which for years had been strongest in the provinces, finally erupted in Buenos Aires as well. On December 19 thousands poured into the streets of the capital and demonstrated in front of the presidential residence as well as holding cacerolazos in neighborhoods throughout the city. It was a mixture of working people revolting against unprecedented levels of unemployment, cuts in social programs, unpaid wages, and police brutality, as well as middle-class layers spurred into action by the partial freeze on bank deposits, the growing burden of personal debt, and the fear of being thrown into the ranks of the working class by the crisis.

After de la Rúa sacrificed his hated finance minister, Domingo Cavallo, while at the same time decreeing a state of siege, tens of thousands filled the Plaza de Mayo angrily demanding the president's resignation. Deadly assaults by riot police, which left 30 dead nationwide, not only did not cow protesters, but sparked deeper outrage. De la Rúa resigned December 20 and left the presidential house by helicopter.  
Workers occupy rail car repair shop
Today, while Duhalde is making progress for now in putting together a new government that seeks to restore stability for capitalists at home and abroad, struggles by workers and farmers continue to bubble across Argentina. The fall of the de la Rúa government has given many increased confidence in their own potential strength.

One such fight is by workers at EMFER, a rail car repair shop in San Martín, a town in the industrial belt surrounding Buenos Aires. The plant, previously state-owned, is a subsidiary of Trenes de Buenos Aires (TBA), a train line that was sold off in 1993 as part of the privatization of Argentine railways under the Menem administration. In recent weeks, 173 of the 320 workers in the plant were laid off, and the rest face the threat of the plant's closure. In response, 150 workers, members of the Metalworkers Union (UOM), have been occupying the plant since December 12.

"We've blocked the General Paz highway, the Miguelete rail station, and the sales of tickets at the Central Station of TBA," said Darío Carballo at the plant gate. "We rotate every two or three days, so there are always at least 40 workers in the plant 24 hours a day."

"We've won a lot of support from other workers, in spite of the cops who are out there trying to maintain an intimidating police presence," said Alejandra Gorosito, 31. As she was being interviewed, two members of the Food Workers Union at the nearby Pepsi-Cola plant were visiting to show their support. They commented that solidarity with this fight was important because they and workers at many other factories face the threat of layoffs and shutdowns as well.

Workers explained that this fight is being led through a revitalization of their comisión interna (internal commission), an elected factory committee that exists in many factories in Argentina parallel to the normal union structure, which is often tied up in bureaucratic red tape.

Rafael Artíguez, 34, a delegate to the internal commission, said, "Industrial workers haven't yet been part of the big mobilizations against the government through their unions, but many people have been affected by everything that's happened--from the last seven years of protests by unemployed workers to the recent outpourings that forced de la Rúa to quit."  
Duhalde regime
Duhalde was chosen by Congress as president at a time when capitalist politicians of all parties are increasingly discredited in the eyes of working people and other layers devastated by the crisis. Duhalde is a leader of a wing of the Justicialist Party that uses more traditional Peronist demagogy about representing the workers and "the poor," in contrast with the wing represented by Saúl Menem, who as president closely aligned his government with U.S. imperialism and presided over a sharp acceleration of attacks on workers' jobs and social wage.

His wife Hilda "Chiche" Duhalde, who today is in charge of the government's social programs, cultivates an Eva Perón image of charitable concern for the downtrodden. Through the Peronist apparatus, she has promoted a network of neighborhood block leaders, women known as the manzaneras (manzana means block) who hand out food, jobs, and political favors, and who spy on political activists.

Duhalde has put together a bipartisan cabinet including Radical Party figures and prominent big-business figures such as the head of the Industrial Union. He has pointed to a foreign policy that will seek closer ties with European imperialist powers and to play them off against Washington in order to gain some breathing space--a stance that a Duhalde supporter called "polygamy" in contrast to a Menem aide's infamous comment in the 1990s of seeking "carnal relations" with Washington.

Other measures announced by the government include instructing banks to convert loans of less than $100,000 into pesos at a one-to-one ratio to lessen the impact of the devaluation on middle-class layers. Deposits made in dollars will be still kept in dollars. Almost half the banks in the country are foreign owned, many by Spanish companies. The move would make banks turn assets into pesos while keeping their liabilities in dollars, something bank officials are saying will cost them between $10 billion and $20 billion. "We are being asked to bear the full brunt of the devaluation," claimed one Spanish bank official. Spanish companies have invested some $40 billion in Argentina over the past decade.

Spain's prime minister urged Duhalde to rapidly come up with a "practical and credible economic plan" in order to "win the support of the international community." Romano Prodi, currently president of the European Commission, demanded Argentina "honor its international commitments" to resume payments on the foreign debt.

Another measure imposes a 25 percent export tax on oil, heavily affecting the Spanish company Repsol-YPF, which gets 45 percent of its operating income from Argentina's oil and gas fields. A company spokesperson called the measure "plunder." The French government sent an official letter asking Duhalde to do "everything in your power to look after our companies who have invested much in Argentina."

Duhalde refused to meet with a delegation of Spanish bankers and declared he would "not cede" to the pressure, and repeated his condemnation of his predecessors economic program, which was backed by the imperialist-run International Monetary Fund.

The Peronists have in the past used such demagogy, painting one or another imperialist power as the problem in order to divert the anger and mobilizations of working people from the government somewhere else. And Duhalde quickly began backpedaling under the pressure, stating that funds from the export taxes would be used to compensate the banks or that new loans of up to $20 billion would be sought from the IMF or World Bank and turned over the foreign-owned financial institutions.

The devaluation and other economic measures, however, already show that the Duhalde government will continue the basic course of the Menem and de la Rúa regimes of seeking to resolve the economic crisis at the expense of working people--a course that is generating continued resistance by workers and farmers.


Help fund Militant/PM reporting trips
to Argentina and Cuba

A team of workers correspondents that includes Perspectiva Mundial editor Martín Koppel is in Argentina to bring readers of the Militant and PM firsthand coverage on developments there, including the revolt that has erupted against soaring unemployment and brutal cutbacks in living standards imposed by the capitalist government, social polarization the crisis engenders, and discussion among working people on how to confront the capitalist collapse.

Another reporting team is schedule to leave in early February for the Havana International Book Fair and related events.

Your contribution makes reporting trips such as these possible. Please make checks or money orders payable to the Militant, earmarked Travel Fund, and send to: The Militant, 410 West St., New York, NY 10014.
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