Economy minister Roberto Lavagna announced May 3 that prices rose 10 percent in April, the fourth consecutive month of such increases. Combined with the nearly 70 percent decline in the value of the peso against the dollar since January, this adds up to a monthly inflation rate of nearly 20 percent. These conditions have devastated the purchasing power of working people and middle-class layers who are already scraping by on meager earnings.

According to a CNN dispatch many workers dispute the government’s figures that "seemed out of touch with the daily reality trying to make ends meet on wages cut to the bone after a four-year recession." The news agency reported that prices of basic foods and clothing that make up the bulk of purchases for working people rose between 30 and 50 percent in April and are up 150 percent since January.

"It’s a lie that prices have risen 10 percent. It’s a lot more," asserted Adela Lamas, a mother of four who earns about $4 a day selling track suits at a street stand outside a railroad station in Buenos Aires. "I have to feed my kids, but with these prices it’s impossible to live."

The New York Times ran an article titled "Steak endures in lean times." The paper reported that "many working people have given up beef altogether" and that no longer "do construction workers set up makeshift grills at curbside to cook steaks for lunch or dinner," but added that the "young, hip and beautiful" still pour into restaurants to "devour delectable sushi and ceviche and sample flights of chardonnay."

Figures released in 1999 show 20 percent of the population lives on $2 a day or less. Unemployment is now at almost 25 percent. More businesses are on the verge of collapse with almost no access to local or international bank loans.  
 
Pressure from IMF
The regime is facing increasing pressure from imperialist investors to push through an economic program of harsh austerity measures in exchange for loans to infuse the country’s paralyzed banking system. As a stopgap measure the government is seeking a bridge loan--to pay some $800 million it owes to the World Bank in May. The International Monetary Fund (IMF) froze loans after Buenos Aires suspended payments on its $141 billion foreign debt in December.

IMF spokesman Thomas Dawson said once "key elements" of the austerity plan are in place, the imperialist financial institution would send a "full mission to Buenos Aires to negotiate a new agreement," the Wall Street Journal reported May 3.

For a decade leading up to the social explosions that erupted last December, the Argentine government followed the advice of Washington and the IMF, pegging its currency, the peso, to the dollar on a one-to-one basis, selling off state enterprises, and implementing other antilabor measures. Hailed as an economic model by the imperialists, today the country is reeling from one crisis after another. Two more Argentine companies defaulted on their loans largely as a result of bringing in revenues in depreciating pesos while holding dollar-denominated debts. Imaggen Satelital SA missed a $4.4 million interest payment, and Cablevision SA missed a $36.1 million payment. A default is defined as being more than 90 days behind in payments.  
 
 
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