ECONOMY-ARGENTINA: Gov’t Adjustments Trigger Massive Protest

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jun 1 2000 (IPS) - Argentina’s three largest labour unions, the Catholic Church and politicians from the governing and opposition parties alike united in a massive protest against the government’s recent fiscal adjustments and the International Monetary Fund (IMF) – a prelude to a general strike called for June 9.

The protest overflowed from the Plaza de Mayo outside the presidential palace, while the much-criticised IMF delegation postponed its visit to Argentina by two days and president Fernando de la Rúa – who has been at the nation’s helm for just six months – left for Germany.

The IMF delegation is to evaluate the performance of the government’s economic programme, which is an attempt to reduce the fiscal deficit from 10 billion to 4.5 billion dollars by the end of the year – a goal set by the IMF.

Before leaving for Berlin to take part in a conference of social- democratic presidents, De la Rúa justified the government employee salary cuts he announced Monday and said the protests should target his predecessor, Carlos Menem (1989-1999), who he said was responsible for contracting the country’s enormous debt.

The march had originally been planned in reference to the anti- globalisation protests that have occurred since last November – in the US city of Seattle, Davos (Switzerland), London and Berlin – calling for an end to the negative consequences of “savage capitalism.”

But the Monday announcement of the government budget adjustment, the second in five months, led the march organisers to redirect their cannons to target the government.

Protest leader Hugo Moyano, a trucker by trade, called for a June 9 general strike during his speech before the crowds, and announced a series of protest measures such as black-outs, city- wide pot-banging and “fiscal disobedience” in support of small businesses, vendors and farmers.

“We are not going to allow the efforts of the Argentine people to be used to pay the external debt instead of the internal debt,” Moyano said during one of the most applauded portions of his speech before an audience that included 14 lawmakers from the governing Alianza coalition.

The unionist focused his criticisms on the international financial organisations, which he blamed for the fiscal adjustments implemented under Argentina’s recent governments, though he charged that they had served as “accomplices.”

Moyano compared the “financial dictatorship” of these organisations with Argentina’s military dictatorship (1976-1983).

“The military dictatorship tortured, made people disappear and killed, and the financial dictatorship also kills 55 children each day in Argentina, tortures the elderly and makes men and women without work disappear,” he declared.

The De la Rúa government took office last December with the promise of redistributing wealth, generating employment and returning the country to a path of growth after a year of recession. But given the large fiscal deficit, the administration decided to raise taxes and make cuts in public administration expenses.

The tax increase failed due to inefficient collection and to scant economic activity, agree economists from all points on the spectrum. Tax revenue in April was barely two percentage points higher than in March, and May’s totals are expected to drop below April’s.

Now, the national public employees are indignant about the 12 percent cut announced for monthly salaries greater than 1,000 dollars, the closing of some public agencies and layoffs in order to reduce expenditures. The government employees union says the government should call in the debts of big corporations.

Even the Ministry of Economy acknowledges there are three large companies that owe the State a total of some 200 million dollars – a third of the sum expected from the recently announced adjustment – for public service concessions that were to be paid in annual instalments.

In between the tax hike and public sector wage cuts, the government also passed a controversial labour reform package that met with sharp resistance from unions, the political opposition, and even a sector of the governing coalition – the same that took part in Wednesday’s protest.

The Alianza leaders who participated in the march charged that the labour reforms reduce salaries in the private sector and that this new measure lowers salaries in the public sector, but none of these politicians indicated they would abandon the governing coalition’s legislative bloc.

“We want to insist that the government apply the programme for which it was elected and not this series of adjustments that only serve to shrink the internal market and create a recession,” said one of the rebel lawmakers.

The legislators’ support for the protest was also in hopes that a forceful expression of public discontent could benefit the government as it sits down to negotiate with the IMF.

Wednesday’s march was organised by a group of union leaders that broke from the General Confederation of Labour (CGT) after it supported the labour reform package. But following the announcement Monday of further adjustments, the CGT leadership added its voice to the protest.

The Argentine Workers’ Central followed suit. This union, which mostly represents government employees, plans to lead a demonstration June 14 and has already launched a campaign to gather signatures calling for a subsidy for unemployed heads of family.

Unemployment in Argentina nears 14 percent, underemployment runs slightly lower and experts estimate there are thousands of discouraged workers who no longer bother to look for jobs and, as a result, are not included in employment statistics.

The Catholic Church, through several bishops, backed the march as a way to uphold the recommendations of Pope John Paul II, who calls for reforming the international financial organisations – like the IMF – so that their economic recipes are more equitable and help combat the growing gap between the wealthy and the poor.

“It is essential to create unity among social sectors in order to firmly tell the IMF we have had enough of its adjustment policy,” said the secretary of the Social Pastoral of the Argentine Episcopate, Guillermo García Canedo.

In a survey by the Argentina-based Centre for Public Opinion Studies, 70 percent of those polled identified the IMF as responsible for budget adjustments in Latin America, 65 percent believed its policies were not successful and 88 percent maintained that government should place limits on the Fund’s requirements.

Parties from across the political spectrum took part in the protest, ranging from leftist parties to the principal opposition party, the ‘Justicialists’, who governed the nation until six months ago.