ECONOMY-ARGENTINA: General Strike Paralyses a Nation in Crisis

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Dec 13 2001 (IPS) - The whole of Argentina was largely paralysed Thursday as a result of a general strike organised by the country’s three main labour unions, the seventh in the two years since President Fernando de la Rúa took office.

Public transportation workers adhered to the stoppage en masse, leaving train stations, bus stops, and the subway system deserted Thursday morning, though there was an increase in automobile traffic.

The public hospitals operated with minimum services, attending to emergencies only. Most teachers and professors joined the daylong strike, which could see a repeat next week, though it would be extended to 48 hours.

The main ingredients in Argentina’s economic crisis are the recession that has been dragging the country down for the last 38 months, a foreign debt of 130 billion dollars with large payments coming due, and a rising fiscal deficit that the government can no longer stave off with loans due to the high interest rates involved.

Faced with this panorama, the Ministry of Economy is simultaneously attempting to renegotiate the debt payment deadlines, fight tax evasion, and obtain fresh funds – even if it means adopting strict austerity measures that would eliminate efforts aimed at economic reactivation.

The ministry is seeking – at all costs – to prevent the collapse of the country’s banking system and the devaluation of its currency, the peso, which has been pegged at one-to-one parity with the dollar since 1991.

Wednesday’s protests were successful in terms of participation, in spite of the poor public image of the union organising the events. Workers and pensioners came out in force, a manifestation of the growing confusion, frustration and anger caused by the economic crisis.

Retirees, for example, who receive a paltry pension of 150 dollars a month, were told Wednesday that payment would be delayed one week.

The tearful elderly people shown on Argentine television holding up the few coins they have left in their pockets, images of the very old, walking with canes and on the verge of collapse due to extremely warm temperatures and their own anguish, convinced the government Thursday to issue the pension payments Friday, not next week.

Meanwhile, the teachers in Buenos Aires province, who have not yet received their November paycheques, heard a proposal in which they would received their full wages for December – not partial payment, as has occurred in recent months.

But the teachers would be paid in the form of vouchers issued by the provincial government, despite its previous assurances that payment would be in pesos.

“I don’t know if this is desirable or not. The alternatives are all bad. If we don’t accept the vouchers, maybe they will pay us nothing,” commented one teacher upon hearing news of the proposal.

Thursday’s general strike was convened by the General Confederation of Labour (CGT), the largest union, by the CGT faction made up of dissident unionists, and by the Congress of Argentine Workers (CTA).

The quiet that predominated in Argentina’s cities as a consequence of the general strike contrasted with Wednesday’s street protests, which included marches, rallies, roadblocks, blackouts and ‘cacerolazos’ – in which residents standing in windows or on balconies bang pots and pans at a given hour.

The CTA, in a joint effort with civil society groups and political organisations, is planning to conduct a “popular consultation” this Friday through Monday, a referendum on creating an unemployment insurance programme for heads of household, which would provide 380 dollars a month, plus 60 dollars for each school- age child.

The initiative was first proposed two years ago and includes a built-in financing plan. The unemployment insurance system would serve to reactivate the internal market, say the referendum organisers.

The Argentine people are to begin casting their ballots this Friday, and if the majority vote in favour, the initiative’s sponsors will ask the legislative Congress to enact it.

Economist Claudio Lozano, with the Association of State Employees, said in a conversation with IPS that today’s critical juncture in the economy is the driving force behind the initiative, which seeks a redistribution of income through a policy in which decision-makers are the citizens, not the politicians.

“The novelty of this proposal is that we who are organising it are not politicians, nor do we want to be political candidates in the future. We only seek to place the matter of income distribution at the centre of the debate,” stated Lozano, one of the authors of the measure drawn up by the National Anti-Poverty Front.

The labour unions called the Thursday strike to protest against the sharp restrictions on the amount of cash that accountholders can withdraw from banks (1,000 dollars a month) and to demand the resignation of Economy Minister Domingo Cavallo.

However, each sector of workers added their own demands to the protest as well, such as payment of overdue wages and the reinstatement of benefits that have been eliminated.

The Wednesday protests included the more-traditional march, organised by the dissident wing of the CGT, which drew thousands. But there were also some unique expressions of discontent, such as activists from certain leftist parties who took to the streets wearing only cardboard boxes.

In an unprecedented move, even shopkeepers took part in the protests.

“I have never participated in something like that before, but on Wednesday I did, and I feel much better,” Nilda Lazo, owner of a clothing shop in the capital, told IPS.

Hit hard by the economic crisis in the pre-holiday season – a time when business should normally be brisk -, small business owners filled the streets of downtown Buenos Aires, banging pots and pans, and blocking traffic.

Victoria Morales, who owns a children’s clothing store, told IPS she has never experienced a time as gloomy and discouraging as the present.

The major chains of shops that are her competition are preparing to call their creditors because they can no longer afford to remain in business, bet even so, small shops like Morales’ find it difficult to capitalise on others’ losses.

“The problem is that nobody is buying, and even if we sell something, I know that when I sit down to do the accounting I will have nothing left over that justifies continuing to pay rent, taxes, utilities and everything else we need to pay to keep the business running,” she said.

Fewer customers than normal have visited Morales’ shop due to the limited access to cash resulting from the banking restrictions imposed earlier this month, and most buyers are paying with bank debit cards, which presents a whole new set of problems.

The lease on the devices used in the debit card transactions – conducted via telephone lines – cost shopkeepers 96 dollars a month. But because the recent set of measures announced by minister Cavallo has prompted massive use of credit and debit cards, the government pressured the companies supplying the machines to reduce the lease payment to 30 dollars.

“I phoned the company to ask them to reduce the monthly charge for the machine from 96 to 30, but they told me no because they said I had the machine” before the measures were announced, said Morales.

Furthermore, she said, the credit card companies unilaterally decided to convert the payments due from pesos, the Argentine currency, to dollars, among other “arbitrary” moves that have the shop-owner worried, particularly because there is growing fear of a currency devaluation.

“I don’t know what is going to happen, but something has to change because we can’t go on like this,” said another protesting shopkeeper. He said his sales had plummeted 50 percent since the banking measures restricted the Argentine consumers’ access to cash.

His shop does not have the device to process credit and debit card purchases because, he said, he could not pay the monthly lease – and his telephone line was cut off due to lack of payment.