DEVELOPMENT-ARGENTINA: Gov’t Defaults on Social Debt Too

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Nov 20 2002 (IPS) - Argentina’s decision to "postpone" payment of an 805-million-dollar debt to the World Bank that came due this month does nothing to improve the situation of the country’s millions of poor, say leaders of associations of the unemployed.

When the government decided against making its debt payment on Nov 14, economy minister Roberto Lavagna stressed that the priority of the Eduardo Duhalde administration is to ensure there are resources for social programmes targeting the poor and unemployed.

The future of these initiatives has been called into question, however, due to the likely freeze on new funds from the World Bank.

"The social issue is at the top of the agenda and the plans will be financed under all circumstance," Lavagna stated. One of the most important programmes is the monthly 150-peso subsidy (around 43 dollars) paid to unemployed heads of household.

However, while Lavagna appeared to be defying the International Monetary Fund (IMF), with whom Argentina has been credit negotiations for the last 10 months, organisations of the unemployed, neighbourhood residents and students staged protests to demand that the government "pay its domestic debts".

Protesters have demanded food outside supermarkets and set up dozens of highway roadblocks in the last few days in the eastern provinces of Buenos Aires and Santa Fe, in the northern Chaco and Jujuy and the western Neuquén and San Juan provinces.

"The government has a double standard," activist Jorge Ceballos told IPS. The movement he coordinates provides meals daily to some 5,000 unemployed people and their families in Buenos Aires province, and is supplied by donations from supermarkets, food manufacturers and meatpacking plants.

"The government says it is not making payments to the multilateral financial organisations because it has made social programmes the top priority. But that’s not true. This year it has paid more than four billion dollars of the debt while our children are dying of hunger," said Ceballos.

As a result of Argentina’s economic collapse, more than half of the population of 37 million now lives in poverty (up from approximately a third in mid-2001), 21.4 percent of the economically active population is unemployed, and, based on official figures, an estimated 20 percent of children under age five suffers some degree of malnutrition.

The government’s priority is not to attend to social needs but to reach an accord with the IMF, "and to do that it agrees to any fiscal adjustment," Luis D’Elía, a lawmaker for Buenos Aires province, told IPS. D’Elía also heads a group of jobless persons known as the Land and Housing Federation.

While participating in a roadblock protest in the Buenos Aires municipality of La Matanza, D’Elía issued a harsh criticism of the meeting President Duhalde held on Nov 18 with the provincial governors and parliamentary leaders to seek backing for compliance with the IMF’s latest set of requirements.

"It was a dirty trick, because not only did the government agree to cut the 2003 budget in order to please the IMF, but it also agreed to abandon people with mortgage debts (who were devastated by the January currency devaluation) and to grant immunity to the Central Bank board, which is responsible for granting loans to banks that are in the red," said the lawmaker.

That agreement was presented as a victory for the Duhalde administration, which sought the political consensus that the IMF demanded as a condition for a new loan agreement.

But IMF spokesman Thomas Dawson responded Tuesday, Nov 19, that what matters to the Fund is not the political commitment but rather compliance with stipulated measures.

Lavagna told the foreign press Tuesday that the Argentine government is not going to accept any agreement with the IMF if its demands cannot realistically be met.

The minister criticised the multilateral financial institutions for their "pro-cyclic" attitudes, which favour the recessive cycle of the economy by demanding payment of debts without lending money.

"Amidst the worst crisis in the past 100 years of Argentine history, we have reduced the debt to those institutions by 4.3 billion dollars," said Lavagna.

"However, it does not help sustain the reactivation of the economy, but instead contribute to deepening the crisis," he complained.

D’Elía, whose Land and Housing Federation is part of one of the country’s three largest trade unions, the opposition CTA, agreed with Lavagna that "Argentina had never in the past complied with its debt commitments as it has this year."

In late 2001, Argentina defaulted on debt owed to private lenders, and dug into its international currency reserves to make payments on debt to the multilateral lenders through this October.

But that policy of "subjection" to the World Bank and IMF, even when the institutions show no willingness to help, came under fire from D’Elía.

"The only thing they achieve is to worsen social genocide in Argentina," said the leader of one of the most active "picketers" movements, known for its modus operandi of using roadblocks to demand work, food and financial assistance.

"For years we have been denouncing that our children are dying of hunger, and now it seems they have discovered what we were saying is true," he said, with a note of irony, in reference to the flood of television reports about children dying from acute malnutrition and from parasitosis, an illness associated with impure drinking water.

Images of children weighing half what they should for their age have caused an outcry throughout the Argentine government and society. This South American nation is the fifth leading food producer and has abundant export surplus of food commodities.

Official figures state that an average of 11,000 Argentine children under age five die each year from preventable causes. The majority of the cases are related to jobless parents, hunger, overcrowding, lack of clean water and lack of health services.

Ceballos explained that the picketers movement runs free kitchens that feed some 5,000 people, all without state assistance.

"The programmes for unemployed heads of household pay 150 pesos a month, which is a far cry from ensuring that a family can afford the basic monthly food basket and avoid falling into indigence," said the leader.

As such, many of the members of the movement who receive the financial assistance need to complement it with at least one free meal for their families a day.

"If our movement hasn’t had anyone die of hunger, it is because we are always moving. Because in Argentina, if you don’t move, you die," said Ceballos.

The organisation’s most recent demand earned a response only from the Social Development Ministry, which offered two kilos of food per person per month.

"We asked the official who made the offer if he had a pet, because if he did, he should realise that two kilos is not enough even for a dog," Ceballos charged.

D’Elía, meanwhile, said the subsidy programme for unemployed heads of household, which the government launched in May without any foreign assistance, "is a long way from the universal coverage it is said to achieve," because it is distributed to two million beneficiaries when it should be covering at least 3.3 million.

"The plan is not only insufficient in providing family income, it also leaves out many heads of household – retirees in charge of the family, parents with children older than 18 – and it excludes young people, many without any income whatsoever to survive," he said.

DEVELOPMENT-ARGENTINA: Gov’t Defaults on Social Debt Too

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Nov 20 2002 (IPS) - Argentina’s decision to “postpone” payment of an 805-million-dollar debt to the World Bank that came due this month does nothing to improve the situation of the country’s millions of poor, say leaders of associations of the unemployed.
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