Argentina: Workers' power the only alternative

David Rey reports from Argentina on the current economic and political situation. The economic plight of the workers has got worse since the events of last December, and the initial euphoria has given way to a more sober attitude. The streets are still in the hands of the masses, whilst the representatives of the capitalist system keep their heads low to avoid retribution. But the movement remains as strong as ever. Duhalde is very weak, trapped between the demands of the IMF and those of the masses. As the situation worsens, Argentina is headed for another upsurge.

The doors and windows of the banks remain covered with thick metal and wood sheeting. The areas around the Congress and the Casa Rosada (seat of the government), in the Plaza de Mayo, are cordoned off by fences and protected by a heavy police presence.

In Buenos Aires, the morning rain clouds give way to a magnificent sun that brightens up the evening of Sunday March 24, twenty-six years ago to the day when the Argentine bourgeoisie staged a bloody military coup against its own people. An enormous crowd numbering some 200,000 people, mainly comprised of young people, workers and the unemployed, marches its way cheerfully and enthusiastically along the two kilometres that separate the Congress and Plaza de Mayo, its final destination.

The above scene is a fairly precise description of the social situation in Argentina at the moment and highlights clearly the real balance of forces between the various social classes. The streets are to all intents and purposes in the hands of the masses, whilst the capitalists, their political representatives, the bishops and the generals are having to keep a very low profile in an attempt to escape the masses' retribution.

The economic and social situation in Argentina has been getting worse ever since the momentous events at the end of last year and at the beginning of this one. The initial euphoria of the masses, who thought that with their pot-banging protests, marches, neighbourhood meetings and road blocks they could change everything, has now given way to a more sober and thoughtful attitude as well as a more realistic appraisal of the situation. In other words, they have realised that the enormous amount of pressure exerted by the masses and all the hate directed by the street protests against the bourgeois politicians, business leaders, judges, right-wing journalists, military chiefs and bishops was not enough either to trigger a profound transformation in society or in their living conditions.

The sharp drop in economic activity, the massive hike in prices and the spiralling unemployment rate in the last few months have only added more difficulties to the lives of working class families.

Although these factors have caused a momentary pause in the mass struggle of the workers, unemployed, women, youth and popular assemblies, after the frenetic activity of the first few weeks that followed the popular insurrection in December, the heartbeat of the movement remains as strong as ever.

In addition to the mass demonstration on March 24 against the military coup of 1976 in Buenos Aires (which was joined by huge demonstrations in Cordoba, Rosario and in other major cities), there was a piquetero march in Buenos Aires of around 5,000 unemployed workers from all corners of the country on March 15. The Bloque Nacional Piquetero (the piqueteros' organisation) has approved a new plan of struggle to take them up until the middle of May.

The road blocks (of main roads and freeways) have continued despite being brutally put down by the police as in the north of Salta province, where the police also attacked the premises of local workers' organisations and left-wing political parties and arrested 34 activists. There have been movements led by teachers and public-sector workers, bank workers, health workers as well as the one led by railway workers in Haedo, which managed to annul 144 announced redundancies. In addition to the symbolic example provided by the workers of Cerámicas Zanón in Neuquen and of the textile manufacturer Brukman in Buenos Aires, who occupied their factory and run it under their own democratic control, there has been a wave of protests by workers demanding the payment of unpaid wages, against redundancies and against lockouts organised by employers. In some cases, these protests have also involved the occupation of workplaces, as in La Baskonia metalworks in La Matanza or in the Tigre hypermarkets in Rosario.

The main target of the increasingly frequent "escraches" (protests in which people shout slogans against reactionaries when they are recognised in public places) are the "fathers of the nation" that sit in Parliament, the finance ministry, the newspaper editorial boards, the barracks and the pulpits of churches, many of whom are scared stiff of being recognised if they go out into the streets.

The popular assemblies have continued with their work and activity. On Sunday March 17, the first national meeting of the popular assemblies took place, which gathered together more than 1,000 representatives from assemblies right around the country and put forward plans to organise the latter on a national scale. The most important point was that they agreed to fight for a government of workers and popular assemblies as an alternative to the present capitalist system. The assemblies have spread out to all the main cities and even down to the smallest towns and villages. Some have published newspapers and have organised to fight for concrete demands at the neighbourhood level as well as the more general demands mentioned above.

However, there is still a long way to go. Firstly, there is the issue of the judgement and punishment of those responsible for the killing of 30 comrades on December 19 and 20. Most of these people have still not been caught, let along judged, despite having all been identified. This is shameful especially given that Emilio Alí and Raúl Castells continue to rot in jail after having been imprisoned for demanding a decent meal, whilst the real thieves that have bled the country dry continue to live in luxury in their huge mansions. The Argentine bourgeoisie is keeping them hostage, as they know that their release would trigger a genuine wave of enthusiasm, which could act as a spur to the struggle of the masses and the working class.

In reality, the Duhalde government is very weak. Duhalde, supported by the Peronists and Radicals, is scared of his own people and particularly of the possibility of a fresh upsurge in the mass movement. He is especially worried at the moment because he must implement a very harsh austerity programme, at the behest of the imperialists and the IMF, which involves deep cuts in spending on education, health, housing etc and in workers' wages. This programme is bound to throw hundreds of thousands more into unemployment and its main aim is to make sure that big business, the banks and the multinationals can continue to extract their profits from the hunger and suffering of the workers and the other oppressed layers of society.

There is no doubt that the Duhalde government would not last one day more if it were not for the support of the trade union bureaucrats in the two CGTs and to a lesser extent in the CTA, due to its smaller influence. These union bureaucrats are using the workers' fear of being made redundant to stop them from mobilising against the plans of the Argentine bourgeoisie.

However this "balancing act" cannot go on for much longer and the deepening economic crisis is bound to trigger a fresh upsurge in the masses' struggle, which this time will include the decisive participation of the industrial working class.

The economic situation

Around 4 million workers are now unemployed, bringing the official unemployment rate up to 30%. Within the space of only two months, January to February, more than 200,000 workers joined the ranks of the jobless. The consultancy Ecolatina forecasts that a further 600,000 will be out of a job by the end of the year.

There has been a marked fall in the living standards of working-class families, not only due to the rise in unemployment, but also because of the sudden hike in prices which was triggered by the economic slump, the devaluation of the peso against the dollar and the speculation by importers. The latter are in fact holding back their merchandise in the hope of obtaining more pesos if they sell their goods at a later date when the dollar has strengthened even further.

According to the latest figures, workers have lost 60% of their purchasing power in only two months. Argentina is currently ranked 6th in Latin America in terms of family income, whereas only three years ago it was top of the pile, and now 50% of the population live under the poverty line.

The prices of a whole range of basic products consumed by ordinary families have shot up 40% on average and by 13% in March alone. For example, cooking oil has increased 48%, dairy products 45%, fruit and vegetables 39%, sugar 20% and flour by 300%! In addition to the shortages of pharmaceuticals, the prices of some drugs have spiralled upwards by up to 70%.

The official forecast of inflation for the end of the year is 22%, although more serious observers have suggested that prices might be 60% higher by this time.

From being worth one peso at the beginning of January, the dollar was trading at three at the end of March and almost four in the last few days. Prices have shot up because the value in pesos of exports bought in dollars increases in direct proportion to the fall in the peso's value against the dollar. Argentina's central bank has spent more than 1.1 billion dollars out of its total reserves, estimated at $9 billion, to buy pesos in order prevent the national currency from crashing through the floor, which it only just managed to do. In reality, those most guilty of speculation have been the banks, by buying dollars and boosting its value, and the exporters (rich farmers, Repsol and other multinationals) who have accumulated some 4.5 billion dollars which they have refused to change into pesos with the aim of making super profits by changing them into pesos at a later date when the dollar is worth even more. Only after enormous pressure from the government, did these parasites transform a part of their dollars into pesos - and one can be sure that by changing their dollars for pesos, at a rate of 1 for 4, millions of extra pesos went straight into their pockets!

The severe economic slump affecting the country is clearly shown by the 40% drop in investment. The Duhalde government has admitted that this year GDP will fall 8.5%, although the IMF forecasts a drop of 12%, given that the Argentine economy now has been three consecutive years in recession, something which has not happened since the beginning of the 1930's at the height of the Great Depression.

The state's revenues are shrinking every month. For example, tax revenues tumbled 19.1% in January compared to the same month in 2001, 20.3 % in February and 12% in March.

The fall consumption has had a massive impact on the use of public services. Passenger traffic on intercity trains has contracted 52.7%, on suburban trains by 19.4%, on airlines by 31.6%, on buses by 16.3% and on the underground by 8.6% whilst airfreight has dropped 35.8%. Power generation has also slipped 7.5% in the period up to March.

Imports in the first three months of the year have fallen 50% in comparison to the same period in 2001. This is highly significant as three quarters of Argentine imports are capital goods, i.e. the machinery, equipment, etc - essential to keep industry running. It is estimated that 85% of Argentine industry consumes imported products. This gives a clear measure of the extent of the fall in the country's industrial activity: -17% in the first two months of the year.

The situation of small businesses is catastrophic. Figures show that by the first half of March, 62,500 had gone to the wall whilst 70% of those remaining were heavily in arrears due to non-payment of taxes.

How is such a situation possible? The reasons have already been explained in other articles: suffice to say that in addition to the heavy dependence of the Argentine economy on the ups and downs of the world economy and foreign capital, the Argentine bourgeoisie, which is weak, backward and parasitic and unable to compete with its foreign rivals, has decided to place its capital outside of the country in search of more profitable yields. For example, figures show that the amount of Argentine capital leaving the country is around 130 billion dollars, which is equivalent to nearly all of the country's foreign debt.

Once again, the private interests of a small wealthy elite, big business and the banks are forcing millions of workers, women and youth, who are the only real sources of the country's wealth, into more poverty and suffering and worsening living conditions.

The Duhalde government and the IMF

Due to the parasitic and greedy capitalists, both foreign and Argentine, who are pulling their capital out of the country and the resulting massive drop in productive investment and tax revenues, making it impossible for the state to honour its spending commitments, and with the harsh reduction in household consumption due to the drop in purchasing power, Argentina's economy needs an immediate injection of capital to stop it from melting down. The Argentine bourgeoisie and the Duhalde government are hoping to convince the IMF to lend fresh money in order to stop the impending disaster. However, the imperialists, through the IMF, have tied draconian conditions to any future aid. Duhalde is trying to frighten the IMF with the threat of "social destabilisation". However, the IMF has replied that this is not its problem. Some have blamed the IMF's tough position on the pressure applied by American capitalists who are keen to see the situation worsen so that their local and European competitors close down their businesses in Argentina leaving the playing field clear for US corporations to step in to replace them. Also it is clear that the IMF's top officials were not very happy that a country like Argentina decreed a unilateral moratorium on the payment of foreign debt, as other countries could follow this example. They therefore decided to teach Argentina a lesson, "to encourage the others".

The IMF's first demand was that the budget for 2002 cut the deficit drastically, which had been set at 3 billion dollars. However, this budget, which had been approved by the Argentinean Congress, has absolutely no credibility as it is based on inflation, economic growth and tax revenue targets that are completely out of touch with reality. For example, the budget deficit has already reached 1.5 billion dollars in the first two months of the year, i.e. half of the target for the whole year!

The other conditions that the IMF has tied to the provision of more money are the following:

  • The provinces must reduce their debt by 60% and they must stop issuing their own currencies to cover their expenditure.
  • Free flotation of the dollar.
  • Reform of the financial system in order to privatise what remains of the state-owned banking system and to improve "legal protection for foreign banks". In other words, more impunity for their shady deals.
  • Renegotiation of the tariffs charged by the privatised public service companies, so that the government accepts the hikes in these tariffs demanded by these companies, which are almost all in the hands of multinationals. These price rises are scheduled for May and June.
  • The waiving of the Bankruptcy Law. This law, which was introduced as the end of December, suspended all asset seizures and attachments for 180 days, as well as redundancy plans. It was passed in order to obtain the trade union bureaucracy's support for the government.
  • The waiving of the "Economic subversion" Law. In theory, the aim of this law, which dates back to 1974, is to fight boardroom corruption in companies and banks, bribery, etc. This law, which up until recently was relatively harmless, found a new lease of life when in the last couple of months a few judges decided to investigate top management in a number of the country's businesses, banks and multinationals who have been linked to corruption scandals involving the privatisation of publicly-owned companies, capital flight and the decapitalisation of certain companies etc.
  • Finally, the renegotiation of the foreign debt, with the possibility of a fresh loan if the measures cited above are implemented.

In essence, this is a declaration of war against the working class, which must bend down and lick the boots of this scum, which has already exploited working class families down to their very marrow in the last few years and still wants more, after having accumulated tens of billions of dollars throughout this whole period.

In other words, on top of the massive levels of poverty that already exist in Argentina, workers must accept more job losses, huge hikes in the tariffs charged by public service companies, that top management escape scot-free after having triggered the country's economic collapse and even more drastic cutbacks in spending on social services. The IMF says that only by doing this will Argentina be able to raise enough funds to pay off its foreign debt. However, the capitalists created this debt load in the first place for their own profit and therefore working-class families have absolutely no responsibility for it.

The Duhalde government has already stated that it is prepared to implement this programme. It has only opposed two of the IMF's additional conditions: tuition fees for public universities, which are currently free of charge to students, and the sacking of 450,000 of the country's 2 million civil servants. Clearly, Duhalde, as a loyal servant of the imperialists, told the IMF that it needed to keep a sense of proportion and recommended that it water down these last measures as their application would set two significant sectors of the population - the civil service and the students - on a war footing.

As a further demonstration of the complete subservience of the Argentine bourgeoisie to their imperialist masters, Duhalde has accepted the US government's "request" for Argentine troops for the so-called "Plan Colombia" and to vote against Cuba in the UN's Human Rights Committee to be held in April, in exchange for the promised money.

The social situation

Due to the gravity of the social situation, the "corralito" (freezing of bank accounts) is less of an issue now, mainly because only 10.5% of Argentineans were affected by this measure. It is estimated that the banks owe individuals 66 billion dollars, yet the entire banking system has stated that it has only 12 billion dollars in cash. Therefore, if they were to allow complete access to savings, the whole financial system would collapse. Under capitalism, this situation is insoluble. As Marxists, we demand that working-class families, pensioners and small savers should have complete access to their savings currently locked up in the banks and we support the proposal adopted by the popular assemblies that savings of up to 100,000 dollars should be released immediately. However, in order to do this the nationalisation of the banks under workers' control is indispensable. Although some savers have been able to recoup their savings by going to court, the Duhalde government has now stated that it will block any further legal proceedings to this end.

The Argentine government is between the hammer of the pressure exerted by the Argentine and foreign capitalists and the anvil of the masses' growing discontent that threatens to erupt into a fresh uprising at any moment.

In a desperate search for a way out of the crisis, the government announces new measures each day to satisfy both classes and then the next day decides to cancel the measure or water down its implementation. The Duhalde government has announced that in the next few weeks it will launch a social programme to give 150 pesos per month to millions of families with no incomes at all. Not only has this type of plan been announced umpteen times before, it will solve nothing. The government has also proposed increasing taxes on the exports of those companies that have gained by the devaluation of the peso (in the agricultural, livestock and oil sectors, etc) in order to meet state spending commitments. However, this type of measure is just a stopgap, and will not be able to generate enough resources to boost the country's productive apparatus.

Furthermore, even if the IMF does release some money, it will only be used to pay a part of the foreign debt and will have no tangible effect on the economy as a whole. According to S. Porzecanski, head of emerging markets at the bank ABN-Amro: "[the IMF's money] will not even go to Argentina, as it will be used to pay what the country owed to the Fund itself [some 8 billion dollars this year]." (Clarín, March 11, 2002)

The government has also approved a list of 243 drugs that pharmacies must sell at the same price offered in December. However, specialists have criticised this proposal as they say it will only affect the listed brands and that it neither covers dosages or similar drugs marketed under different brand names nor state-of-the-art medications for certain diseases such as diabetes, AIDS or cancer. In any case, these planned price cuts will not apply to prescription drugs. The large pharmaceutical companies are speculating by squeezing the supply of drugs to pharmacies and hospitals in order to force prices up. Furthermore, even before the present crisis, drugs in Argentina were the most expensive in all of the MERCOSUR countries (Brazil, Uruguay and Paraguay) - up to 270% dearer on average. Today, never has the demand for the nationalisation of the pharmaceuticals companies and multinationals under workers' control been more relevant, so that they may be used for the good of the community and working families and not to generate profits for a handful of speculators.

The situation in the education system is also very worrying and has put education workers, parents and the popular assemblies on a veritable war footing. There have been sackings of teachers and auxiliary staff, a freezing of wages (when they have been paid at all) as well as the closure of certain lecture halls and schools with the excuse that there are not enough pupils and students on the roll. This year 730 million pesos have been cut from the country's education budget, of which 500 million from the province of Buenos Aires alone. As a consequence of the crisis affecting working-class families, many children have not been able to go to school because they have no shoes, or because grants have been reduced or because they have to support their families by working, or finally because the canteens have been closed down in some schools. For example, in Buenos Aires, secondary schools alone have seen a 25% drop in the number of pupils attending classes, compared to the previous school year; i.e. 170,000 teenagers are not attending school.

Due to the lack of supplies in the shops and the lack of cash, many working-class families have been forced to barter between each other. This is not the solution to the current crisis despite the praise that this system has received from middle class "trendies" in the West. Each product is priced in créditos. One crédito is worth half a peso. However, it has been found that when products are bought and sold using this system, the value of these products in créditos is usually higher than their prices in shops! Secondly, this method only helps to share out poverty and in no way represents a system of exchange that is superior or more advanced than the one that is the norm in capitalist society.

The political situation

In order to cleanse the political system, the government has hastened to announce its plans for "political reform", amongst which figure a reduction in the expenditure of various state institutions and in the perks enjoyed by politicians, judges and top civil servants. The aim of this is to buy time and procrastinate in order to wear out the masses' enthusiasm for change.

The bourgeoisie is perfectly aware of the fact that the Duhalde government is on the ropes. It would only take another mass mobilisation to knock it completely out. The ruling class's problem is that there is no-one else capable of implementing its policies, which will inevitably meet fierce resistance from the workers and unemployed. This is why it must stick with Duhalde for as long as possible. It cannot possibly risk calling early elections, unless it is really forced to. Duhalde himself said the following: "...unfortunately, nobody can claim to command enough support here. Read the opinion polls, no leader has more than 10%. The level of disgust with the system is enormous, but we must carry on..." (Clarín, March 24, 2002) Duhalde has already hinted at who will be his future successor in the 2003 elections: Carlos Reutemann, governor of Santa Fe province.

Peronism is starting to crack open. For example, "leftist" populists, such as Kirchner (governor of Santa Cruz province) and Rodríguez Saá, have already started to throw their weight around, but the bourgeoisie will not call on these characters just yet. In the current circumstances, they would only pour more oil on the fire with their demagogical proposals, which in any case would be unviable under capitalism

On the other hand, another sector of the bourgeoisie is quietly preparing a "centre-left" alternative based on certain layers of the middle class and more backward sectors of the working class around organisations such as Agrupación por una Repúblicas de Iguales or ARI ("Group for a Republic of Equals") and sections of the Frepaso and Frenapo parties. The champion of bourgeois populism, Elisa Carrió, has taken the head of this movement. Her speeches are being increasingly relayed by the nation's media, particularly her call for capitalism with a "human face". Due to her complete lack of economic programme, she has chosen the "fight against corruption" as her central issue, although this sort of rallying cry has become routine in Argentina these days and actually commits her to doing nothing much at all. The bourgeoisie will use these so-called "left" Peronists and groups such as ARI and others to try and block the mass movement if it tries to challenge the very existence of the capitalist system itself, before opting for a coup d'état, which in the short term has been completely ruled out due to the weakness of the forces of reaction in Argentine society at the moment.

The most popular figure on the Left at the moment is undoubtedly Luís Zamora, who is a member of parliament for the group Autodeterminación y Libertad ("Self-determination and Liberty"), and who has great deal of political and moral authority not only amongst the working class but also amongst the poorest layers of the middle classes. Consequently, most opinion polls are giving him the highest level of support. He recently called a press conference to relaunch his political programme that brought together 1,000 sympathisers. However, Zamora's weakness lies in the fact that he does not have a clearly defined political programme. He says that this must be drawn up "from below". However, "below" has already clearly said what it wants: nationalisation of the banks, big business and the monopolies under workers' control, as has been declared in hundreds of popular assemblies up and down the country.

Unfortunately Zamora is spreading a whole series of confused political ideas, which are in some cases very backward and which could seriously backfire on him at a later date, such as that parties or leaders are not needed and that the most adequate form of organisation is a "horizontal" one. We completely agree that there is no need for bourgeois parties or leaders that swindle working-class families. However, this is not the case of the left-wing parties that have been fighting with the working class and other oppressed layers of the society for many years now. These ideas suit the bourgeoisie very well as they would prefer to maintain the working class in an atomised, scattered and somnolent state with these semi-anarchist, "anti-organisation" prejudices, which are fine for the petit bourgeoisie but in no way meet the requirements of working-class families.

On the contrary, we are in favour of these "leaders" being elected and subject to the right of immediate recall and that no leader earn more than the average wage of a qualified worker as a means of avoiding careerism and corruption within our ranks. This is precisely what we want and this is precisely the type of organisation that the Argentine working class needs, coupled with a workers' government elected democratically by the popular assemblies.

The tasks in the workers' movement

The piquetero movement has also been affected by the lull in activity of the last few weeks, which is quite understandable for the reasons that we have outlined above. Consequently, the Workers' National Assembly scheduled for April 2 and called by the previous National Assembly in February and by the Bloque Nacional Piquetero, has been postponed until May 15 to give the organisers more time.

One of the main demands of the piquetero movement has been for the so-called "Planes Trabajar" which consists of a benefit of a miserable 160 pesos a month, which is just enough to stop you from starving. It is perfectly correct to make such a demand, but it must be explained to unemployed workers that this is no real alternative for their families, despite the fact that it seems to be the main aim of the piqueteros' organisations, the CCC and the FTV-CTA. Quite correctly, the Bloque Nacional Piquetero and the CTD "Aníbal Verón" are also demanding that real jobs be provided and that 100,000 posts be created immediately. However, here again, this can only be implemented by genuine workers' government. This is why the piquetero movement must turn towards the employed worker's movement to involve it in its struggle.

All the evidence suggests that we are on the brink of a fresh upsurge in the mass movement. In reaction to this, the Peronist leaders of the two CGTs are bound to run frantically to Duhalde begging him to decree an increase in workers' wages in order to compensate for the rise in prices. Duhalde has already declined to do this. These trade union bureaucrats are increasingly finding themselves with less room for manoeuvre to keep the heavy battalions of the working class in the industrial and transport sectors in check.

The piqueteros organisations such as the CCC and the FTV-CTA must break with this anti-working class government, because if they do not, there will inevitably be splits in their ranks and they will be overtaken by the struggle from below.

As day follows night, section after section of the working class will be forced into struggle and their leaders will either have to lead the movement or risk being completely overtaken by its unstoppable force as it surges up from beneath them.

The parties of the left must carry out a continuous campaign amongst the grassroots of the CGT and the CTA explaining these ideas insisting on the need for a general strike against the plans of the bourgeoisie and the IMF and on the eventual necessity of forming a workers' government. They must insist on the need to create Factory Committees in each workplace and workshop in order to lead the struggle for a whole series of common demands amongst which; the monthly indexation of wages to prices; not one redundancy and the occupation of any factory which sacks workers or closes down - as demonstrated by the comrades at Zanón and Brukman. These Factory Committees must be linked up in each town and city and then on a provincial and national level, like with the piqueteros and unemployed workers' organisations and the popular assemblies. This will be the embryo of a new society.

The main job of doing this falls to the trade unions (once they have rid themselves of their bureaucracies) and the working class activists in the left parties, who must organise a national United Front tendency within the CGT's and CTA in order to create an opposition that offers an alternative leadership, once their ideas have gained mass support amongst the grassroots membership.

The tasks that must be carried out by the Argentine working class, and especially its vanguard within the left parties and the piqueteros organisations, are tremendous. The situation is getting worse day by day and the working class will learn very quickly as it is confronted by events. The first phase of the Argentine revolution saw the creation of the framework of the organs of struggle on a national level, such as the popular assemblies and the Bloque Nacional Piquetero. The second phase will gather the vanguard and the most advanced sections of workers who are most prepared to organise and lead the masses in the fight for worker's power and for the socialist transformation of society, which is the only alternative for working class families and which will save them from the barbarity and degeneration offered by the continuation of the capitalist system.

April 8, 2002

This article is translated from the Spanish original: El poder obrero - única alternativa

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