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Argentina
The struggle continues

January 10, 2003 | Page 8

LEE SUSTAR looks at the crisis in Argentina and the fight for an alternative.

TENS OF thousands of Argentinians marched on December 19 and 20 to mark the mass uprising a year ago that overthrew a despised government. The rebellion--known as the "Argentinazo"--was against the impact of free-market policies pushed by Washington and the International Monetary Fund (IMF) and implemented loyally by Argentina's rulers.

Today, Argentina is once again headed for crucial political battles as it enters the fifth year of a catastrophic economic crisis. And with much of the global economy stuck in recession or slow growth, it's clearer than ever that Argentina's misery is part of a world crisis.

While the situation has stabilized somewhat in recent months, the economy still shrank by an estimated 12 percent in 2002. The country that once had the highest standard of living in Latin America is enduring perhaps the greatest collapse of an industrial society since the Great Depression of the 1930s.

Unemployment is at least 20 percent. Government statistics show that by June 2002, half of the country's 37 million people were living under the poverty line of $3 a day. Millions saw their savings nearly wiped out when the government froze bank savings accounts a year ago and the Argentine currency, the peso, was devalued by two-thirds.

The resulting inflation has priced basic foods out of reach for half the population. Some 13 percent of the population suffers from malnutrition, and a recent study found that an average of 27 children under five die each day from causes related to hunger. This in a country that's one of the world's biggest producers of beef and wheat.

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JUST A few years ago, Argentina was the star pupil of the IMF and its masters in the U.S. Treasury Department. By privatizing key state-owned companies such as telecommunications, oil and airlines and pegging its currency to the U.S. dollar, Argentina embraced the free-market policies known as neoliberalism faster and more fully than any other country in the world.

Ironically, Carlos Menem had won the presidency in 1989 by campaigning against such policies. As the candidate of the Justicialista Party, founded by right-wing populist president Juan Perón in the 1940s, Menem had the backing of both wings of the country's main union federation, the CGT.

He bought off union leaders by giving them a share of the proceeds in a corrupt privatization process that enriched Menem and his Mafia-connected inner circle. Opposition from public-sector unions led to a split in the CGT and the formation of a new federation, the CTA, in 1992.

Rapid economic growth in the early 1990s helped get Menem re-elected. And in 1998, Bill Clinton showed off his prize pupil with a joint appearance with Menem at the IMF-World Bank annual meeting in 1998.

By this point, foreign bankers rattled by the East Asian financial crash of 1997-98 had already tightened lending and pushed Argentina toward a recession that worsened dramatically after Argentina's main trading partner, Brazil, devalued its currency.

As Menem's second term came to an end, rising bitterness helped the center-left candidate Fernando de la Rúa capture the presidency in 1999, with the support of parties tied to the CTA. But de la Rúa offered more of the same.

Following IMF dictates, he cut federal government spending by 10 percent over the next two years to help repay Argentina's rising foreign debt. But U.S. and European banks that had poured in money to take advantage of privatization now turned their backs--even though Argentine debt levels were less than those of European countries.

The IMF promised to help--as long as de la Rúa cut wages and social programs still further. The IMF witch doctors believed that if Argentina's government budget was cut--no matter what the social pain--foreign investors would return, and the debt would be repaid. "But that premise is as silly as imagining that a change in our [U.S.] government's deficit would lead investors to put more money into fiber optics, when there is already a vast overcapacity," wrote Joseph Stiglitz, the former chief economist of the World Bank turned critic of the IMF.

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IF ARGENTINA'S current President Eduardo Duhalde has so far resisted the IMF's latest demands, it's only because of pressure from the mass movement from below.

Elected by Congress after last year's uprising toppled de la Rúa and four other short-lived presidents, Duhalde has already been forced to call new elections for April--months earlier than planned--and drop out of the race.

Since the late 1990s, the movement from below has been spearheaded by the struggles of unemployed organizations, known as piqueteros, or picketers. Their militant tactics, such as blockading major highways, won concessions, such as small public-works projects and immediate food aid.

Finally, in December 2001, the middle class, outraged over the freeze on bank accounts, took to the streets of Buenos Aires in the mass demonstration that ousted de la Rúa. The protests gave rise to Popular Assemblies, neighborhood-based councils whose activism ranges from aiding the local poor to mobilizing for protests.

Meanwhile, workers at more than 100 closed-down factories have occupied them and restarted production under their own control. The struggles of the organized working class have been held back, however, as CGT union leaders continue to support Duhalde.

The breakaway CTA federation, by contrast, has moved to the left and formally launched a new social movement at its congress in December. It embraces a left-wing program of reform, calling for the re-nationalization of privatized industry and "shock redistribution" of wealth from the rich to workers and the poor.

This is a welcome and important break from the free-market dogma of neoliberalism. Nevertheless, such proposals sidestep the central question--repudiation of Argentina's crushing $141 billion foreign debt. And they assume that "loyal" nationalist capitalists would carry through a program in the interests of workers and the poor--when in fact virtually all of them supported Menem's austerity.

Big business is much likelier to once again support Menem, who is running for reelection on a law-and-order campaign. This is an appeal to the right wing that ran the country during the 1976-83 military dictatorship, when death squads murdered and "disappeared" 30,000 people, including leading socialists and union activists.

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ARGENTINA'S CRISIS is not an isolated one, but the extreme result of the policies of privatization, deregulation and "flexible" labor practices of corporate globalizers everywhere--enforced by Washington's economic and military muscle. As the socialist Argentine economist Claudio Katz wrote recently, "The crisis doesn't arise exclusively from neoliberalism. It's also the result of the imperialist polarization that characterizes capitalism today."

Those arguing for a socialist alternative today are deeply involved in the mass movements, but are organizationally fragmented. Some dismiss the CTA union federation as "reformist," rather than try to influence its rank-and-file members. Most are calling for a boycott of the presidential elections on the grounds that they are a "trick," since congressional seats won't be up for a vote.

But an opinion poll last year found that former Trotskyist Luís Zamora would be the second-most popular potential candidate--although he's said that he won't run. This approach would leave mainstream and moderate left candidates unchallenged in the election--and could therefore be a missed opportunity to use the campaign to argue for socialism.

Given the scale of the crisis--and the revolutionary potential of the mass movement--putting forward a socialist alternative in Argentina is critical. The coming struggles will have an impact across Latin America and the world.

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