The Argentine Rebellion

by Roger Burbach

Z magazine, April 2002


Argentina is erupting in an unprecedented social upheaval that could pose a new threat to the international financial system and transform the country's politics. With an international debt of $140 billion Argentina is the first country in years to formally default on its loans. In Buenos Aires, the popular movement has taken to the streets since mid-December with the slogan, "Que se vayan todos," or "everyone has to be thrown out." It is a call for the removal of the political establishment, including the current president, Eduardo Duhalde, who took office in early January. Along with Duhalde, the popular repudiation extends to the two main political parties and alliances that back the government, the Supreme Court, the national congress, and the financial interests that dominate the country.

As Jose Luis Coraggio, the rector of a university in Buenos Aires who is active in the opposition movement, declared: "The repudiation of the politicians and the economic elites is complete. None of them who are recognized can walk the streets without being insulted or spit upon. It is impossible to predict what will happen. Next month, or next week, Duhalde could be deposed, we could be in a state of chaos, or we could be building a new country that breaks with neo-liberal and capitalist orthodoxy."

Although Argentina captured the world's attention with the massive social explosion in late December that ushered in five presidents in less than two weeks, the crisis had been building for years. Its foundations are in the neo-liberal model that Argentina adopted in the early 1990s under Carlos Menem who served as president from 1989 to 1999. The head of the old Peronist movement, or Justicalista party as it is now called, Menem, along with government and party bureaucrats, grew rich as national companies ranging from petroleum and airline enterprises to telephone and water utilities were sold off to foreign interests.

By the mid 1990s, Menem had tied the country firmly into the international financial system by pegging the Argentine peso to the U.S. dollar at the exchange rate of one to one. A rentier class dominated the country as Argentina's productive and industrial capacity was gutted. With the fixed exchange rate Argentine exports became uncompetitive in international markets while cheap imports flooded the country. Even Argentine's once dynamic agricultural sector went into a state of decline. Today cereals are the nation's only significant source of foreign exchange, as its once world-class beef industry has lost its major export markets.

The massive demonstrations that erupted in December are commonly referred to as "caserolazos," or protests in which demonstrators bang on empty pots and pans symbolizing their inability to purchase the basic necessities of life. In Buenos Aires, the caserolazos usually occur every Friday when thousands of demonstrators descend on the historic Plaza de Mayo, the site of the presidential palace and the national congress. Many of the demonstrators march under the banners of the barrios they come from where they gather in popular assemblies. These barrio assemblies are rapidly becoming autonomous centers of community participation that include a wide variety of groups and individuals, ranging from unemployed and independent trade unionists, to human rights organizations and members of left or non-mainstream political parties.

Smaller, but very militant caserolazos have also been organized against the banks. The middle class in particular is furious with the banks, as the government has frozen long-term savings accounts, many of which were in dollars. Starting in the middle of 2002 the government promises to repay the deposits-which total close to $20 billion dollars-in 18 monthly installments in the national currency that will be devalued by at least 40 percent. While proclaiming the government doesn't have the money to pay off the savings accounts, Duhalde has reneged on his early promise to not pay back the international debt. He has also announced financial policies that amount to a currency subsidy for large Argentine corporations when they repay their foreign loans. It is small wonder that . many middle class demonstrators, sometimes in suits, smash bank windows and spray-paint slogans on bank walls such as "thieves," "traitors," and "looters." In addition to mobilizing demonstrations, the popular assemblies in the barrios often take on local issues and concerns. In one barrio for example the assembly organized pickets to prevent the authorities from closing down a baker who could not afford to pay his rent. Other local assemblies are urging people who own their homes not to pay property taxes, to instead turn the revenue over to hospitals in their area that are in desperate need of medical supplies. The assemblies also take up discussions of international issues. As Lidia Pertieria, an assembly organizer notes, "one of the rallying cries coming from our communities is "no more foreign loans." New loans only mean more swindling and robbery by our government officials."

The popular assemblies are emblematic of the upsurge in grassroots organizing that is occurring throughout the country. The first major protests against neo-liberal government policies began in the interior of the country in 1996 and 1997 when unemployed workers called "piqueteros," or picketers, blocked major highways demanding jobs. By 2001 the blockading of strategic commercial arteries had spread to the entire country. The piqueteros are loosely organized in the Movement of Unemployed Workers that held two national assemblies in August and September that brought together a variety of social and nongovernmental organizations along with the unemployed.

The piqueteros are notable for their participatory leadership. They usually negotiate in large groups or assemblies with local and regional governmental leaders to demand publicly financed jobs in exchange for the lifting of blockades. Bargaining is done in open groups to prevent the government from engaging in what is called "clientalism," a long standing practice of Argentine political leaders in which they negotiate with a handful of representatives who are separated from their membership and promised jobs or given bribes in order to sell out the rest of the movement. The Peronist party, which was founded in the 1940s with a large working class base, became particularly astute at corrupting the labor movement by providing perks and special favors to labor leaders in exchange for their support and allegiance to the party.

The National Front Against Poverty, with over 60,000 members, is another organization that has moved into the spotlight with the economic crisis. It was established in 1999 by a group of economists, sociologists and trade unionists to propose alternatives to the neo-liberal order. In their first initiative, they collected over a million signatures for a plan that was presented to congress and dubbed "shock redistribution," an ironic reference to the economic shock treatment imposed on many third world countries by the International Monetary Fund. In contrast to the IMF, this redistribution plan argues that the only way to reactivate the economy is by putting funds into the hands of the country's poor, not by slashing social programs and implementing financial policies that favor the rich. In 2000 the Front set up polling booths around the country and held a referendum in which over 3 million people voted for the redistributive plan.

As Norma Filgueiras, one of the Front's organizers who participates in the popular assemblies notes: "Today with 40 percent of the country's 35 million people falling below the poverty line we are discussing real alternatives that could help us at the community level." A widely distributed four-page pamphlet by the Front points out in easy to understand language how neo-liberal economic policies can be reversed by funding local housing projects, by helping small enterprises produce many articles (including medicines) that are currently imported, by renationalizing industries that were sold off by corrupt government officials, and by encouraging economic solidarity and cooperation among individuals and groups rather than "free market" competition.

During the four years that Argentina has been in economic recession an alternative barter economy has emerged. It is estimated that over two and a half million people are participating in local exchanges called "nodos." People take their products or commodities to the exchanges-fruits, vegetables, chickens, jams, clothing, etc.,-where they get credit slips they use to pick up products they need in return. One local textile manufacturer who was on the verge of bankruptcy called together his workers and told them that since he could no longer pay many of their salaries he would instead turn over blankets produced in the factory which the workers could either sell or take to the local nodos to exchange for other commodities.

As Ricardo Malfe a psychologist on the social science faculty of the University of Buenos Aires commented: "Who knows what this will all lead to. In World War II Argentina was cut off from international markets and we had the biggest manufacturing boom in our history. Argentines, especially the middle classes, have been noted for our individualism and narrow self-interest mentality. Perhaps this crisis will force us to reshape the very way we view ourselves, run our economy and organize our lives."

This, of course, would be a positive scenario for the popular movement in Argentina. Military intervention appears to be out of the question for the moment as the military is ranked even lower than the political class in opinion polls. This is a consequence of the human rights movement and particularly the "Madres de la Plaza de Mayo," a group of mothers who began to march regularly in the plaza in the late 1970s to protest the military's assassination of their sons and daughters in what is called Argentina's "dirty war." Today the Madres are a critical part of the popular movement against the political and economic elites.

There are, however, long-term scenarios discussed in Argentine political circles that suggest a civic-military alliance with the backing of the national bourgeoisie. Carlos Menem, who led the country into the neo-liberal nightmare, is thought by many to be scheming a political comeback against Duhalde. Menem would be the coalition's primary political mover, although not its titutlar head since he is prevented by the constitution from holding the presidential office again. But for now it looks like such an alliance is checkmated as all of its potential members are discredited by a mass movement that would not tolerate a return of the neo-liberal order that sold the country out to foreign interests and precipitated the country's economic catastrophe.

For the moment the piqueteros, the caserolazos, and the popular assemblies are driving the political process, although where they will be able to take the country is uncertain. Setting aside rosy and totally unrealistic economic projections by government officials, virtually no one sees an early end to the deep economic crisis, meaning that social and political instability will prevail for some time to come. As one political commentator stated, "the only certainty in Argentina is that the future is uncertain."

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