International Socialist Review, March–April 2002

Tom Lewis

Argentina: The next step

From International Socialist Review, Issue 22, March–April 2002.
Downloaded with thanks from the ISR Archive.
Marked up by Einde O’Callaghan for the ETOL.

TIME HAS become the enemy of Argentina’s president Eduardo Duhalde since he took office in January. Duhalde desperately needs new loans from the International Monetary Fund (IMF) in order to quiet ongoing social unrest. If the timing is wrong, or if the IMF chooses not to deliver, Duhalde’s government will collapse under the weight of mass protests, just as surely as Fernando de la Rúa’s did last December.

If time is Duhalde’s nemesis, it favors his opponents for the moment. The social movements and left political parties are building crucial networks of solidarity and action between unemployed and employed workers, as well as among the more than 150 neighborhood assemblies. But activists who are already organized need more time to win the largest trade unions–whose leaders support Duhalde–to a united front. A mass revolutionary party also has yet to appear, and it can only emerge from further experiences of joint mass struggle.

Duhalde’s dilemma

Argentina’s rulers presently confront a foreboding economic and political landscape. Unemployment is expected soon to hit 30 percent of the active population. Close to 40 percent of the population now lives below the poverty line, with poverty in some areas of greater Buenos Aires reaching as high as 70 percent to 80 percent. The peso now trades at a rate of more than two to the dollar, when only three months ago it was pegged at one to one. The devaluation has gutted the savings and slashed the living standards of most Argentineans.

Daily demonstrations denounce the government for its unfulfilled promises of jobs and food, while the return of inflation further erodes the purchasing power of workers and their families. Road blockades continue throughout the country. For example, an “indefinite siege” by dairy workers at 50 milk processing plants in Buenos Aires, Córdoba, and Santa Fe has disrupted distribution and led to shortages of fresh milk in all the main cities.

Aside from the possibility of its overthrow by angry masses, the greatest disaster looming for the Duhalde government is the potential collapse of Argentina’s financial system. In the second half of last year fully $17 billion–25 percent of all deposits–disappeared as the result of several runs on the banks. New restrictions on withdrawals, designed to limit the outflow of dollars, have merely slowed it to about $1 million per month. According to the Washington Post, money watchers describe the banking system as “a ticking time bomb.” The cost of devaluation, and mushrooming bad debt in both the private and public sectors, mean that as many as “100 of the top 200 financial institutions may fail or merge to survive in coming months.”

The privately owned bank closest to implosion is Banco Galicia. The Argentine Central Bank recently earmarked $3 billion to help it and other troubled financial institutions avoid bankruptcy. The Central Bank also announced that it will direct another $8 billion toward repaying foreign banks. Yet such decisions do not please everyone. “Reform” rather than “bailout” of the domestic banking system is what the IMF has demanded as a condition for restarting loans to Argentina. And raking off money to satisfy greedy foreign bankers does nothing to placate protesters in the Plaza de Mayo.

Duhalde and his administration are presently sandwiched between the demands of the mass movement and those of the IMF and U.S. imperialism. Duhalde has wooed the IMF and U.S. Treasury secretary Paul O’Neill by allowing the peso to float freely against the dollar and by winning passage of a 2002 budget that calls for another 14 percent cut in government spending. He has also succeeded in negotiating reductions in federal transfers to the provinces, which the IMF has sought for more than a year.

But IMF and U.S. officials remain wary of even these steps. The agreement with the provinces requires the federal government to assume the provinces’ hefty debt burden without establishing penalties for provincial governors who overspend their new budgets. Duhalde has promised, too, that he will funnel into social programs the savings he hopes to achieve by eliminating 25 percent of the seats in provincial legislatures and by canceling midterm elections. Duhalde’s budget further levies a new tax on exports, which is also supposed to help finance social spending. Naturally, all of these provisions raise the hackles of neoliberal ideologues within the IMF.

O’Neill and the IMF in fact remain openly skeptical about Duhalde’s budget. The budget optimistically forecasts 15 percent inflation and a 5 percent drop in Gross Domestic Product for 2002, at the same time as it projects a fiscal deficit of only 3 billion pesos. Yet many analysts expect the economy to shrink by as much as 10 percent, and they expect the deficit to balloon as high as 6 billion pesos if tax revenues continue to fall. Virtually everyone predicts a higher rate of inflation.

Feeling the pressure of social turmoil, Duhalde issued an astonishing set of promises at the end of the first week in March. With major trade union leaders standing by his side, Duhalde announced, “In May or June we are going to throw a party because in Argentina we are going to end this recessionary period.” “By July 9,” he went on to declare, “every household in the nation will be receiving a minimum income that will enable people to subsist.” Clearly, Duhalde is betting on a generous and swift IMF intervention.

Such extreme pronouncements not only reveal Duhalde’s own sense that his time grows short in the absence of renewed IMF aid. They also raise to extraordinary heights the social expectations of ordinary Argentineans–and thereby increase the likelihood of Duhalde’s ouster should he fail to deliver.

Toward a united front

On the same day that Duhalde promised to end the four-year recession by May or June, four columns of marchers converged on downtown Buenos Aires. Metalworkers, health workers, small business owners, and taxi drivers halted traffic for several hours while they aired demands for everything from jobs, to the defense of national industry and the public health system, to the end of the government’s freeze on bank accounts held in dollars.

Although the pace of demonstrations has relaxed since mid-January, the number of protesters in the streets remains high. Vibrant meetings of the asambleas populares (neighborhood assemblies), involving as many as 300 activists, have continued on a weekly basis, and the total number of neighborhood assemblies has steadily increased. Both the neighborhood assemblies and the asambleas piqueteras (the assemblies of unemployed workers) successfully organized demonstrations that mobilized 10,000 people and more in early February. These events paved the way toward two mass meetings in mid-February, out of which came a set of common demands and a coordinated plan of struggle for the month of March.

On February 16, more than 1,600 delegates took part in the National Assembly of Employed and Unemployed Workers (Asamblea Nacional de Trabajadores Ocupados y Desocupados). This is the national meeting of the piqueteros, or unemployed workers, whose main weapon of struggle has been the road blockades. The assembly began with a public act at which representatives of the neighborhood assemblies and left political parties were also invited to speak. It ended with a unanimous vote to approve militant goals and a schedule of mass mobilizations. (The assembly’s final statement and resolutions are printed immediately following this article).

Until recently, suspicion had characterized relations between the piqueteros and the mainly white-collar caceroleros (pot-banging marchers) who comprise the neighborhood assemblies. Yet, on this occasion, the most frequently raised chant was “Piquetes y cacerolas, la lucha es una sola” (“Picketing and pot-banging, it’s all one struggle”). Revolutionary party flags and banners, whose presence was regularly discouraged in an earlier phase of the movement, were also welcomed into the overall festivity. More than 8,000 workers participated in the assembly’s general session.

On February 17, the day after the piqueteros’ national assembly, some 3,000 activists from the neighborhood assemblies gathered at Parque Centenario (Centenary Park) in Buenos Aires for the weekly meeting of the Inter-Neighborhood Assembly (Asamblea Interbarrial del Parque Centenario). Centenary Park serves as a coordinating body for the otherwise isolated neighborhood assemblies. Any member of a neighborhood assembly can attend the Centenary Park events, and so numbers are usually high.

Among the resolutions debated and approved at the February 17 meeting were ones calling for protests against price-gouging supermarkets, mobilizations against the banks, emergency response teams to stop evictions, strike support measures, and the recovery of public spaces. Crucially, the Interbarrial endorsed the piqueteros’ plan of national struggle. It gave a standing ovation to the official delegation of the Asamblea Nacional Piquetera and enthusiastically committed itself to the united struggle.

The road to a fully fledged united front, however, remains rocky. Five factions exist within the piqueteros movement reflecting programmatic differences among the main constituent groups: most notably, the Partido Obrero; the left-wing (Maoist) Corriente Clasista Combativa (CCC) of the Central de Trabajadores Argentinos (CTA); the CTA itself; the Bloque Piquetero Nacional, or Bloque Tercero (Third Block), which includes a number of small but important revolutionary organizations such as the Frente Obrero Socialista (FOS) and the Movimiento de Trabajadores Revolucionarios; and a current of radical nationalism, or Peronism, which is controlled by Duhalde.

These divisions explain various contradictions within the piqueteros. The piqueteros’ stated goals, for example, include a number of potentially revolutionary demands, such as the re-nationalization of banks and privatized industries, as well as the repudiation of the external debt. Nevertheless, when the piquetero leadership negotiates with the government, it raises only the tamest demands (food and jobs programs).

Connecting the piqueteros movement and the neighborhood assemblies, on the one hand, with the traditional organizations of the working class, on the other, currently represents the biggest challenge to building a united front strong enough to take down Duhalde and to pursue the full range of left demands. The industrial working class so far has not participated in the struggle as much as other social sectors have. There is strong white-collar working-class participation in the neighborhood assemblies, and individual blue-collar workers sometimes participate as well. But the official leaders of the major unions–the General Confederation of Labor (CGT), its dissident wing (CGT-Moyano), and the CTA–remain squarely within the camp of Duhalde and his Peronist-style populism.

The effects of devaluation may soon compel workers to push their leaders into a more combative stance–forcing them to call limited general strikes, as they have done in the past, to let off steam. Another possible dynamic, however, is one that would involve a rank-and-file movement to get rid of the present trade union leadership in order to transform the unions into independent organizations of working-class struggle.

The shape of things to come

Much is still uncertain about the concrete direction that events may take in Argentina over the next few months. Nevertheless, the general profile of class struggle can already be discerned.

Duhalde aims to defend the interests of Argentine capitalism as vigorously as he can. He seeks to preserve and, if possible, to increase the degree of Argentine national sovereignty in relation to the IMF and the United States. At the same time, he knows that the most serious threat to Argentine capitalism and to his own government comes from the mass movement. Duhalde thus shares with the IMF and U.S. imperialism a common interest in maintaining the neoliberal economy and state in Argentina.

The difference between Duhalde and the IMF is that Duhalde understands that he must concede something–however phony and fleeting–to the popular rebellion in order to avoid a full-blown revolution down the line. Hence, his gambit consists of using the threat of revolution to get what he can from the IMF, in terms of both money and the freedom to call his own shots, and then to use IMF aid to stave off any future social upheavals.

Duhalde’s overall strategy thus depends first and foremost on the IMF’s approval of new loans. Without the loans, he has no ability to placate the masses; and without that ability, he has no leverage over the IMF. All of this makes it unlikely that he will salvage any significant degree of national sovereignty out of current discussions. But he may convince the IMF to tolerate some social spending in order to derail a revolutionary upsurge that would surely send ripples across Latin America.

Despite his populist sloganeering, there can be little doubt as to where Duhalde stands when it comes to a decision between serving neoliberalism or seeking social justice. In February, he did not hesitate to send special police forces and army units to bust up a dockworkers’ blockade against transnational oil companies. And his support in January of the IMF’s proposal to soften the economic crisis for domestic and international banks by converting dollar-denominated savings into devalued pesos constitutes one of the greatest lootings of ordinary workers’ wealth in the history of modern capitalism.

Nevertheless, the IMF and U.S. imperialism do not yet trust Duhalde and are apparently developing their own strategy. While Duhalde attempts to pressure the IMF with the fear of revolution, the IMF bluntly responds with the specter of old-style colonialism. A recent opinion piece in the March 8 Financial Times spelled this out in unmistakable language:

Argentina now must give up much of its monetary, fiscal, regulatory and asset management sovereignty for an extended period, say five years ... That is what Argentina must accept in exchange for new loans ... Specifically, a board of experienced foreign central bankers should take control of Argentina’s monetary policy ... [Any] new pesos should not be printed on Argentine soil ... A massive privatization campaign of ports, customs, and other obstacles to productivity must now take place. There should be widescale deregulation to achieve competition in the wholesale and retail sectors.

Such a “solution” to the Argentine crisis, of course, would fit neatly with George Bush’s new imperialist doctrine of the right of the U.S.–and of the international financial institutions it dominates–to seize control of whatever territory the U.S. consiøers to be a “failed nation.” Whether Afghanistan or Argentina, the U.S. recognizes no national sovereignty in the developing world that would take precedence over its own imperial designs.

While both the piquetero›and neighborhood assemblies have experienced spectacular growth and success over the last two months, a critical debate erupted on the left in mid-January over general strategy for advancing from what is rightly perceived as the first stage of the Argentine revolutionary process to the next. In essence, the debate concerns the most effective way to build a large-scale united front and to develop a revolutionary party out of it.

The Partido Obrero (PO, Workers’ Party), for example, supported by the Movimiento Socialista de los Trabajadores (MST, Socialist Workers Movement), has called for the creation of a Constituent Assembly. The PO argues that such an assembly could quickly bring together both working-class and middle-class forces in an effort to articulate an economic and political alternative to the neoliberal state. It openly admits that a Constituent Assembly in present circumstances would likely have the character of parliamentary (that is, bourgeois) democracy as opposed to the deeper democracy associated with workers’ democracy.

But certain provisions, the PO suggests, such as paying only the average workers’ wage to delegates, would make the Constituent Assembly a hybrid entity–partly bourgeois democratic, partly working-class democratic. In addition, according to the PO, the slogan “Out with Duhalde and the IMF/For a Constituent Assembly” is the only one that correctly poses the question of power in the current phase of the revolutionary process. Anything else, the PO maintains, is merely preaching to and hurling propaganda at the mass movement.

Criticisms of the PO’s strategy come from the other smaller groups who, like the PO, emerged from the breakup of the once influential Movimiento al Socialismo (MAS) over the course of the 1990s. For the FOS and the remaining members of the MAS, the PO’s call for a Constituent Assembly risks encouraging the illusion that reform of the existing state can provide a solution to the crisis. In this respect, it both impedes the development of revolutionary consciousness and misrecognizes the most important task confronting revolutionary socialists in the present moment.

That task, the PO’s critics rightly argue, is to strengthen the power and self-reliance of the popular assemblies. As a leader of the FOS recently commented,

It is very important that the popular assemblies start taking on the task of uniting with other sectors and exercising their power. For example, when the companies want to cut power, gas, or whatever, the movement should go and reconnect the power when it is cut. They should find the deposits where the big supermarkets are hiding food they don’t want to sell ...

Our main work is around...developing the popular assemblies and all the popular organizations to transform them into democratic organs of self-determination for the working class. For that we want them to take up concrete tasks and to try to get the industrial working class incorporated into these new organizations. Our aim is that the industrial workers with their traditional organizations become part of the popular assemblies ...

We must coordinate everyone together: the piqueteros, the popular assemblies, and the trade unions. It is in this way that socialists will help to construct a revolutionary party–by calling for unity among left-wing parties and class-struggle tendencies, in a united front, as a step toward building a revolutionary leadership.

The comradely debate over strategies and tactics among the Argentine revolutionary left is a healthy one. It signals the first step in cementing a united front capable of fighting for a socialist outcome to the economic and political crisis. The objective conditions for revolution presently exist in Argentina. Whether the struggle for socialism succeeds or fails now depends on the development of subjective revolutionary agency: the power of employed and unemployed, blue-collar and white-collar workers to change the world.