Argentina on fire: people’s rebellion facing the deep crisis of the neoliberal market economy, GUIDO GALAFASSI, DEMOCRACY & NATURE: The International Journal of INCLUSIVE DEMOCRACY vol.8, no.2, (July 2002)

Argentina on fire: people’s rebellion facing the deep crisis of the neoliberal market economy[1]

GUIDO GALAFASSI

Argentina is the name of a country whose elites for almost two centuries intended to shape it as a “Nation – State”, that is to say a country with a representative ‘democracy’ and a developed capitalist economy. This was the intention , but obviously as a semi-peripherical country, Argentina has never achieved that aim, which was restricted only to central countries. However, at present Argentina is just a simple market, a place geographically located in which speculative interests of big international corporations as well as those of dominant social classes, both local and foreign, coexist. Undoubtedly, Argentina is one of the major “ neoliberal peripherical experiments” planned by the International Monetary Fund” ( IMF) and executed by the national and multinational corporations being assisted by traditional political parties. Considering the large profits of big capital sent abroad and the constantly increasing growth of poverty and social exclusion, the model has been a success.

The “Nation-State” destruction began during the last military regime ( 1976-1983), which was the bloodiest period in Argentina’s history, leaving 30,000 missing people behind. That regime was widely supported by various sections of society. It is thought that the end of the above mentioned regime was hastened by the unsuccessful Malvinas’ (Falkland Islands) military adventure. The “Nation-State” destruction was deepened by the democratic governments which succeeded the military regime. Therefore, the notion of Argentina just as a “market” consolidates. It was precisely Carlos Saul Menem (second constitutional president after Ricardo Alfonsin) elected president for the Peronista Party, who turned Argentina into one of the most adequate markets of the periphery to attract speculative capitals. It is necessary to remark that the broad consensus of the peronista-neoliberal government secured the support of almost all social classes (high – middle – low). Such consensus did Menem achieve that he governed for two consecutive periods and was elected by most of the citizens. The destruction of the State during President Menem’s government (together with Domingo Cavallo, Economy Minister) was complete. All Public Services State companies were given away to the local and transnational capitals. Thus, on the one hand the education and health systems were unattended, and on the other, a strong concentration of wealth in some few social sections was allowed and favoured. By the end of President Menem’s government about 30% of the population was living under alarming levels of poverty. At the same time, he managed to stop the hiperinflation process through the convertibility plan that pegged the peso to the US dollar. This plan was the key of his electoral success. As it was a peronista government demonstrations against it by the Unions, the workers and low class strata of the population were almost non-existent. Only some unemployed people asking for unemployment grants and a new Union Group (Central de Trabajadores Argentinos, CTA) protested. At the same time, the middle class celebrated the “stability” of prices without inflation, whereas the higher class welcomed their own success over the already non-existent State.

Meanwhile, the neoliberal “celebration” based mainly on the “economic greediness” was reaching an end. Interest payments for the foreign debt increased significantly committing most of the public resources to them. With foreign investments drained, poverty and exclusion of big sections of the population increased and corruption in local and national governments became an evetyday issue. It was corruption which induced the middle classes to choose an Alliance (Alianza) between the Unión Cívica Radical and Frepaso political parties for the next government, which led to the election of Fernando De La Rúa as president in 1999. President Carlos Menem was considered to be a man of great initiative (in favour of the big national and multinational corporations). President De La Rúa on the contrary, acted as a man without initiative. Consequently, economic concentration, exclusion and poverty continued to grow. The promise to fight against corruption was not fulfilled and what is more a big case of corruption was discovered even within some of President De La Rúa’s closest cabinet.

As it was already mentioned, during President Menem’s administration the demonstrations were almost non-existent, apart from those by unemployed people and Unions groups which were violently suppressed by the government leaving dozens of dead people. The unemployed demonstrated in various parts of the country, apart from the urban area. The severe crisis of the regional economies caused more regional unemployment. Typical examples of such protests were the ones which repeatedly occurred in oil areas such as Tartagal (Salta province) and in Cutral-Co ( Neuquén province). A regional situation of extreme poverty was caused by the privatization of the former State oil company YPF (at the beginning of the 90s), leaving thousands of jobless workers. Tartagal and Cutral-Co protests happened some years after the above mentioned privatization process.

The scenario that was put in action by the elites implied not only corporations having huge profits, but also a population suffering overwhelming levels of poverty. For some years protesters blocking the high-ways (piqueteros) only asked for an unemployment grant or some job. This situation spread widely all over the country. The new Union (CTA), mainly formed by state workers, also manifested their dissatisfaction about the neoliberal model. This was not surprising given that state workers were and still are one of the most affected groups of the State destruction. However, this stand was not adopted by the peronista Unions.

Although the demonstrations against the neoliberal policies were becoming more frequent as poverty and social exclusion were growing, most of the population showed little interest in them. Some even turned against high-way blockades just because of delays or “pretended inconveniences” ―an attitude massively promoted by the mass media.

During President De La Rúa’s administration, the economic crisis worsened and the middle class, which was the main supporter of De La Rúa campaign, criticized and disengaged from government policies. The resulting lack of confidence was expressed after two years of government, when the government party did not get the necessary votes in parliament renewal in September 2001. More than 30% of the votes were null or void in a deliberate demonstration of no confidence to the entire political body. The peronista party got 40% of the votes, and the Marxist left managed to have the best election in its history, with the election of three national deputies.

Demonstrations became even more frequent and by December 2001, after the sequestration of bank savings, Argentina collapsed into a so-called social explosion, outbreaks of looting, riots and general chaos ( some of them encouraged by the peronista party itself). President De La Rúa was only capable to declare the national state of siege on December 19 th. Citizens reacted immediately in a way reminiscing the events of 1810 and 1945 when the peronista party arose. In Buenos Aires city and in some other big cities in the country people tooked the streets inaugurating the pot-banging (cacerolazo) demonstration. Thousands of Argentines, mainly middle class, marched through the city downtown streets and gathered in the historical Plaza de Mayo. With demonstrations continuing and growing the police repression ordered by President De La Rúa and supported by the peronista party was brutal. Five people died in Plaza de Mayo and more than twenty all over the country. The peronista party, greedy for power, withdrew its support from De La Rúa who had no viable alternative but to resign. The peronistas were now able to recover the Executive.

Provisional presidency by Ramón Puerta (of the peronista party) lasted for two days. Then Adolfo Rodriguez Saa, peronista governor for quasi-feudal San Luis province was elected president by the parliament. However, his administration lasted for only a week and on December 31st, Rodriguez Saa resigned because of a mass protest and the lack of support from the peronista party. Three days of uncertainty followed in which Eduardo Camaño (peronista deputy) was provisional president. Eduardo Duhalde former vice-president of Carlos Menem’s presidency in its first period and former governor of Buenos Aires province, who was responsible for the deep social and economic crisis of the biggest district of Argentina, was elected president by the parliament. Public rejection of this political manoeuvringby the elites, with the use of well-known and unpopular politicians, was important but it was not expressed in an organized way. Meanwhile, the situation deteriorated as the sequestration of bank savings (corralito) continued and President Duhalde ‘pesified’ all dollar deposits at a rate of 1 to 1.40, in effect further devaluing them, following a previous devaluation of peso which soared the US dollar to an exchange rate of 1-2,5 pesos. Once more, the banks made huge profits at people’s expense.

Today, for the first time in the last decades, many Argentines started to understand the terrible injustice of the neoliberal market economy, which they had backed up for so long. Argentines who had not been interested in political issues before, started to discuss the model of the country they wished to have. New political organizations have been spontaneously formed in different neighbourhoods (neighbourhood assemblies) in Buenos Aires City and in some other cities in Buenos Aires province. Those assemblies have started to discuss local problems such as unemployment, health, etc but also broader issues about the economic and political situation of the country. The neighbourhood assemblies meet once a week, generally in public places. They discuss and debate all the various proposals that people presented, and then at the end of the meeting a vote is taken on the motions. This way, they decide what actions to follow in order to solve the various problems of their own neighbourhood.

Every Sunday, an “inter-neighbourhood” assembly is held. People from the various neighbourhoods of Buenos Aires city, as well as some others cities in Great Buenos Aires, attend this meeting. As each neighbourhood assembly is independent, the inter-neighbourhood assembly simply attempts to complement and unify proposals and resolutions. People who participate in the inter-neighbourhood assembly do not ‘represent’ neighbourhood assemblies since the idea of representation is being deeply debated and mostly rejected by these organizations. Therefore, the inter-neighbourhood assembly can be considered as another neighbourhood assembly, which gathers people from the whole of Buenos Aires city instead of only a particular neighbourhood. At present, approximately 70 neighbourhood assemblies are meeting in Buenos Aires city. It is much more difficult to know how many neighbourhood assemblies are held all over the country, due to the limited information available. Taking into account this shortage of information, it can be assumed that at least 30-40 neighbourhood assemblies exist in Great Buenos Aires, and at least another 20-30 in the rest of the country. It is possible that many more neighbourhood assemblies are spread all over the country, but this cannot be verified due to the limited organisation of the assembly movement at this early stage and the deliberate shortage of information on the matter by the mass media. As regards the level of participation, it varies locally and regionally. However it is possible to estimate that approximately 30 to 100 people join each assembly every week, whereas the inter-neighbourhood assembly in Buenos Aires city, gathers about 200 to 400 people every Sunday[2].

These organizations support the idea of the replacement of the traditional political institutions (the Executive, the Legislative and the Judiciary), challenging even the very institution of representative democracy through the forms of organisation they have adopted which are based on direct democracy . The general feeling is that politicians and big economic groups are a fraud deceiving people. However, it should be stressed that only some of these assemblies propose to replace the present political institutions through a drastic reform of the National Constitution. In general, the neighbourhood assemblies have not outlined a way out of the crisis due to their embryonic organization and their political inexperience. The members of such assemblies usually reject traditional politics. What is important however is that these organizations, far from supporting the traditional solution to crises in Argentina (a military coup) they struggle for direct democracy, popular participation, rejection of the neoliberal market economy as well as political independence. Some of the assemblies’ members also take part in weekly protests against corruption in the Supreme Court. Moreover, every day people besiege banks downtown protesting against bank institutions which are the main targets of the collective fury. As a result banks have walled their facades.

In conclusion, the lack of a radical movement that will integrate all these neighbourhood assemblies, street protests and high way blockades into a comprehensive political program involving a clear alternative to the present political and economic institutions has created a huge power vacuum in Argentina. Therefore, although the events of the last few months represent a real transformation of politics and of Argentinian society , the final outcome is still open as the economic crisis is so deep that even the big international corporations do not have a clear idea of what way to follow to continue accumulating billions of profits. The strength and action needed to produce a drastic social change towards fairness, equality and solidarity that would eradicate the neoliberal market economy in Argentina is still to be developed.

[1] Due to the changing political and economic situation in Argentina today, it is important to point out that this article was written in March 2002.

[2] More information about the neighbourhood assemblies and the pot-banging movements is available on several web-site:

http://www.plazademayo.com/; http://argentina.indymedia.org/; http://elcacerolazo.com/; http://www.piketes.com.ar/; http://www.calsnet.net/argentinaarde