Can't pay, won't pay! Argentina is a classic example of the clash of free trade and the rights of capital with human needs and national development. Roger Burbach chronicles that country's attempt to escape debt and dependency—and to forge its own economic future

New Internationalist, Dec, 2004 by Roger Burbach

MARTA Ocampo de Vasquez was a founder of the Mothers of the Plaza de Mayo--the group of Argentine women who first raised the banner of human rights against the military dictatorship that ruled the country from 1976 to 1983.

Two decades later Marta and many of the other 'mothers' are again on the streets. Only now they're demonstrating for the recognition of basic economic and social rights.

'Look at the economic plan they left us with. And look at the state of the Argentine people. A country with such wealth--the granary of the world--yet people are dying of hunger. Until recently we said that 100 children a day died from malnutrition, but today we'd have to increase that number. It's incredible,' says Marta. (1)

In December 2001 Argentina captured the world's attention with a massive social explosion that produced five different presidents in less than two weeks. The crisis had been building for years. Its foundations lay in the economic model pushed by the International Monetary Fund (IMF) in the early 1990s.

The President then was Carlos Menem (1989-99), 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 oil and airlines to telephone and water utilities were sold off to foreign interests. Even Texas-based Enron got into the fray with the lobbying help of George W Bush, buying into a natural gas pipeline company that enjoyed special tariff and tax concessions.

By the mid-1990s Menem had tied the country firmly to the international financial system by pegging the Argentine peso to the US dollar at an exchange rate of one-to-one. A class of financial wheeler-dealers came to dominate as the country's industrial capacity was gutted. With a fixed exchange rate, Argentine exports became uncompetitive in international markets while cheap imports flooded the country. Even the dynamic agricultural sector went into decline when its once world-class beef industry lost its major export markets.

In the wake of the economic and political collapse in late 2001 and early 2002, Argentina became a cauldron of social ferment. Mammoth demonstrations erupted across the country. Protesters chanted: 'Que se vayan lodos'--meaning that the entire political class and its international financial backers should be tossed out. The IMF, along with private banks like the Bank of Boston and Citibank, were denounced for their role in precipitating the country's crisis. The demonstrators demanded an end to the wealth-draining policies of prior years.

In neighbourhoods and municipalities, 'popular assemblies' were set up to debate issues and to protect local interests. People helped keep shop owners from being closed for not paying taxes or rent. Some assemblies urged residents not to pay their property taxes and instead to turn the revenue over to neighbourhood hospitals. The assemblies also discussed international issues. According to assembly organizer, Lidia Pertieria: '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 piquetereos are the most persistent and intransigent of the protesters. They spring from an underclass that is suffering the brunt of the country's 20 per cent unemployment. They pour into the streets, blocking traffic, to demand jobs, government help for their families and land to grow their own food. Many of the piqueteros have been active since the late 1990s protesting the Government's made-in-Washington economic policy.

Today the IMF's Number Two boss, Anne Krueger, insists that one of the 'mistakes' of the Menem era was that the Government didn't go far enough in following the dictates of the IMF--particularly with regard to the 'flexibility' of labour legislation. She argues that with a fixed exchange rate 'labour flexibility is necessary for the economy to respond to economic shocks'. Translation: workers should bear the brunt of any adjustments imposed by the twists and turns of the global economy.

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Since the economic collapse more than 200 companies have been taken over by their employees after owners closed their businesses. Along with these worker-run enterprises, co-operatives, alternative currencies, barter exchanges and other self-help institutions have all taken root.

Some popular assemblies have even challenged the rights of foreign investors. Near the Patagonian community of Esquel, 1,000 kilometres south of Buenos Aires, US-based Meridian Gold planned a 20-kilometre-long open-pit mine. Residents were particularly incensed that cyanide tailings would contaminate the region's water supply--killing fish and poisoning drinking water.

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Javier Rodriguez Pardo, a scientist and environmental activist, describes the impact of the project: 'We discovered that even after 10 years not one peso will stay in the province. All of the minerals will be exported and the Government will subsidize this cost. So what is left for Esquel and Chubut Province? Just 262 jobs, this export cost, the acid rock drainage and a kilometres long cleft in the mountain range. And, of course, they would leave us the environmental contamination.'