Argentina - The Revolution has Begun
By Alan Woods
In scenes reminiscent of the fall of Saigon, the leaders of the government
hastily packed their bags and fled by helicopter from the roof of the
Presidential palace. Only these were not foreign invaders fleeing from
an army of national liberation, but an elected President fleeing from his
own people. While the eyes of the world were diverted to the other war in
Afghanistan, another war was raging. In the week before
Christmas, Argentina was at war. Not a war between nations, but a war
between rich and poor, between haves and haves not - a war between the
classes.
For the bourgeois press, this was a sudden descent into collective madness.
"Argentina collapses into chaos" was a typical headline. Chaos there is. It
is the chaos of the capitalist system, of the so-called market
economy that was supposed to have solved all the problems of Argentina,
under the benevolent auspices of the IMF and the World Bank. More than a
year ago observers warned that the austerity measures
imposed by the government, in obedience to IMF advice, were likely to lead
to a rise in social tensions. Now they have been proved correct.
Argentina's president Fernando de la Rua was forced to resign after
thousands of angry and impoverished protesters took to the streets of
Buenos Aires in a revolt against the government's handling of a
devastating economic crisis. Before he did so, three days of social unrest,
widespread looting and police repression left 27 people dead and more than
150 wounded - the majority, poor people fighting for a crust of
bread, shot by the police.
We received the following e-mail from a subscriber in La Plata, Argentina:
"The president of Argentina Fernando de La Rua presented his resignation
after a massive demonstration of the people that took place in the square
of the Plaza de Mayo. After a television communication on
December 19 at 11.00 p.m., the people of the city of Buenos Aires poured
onto the streets, singing and banging pots, in a spontaneous reaction
against the president's speech. By 2.00 a.m. the square was full.
"The next morning people started to get together in the same square and
outside the Congress. The police started to repress people who were showing
their disagreement by peaceful means. At 4.00 p.m., the
people didn't wants to leave the square (that is a symbol of the working
class struggle in the 1940s and 1970s). Some people began to loot stores
and McDonalds, breaking all the windows of many foreign banks.
At 6.30 p.m. the president called for an alliance between the two major
parties (UCR and PJ), but the opposition party refused such collaboration.
The president at this moment is taping his resignation and tonight
the Argentineans will have a new president and elections in the next
months. This is a victory in the battle against neo-liberalism."
Yes, this is an important victory. But what has been won is a battle, not
the war itself.
The unrest erupted after the country's free market programme turned sour.
In the past two years Argentina, long the wealthiest nation in Latin
America, has been in the grip of a deepening political, social, and
economic crisis. Fernando de la Rua's government was following the standard
prescription the IMF gives to economies facing financial troubles: slash
the deficit, deflate the economy and hope that investor
confidence returns. In fact, far from solving the problems of the economy,
these policies made them worse.
At bottom, the problem of the Argentinean ruling class is the colossal
power of the proletariat, which prevents them from carrying out the vicious
austerity policies dictated by the IMF to the end. In the past few
years, general strike after general strike has been called by Peronist
labour unions, under the pressure of the working class. This meant that the
Argentine capitalists could not stabilise the situation at the cost of the
working class - although it did carry out a series of vicious attacks on
living standards. Argentina lurched towards a default this year from its $8
billion loan as the IMF imposed ever-tighter conditions.
Unemployment soared and now stands at 18.3 percent.
The first wave of riots forced the resignation of the economy minister
behind the austerity package, Domingo Cavallo. "Cavallo resigned after he
saw 5,000 people banging pots and pans outside his home," a
source close to the former minister said. The spontaneous gathering outside
Mr Cavallo's flat in the exclusive Palermo Chico suburb of Buenos Aires
brought together people from all social classes, who kept up a
constant clatter from around 11.00 p.m. on Wednesday until yesterday
morning. The pots and pans marches had been preceded by two days of food
riots, with groups of up to 1,500 unemployed people breaking
into Wal-Marts and Carrefour supermarkets around the country.
"We're coming back and we'll be bringing all our neighbours," screamed Elsa
Gomez, a 45-year-old mother of six, to workers at a supermarket at Buenos
Aires' most exclusive shopping centre, after her group of
shanty town dwellers agreed not to storm the store in exchange for 250 bags
of free food. "The real looters are in the government," said opposition
legislator Alicia Castro, visiting the protesters at the Plaza de
Mayo yesterday. (The Guardian, December 21, 2001)
The anger of the impoverished masses finally boiled over in two days of
rioting and looting that left at least 22 dead and scores of protesters
injured in cities around the country. This was the most severe civil
unrest for more than a decade. In Buenos Aires, mounted police fought
running battles with demonstrators demanding the president's resignation.
Teargas and water cannons were deployed. Several hundred
people were in a standoff with police in the central square, Plaza de Mayo.
The demonstrators included a middle-aged woman who, despite having had one
of her toes hacked off by a horse's hoof, still railed
against 'this government's starvation plan'. She was referring to a
zero-deficit austerity package imposed by the International Monetary Fund
on Argentina, which is on the verge of defaulting on its $132 billion
(#90 billion) foreign debt. "'Argentina is empty,' said another protester.
'My children want to leave this country, there is no future here, our
politicians are too corrupt.'" (The Guardian, December 21, 2001)
Among the dead was a 15-year-old boy reportedly shot during the riots in
Santa Fe province in the country's west. Other victims were thought to have
been shot by shopkeepers trying to deter looters by firing into
the crowds. In Buenos Aires, a police officer guarding the doors of the
congress from demonstrators trying to storm the building was killed by a
paving stone hurled by a protester. The unions called two general
strikes.
The leaders of the Nation were besieged inside the congress building. "We
are bunkered in here," said a TV journalist broadcasting from inside
congress. "The legislators can't leave and nobody can get in." (The
Guardian, December 21, 2001) The president at first wanted to cling to
office and only resigned after opposition parties refused his request to
form a coalition. In a desperate attempt to hang onto power, Mr De
la Rua had spoken to the nation, asking the opposition Peronist party to
join him in forging a new economic programme to "assure social peace". He
had pledged to continue at his post. "I will carry out my duty until
the end," he said. But the terrified Peronists refused to accept the
poisoned chalice. If De la Rua had not stepped down when he did, Argentina
faced revolution. Neither the declaration of a state of emergency,
nor the bullets and tear gas of the police served to intimidate the masses.
United in action, they developed a sense of their own collective might.
Power was slipping out of the hands of the state and passing to the
streets.
A global crisis of capitalism
The main fear of the bourgeois is that the crisis is unfolding
simultaneously in every sector of the world economy. The word "contagion"
is being used to describe this phenomenon. This is the other face of
globalisation. In economics, as in politics, US imperialism is faced with
the equivalent of bushfires everywhere. No sooner do they put out one fire,
than another one flares up with even greater intensity. This is in
itself a graphic expression of the nature of the present epoch.
The crisis in Argentina did not originate there. It reflects the global
instability of world capitalism. The collapse in Turkey at the start of
2001 immediately affected the Polish zloty and the Brazilian real, which
suffered a devaluation of about 30 percent in the course of the year. This
placed unbearable pressure on Argentina, its most important trading
partner, whose exports were rendered completely uncompetitive.
Since the Argentinean peso is tied to the US dollar, devaluation was
(theoretically) ruled out. Thus, the whole weight of the crisis was placed
firmly on the shoulders of the Argentinean workers and the middle
class. This had serious social and political repercussions. There had
already been a number of militant general strikes in the course of 2001.
There was a massive protest vote in the general elections, and even an
insurrection in the northern town of General Mosconi where the unemployed
and the workers took the running of all public affairs into their own
hands. This was causing concern in Washington, where the IMF
initially provided funds to help to prop up the Argentinean economy. But
now events have moved far beyond that.
The decision to introduce dramatic bank controls led to a run on the banks.
On November 30, the country's banks lost $1.3 billion. The central bank's
net reserves slumped by $1.7 billion. Overnight, the country,
which was one of the richest in the world, is bankrupt. Finance minister
Domingo Cavallo once more went with his begging bowl to the IMF but was
received in Washington with stony faces. The IMF, having
already provided Argentina loan arrangements amounting to $48 billion in
the last year, had no intention of throwing good money after bad. Argentina
was left to sink under the weight of its own debts.
The economy was now in a state resembling a dying man with a high fever.
Interbank interest rates were pushed up to 1,000 percent. High interest
rates helped to plunge the economy further into a slump that
already had all the hallmarks of a deep depression. The country was in a
fatal downward spiral, where cause becomes effect, and vice-versa. A
shrinking economy means falling tax revenues, which means both a
further curtailment of public spending and higher interest rates, and so
on, until the bottom is reached. Unfortunately, the bottom is nowhere in
sight yet.
Exchange markets were closed on the orders of the central bank to prevent a
collapse of the financial system. Even if Argentina were to attempt to pay
its debts by surrendering its reserves, it would only have
enough to last until "the middle of the next quarter", according to a
report by Suisse Credit First Boston investment bank. Probably even this
estimate is too optimistic. But in reality, there is no possibility of
Argentina paying its debts. The Argentine economy stands on the brink of a
horrendous collapse and default, which can have serious effects throughout
Latin America, and on a world scale.
The crisis in Argentina has sent tremors through the international markets.
Markets across the world are watching to see whether the crisis would have
a domino effect in other economies in Latin America and
further afield. The initial reaction of the economists, especially in the
USA, were predictable. They claim that the crisis in Argentina is a purely
local affair which will have no discernable effect elsewhere.
In Washington the White House said it saw few signs of financial contagion
from the crisis. It reiterated its position that the new authorities should
work with the International Monetary Fund to develop a
sustainable economic programme. But it was the IMF and its policies that
brought about the present crisis. Fears that the economic crisis could
spread have been dismissed by the White House, which displays the
same staggering ignorance of world economics as it does in the field of
world politics.
"It does look like it's isolated to Argentina, and that's a helpful fact,"
said the White House spokesman, Ari Fleischer.
However, such a complacent view does not conform to the facts. So far,
there have been few signs of the contagion that shook markets after the
default and devaluation crises of Mexico, Russia and Brazil in the
1990s. But a default by Argentina would be the biggest in history.
Abandonment of the currency board system is also likely to have uncertain
consequences. A severe devaluation of the Argentine peso will harm
Brazil - Argentina's main trading partner. And the effects of this
instability will hit other so-called emerging markets. Already it has
caused a sharp decline of the South African rand, and the tremors are reaching
Hong Kong. The Guardian (December 22, 2001) warned: "Wall Street has so far
largely ignored events in its own economic backyard. But Argentina is not
an inconsequential economy. It is inconceivable, in a
global economy, that its effective bankruptcy will not have knock-on
effects. As ever, the most painful of these will come from unexpected
directions."
Latin America is now in the deepest economic crisis since the war. There is
not a single stable bourgeois regime from Tierra del Fuego to the Rio
Grande. The objective conditions for socialist revolution have been
ripe in the ex-colonial countries for at least half a century. In fact,
they are rotten-ripe for revolution. Decaying capitalism threatens to
plunge one country after another into barbarism. There is no way the
imperialists can stop this, no matter how many bombs they drop. The only
lasting order that is possible in Argentina is a revolutionary order, based
on the assumption of power by the working class, in alliance with the small
businessmen, the small farmers, the unemployed,
the women and the youth.
The central slogan of this new power is the general strike. But the general
strike must be organised and prepared. The only way to guarantee that the
movement will take place in an organised manner, with no
rioting and looting, is through the creation of action committees, elected
committees of the workers, which must be broadened to include the elected
representatives of the unemployed, the small shopkeepers, the
students, and all elements of the population except the exploiters.
The committees should organise transportation and the distribution of food
and other necessities of life to the poorest sections of the population.
They must control prices and patrol the streets to maintain order and
fight reaction. In order to fulfil these functions, they will need to
acquire arms. An appeal should be made to the soldiers and police to set up
elected committees, purge their ranks of fascists and other reactionaries
and link up with the workers' committees.The recent street
battles showed that the workers and youth had lost all fear of the police
and the state and prepared to fight and die if necessary, to defend their
just cause.
Only a radical reconstruction of society from top to bottom can show a way
out of the impasse. In the coming period, the question will be posed
bluntly: either the greatest of victories or
the most terrible of defeats. Its repercussions would be felt in the USA,
and on a world scale. Instead of preparing new military interventions
against the peoples of Asia, Africa and Latin America, but would be faced with
revolutions everywhere. Bravo to our southern Companeros!
by Danny 1:23pm Mon Dec 24 '01
Our hats off to the heroic Argentine workers, who have suffered so much
misery & epxloitation from their own country's compradors of globalized
Private Capital. Only this time the bloodsuckers made a complete economic
mess, thanks to the IMF/"free trade" & WTO's "poverty reduction" measures.
In the coming months, the progressives will need support, analytical
clarity, and an alternative economic & political program to advance a New
Collective Society. Let all progressives around the world offer them both
moral & material support, and the peoples will have won a pivotal victory
against the New International Terrorist(the hegemony of Capital.)
Look to South America for solution (english)
by Fred P 5:40pm Mon Dec 24 '01
good information - but it is also important to point out that IMF/World
Bank loans are also a cause of major instability in Ecuador, Bolivia and
Colombia, countries which all have huge debts that are currently unpayable.
Structural adjustment programs led to a million human march on Ecuador's
capitol and a temporary replacement of the executive branch of the
government there.
Bolivia is currently in crisis because poverty stricken farmers are
revolting.Crypto-anarchist Code red.
A "mexican wave" of Tsunami proportions may sweep the planet.Can you dig
it? CAN YOU DIG IT!
