December 2001 marked a turning point for Argentina. First the government did violence to society by putting strict limits on the way people could use their money and the forms in which they could use it. Then it was the people who rebelled—at times with violence, at times with patience—to these authoritarian measures. Someone said, recalling John Reed, that between December 20 and January 2 we lived through 13 days that shook the country, and in this brief lapse of time a new nation began to gestate. Nobody is yet predicting how the process will turn out. Some are claiming an unprecedented alliance between classes may be in the works; it is still too early to say, but the validity of the old order is certainly coming into question.
The days of disillusionment and rage began in the middle of December, with those left out of the existing economic model seeking their sustenance by looting food stores. This group includes the unemployed, who according to official December figures constitute 18.3% of Argentina’s 13 million work force, and the underemployed, who make up another 16.3% of the work force. Fourteen million Argentines—over a third of the population—live below the poverty line. The upheaval continued into the Christmas season, when those who were well-off under the model realized that their tables would be lacking the holiday delicacies they had always had before. It was then that the unthinkable happened: The middle class, which had always watched the drama of the poor from above, started to shake the government as they beat pots and pans in protest, joining up with those who were taking direct action in search of a plate of food.
On December 20 then-President Fernando de la Rúa had to resign. He fled the seat of government, the Casa Rosada, aboard a military helicopter. Outside, the Plaza de Mayo—made world famous by the mothers of the 30 thousand people disappeared by the dictatorship that ruled Argentina from 1976 to 1983—had been under siege for two days, occupied by huge crowds. De la Rúa left, carrying on his conscience the lives of 29 young people who had been killed in the government crackdown of the preceding days, a repression the likes of which had never before been ordered by any elected Argentine government. After that, there were three ephemeral presidencies. Finally, on January 2 Peronist Eduardo Duhalde took office, elected by a legislative assembly that granted him a precarious legitimacy upheld by a vote which had been the result of party discipline.
For de la Rúa, the beginning of the end had come on December 3 when, faced with the impossibility of meeting the interest payments that were about to come due on the foreign debt, his finance minister, Domingo Cavallo, decided to limit the payment of salaries, pensions, and cash bank withdrawals. The funds thus retained in the banking system would be used to avoid a suspension of debt payments—a default, in International Monetary Fund (IMF) terminology. Furthermore, a people that was not in the habit of using the banking system to do its business was now forced to do everything via banks. Checks and credit cards became the only possible means of payment. This was so even for the 39% of the population that works in the informal sector. This was so even for the 53% who survive on an average predevaluation income of $400 a month. This was so even for the select 8% who had previously done fine under the model.
With the lootings and the sound of clanging pots and pans, with the desperation of those who have nothing—the excluded—and the indignation of the formerly included, a bomb was being set which would do away with four presidents during those 13 days that shook the country. Now Duhalde still hangs on, but with the same music playing in the background. For going on three months now, the people have taken control of public space. The methods of struggle used by the excluded have come to be shared by the included. The middle class came out to the streets and plazas. Today they take part in exposing corrupt officials, in destroying bank windows, files, computers and ATMs. They denounce the machinations of the financial world and identify their enemies as the IMF, the World Bank and the banking system. Today they blockade streets and highways—the same people who three months ago confronted picketers who blocked the same routes demanding work or government aid. Today the poor are banging pots and pans—the same people who only three months ago made fun of this noisy form of protest chosen by those who "have everything."
Buenos Aires, the most European of cities in the Americas, and the other main urban centers of Argentina have changed their face. With no money in the hands of the people, robberies have fallen 52%. Stores have no shoppers, buses circulate half-empty and restaurants close very early. Buenos Aires, a city that traditionally stays up all night, is empty from eleven pm. Every day, dozens of small demonstrations erupt: In front of the Supreme Court and the homes of its nine corrupt judges. In front of the Congress, bank headquarters, the houses of certain political leaders, on any corner. These actions interrupt traffic at the least expected moments. The demonstrators always demand the same thing ("Get rid of them all!") or make the same accusation ("thieves!"). The banks and the offices of now-privatized, formerly public service companies have covered their windows with expensive iron bars and metal screens to protect their facades from the rocks that today, tomorrow, at any moment, the popular fury may heave in their direction.
As soon as de la Rúa imposed a state of siege, people took up civil disobedience. As a result, the state of siege lasted less than 48 hours. Argentine society is still ready to assemble, but since December 3 people don’t respond to political parties. In large and small demonstrations no political party signs are seen; no political party slogans are heard. Traditional political structures have been abandoned, and though some community and church groups are playing a role, people are largely self-organized: Any Saturday or Sunday you can attend one of dozens of popular assemblies which meet in the plazas and parks, debating various proposals with enviable order and great respect even for those who bring up proposals that aren’t on the agenda, like the utopian dissolution of the armed forces.
This state of deliberation worries some and delights others. There are those who believe that we are witnessing the birth of a new form of making politics. There are those who watch with concern the role the middle class is taking on. The worry is that this social sector is a historic ally of the enemies of change; this group provided the initial political opening—and in some cases the permanent one—for the authoritarian governments that ruled Argentina during the twentieth century. The middle class, together with the financial sector, was the main beneficiary of the neoliberal policies imposed in 1991 by then-president Carlos Menem. Those who are concerned about the political rise of the middle class also recall how vulnerable this group has been to nationalist, xenophobic ideas that target those "who’ve come to steal our jobs"—immigrants from Asia and other parts of the Americas—as well as Jews and descendents of indigenous groups.
But there had been earlier signs that the caceroleros—middle class beaters of pots and pans—and piqueteros—unemployed picketers—could share opposition to the neoliberal model. Perhaps the most striking examples of this were the great increase in support for the moderate left National Solidarity Front (Frepaso) in the 1995 election and the victory of the anti-Menem Alliance formed by Frepaso and the social democratic Radical Civic Union (UCR) in the 1999 election. And so today sociologists and political analysts are asking: Are we seeing an actual alliance of classes? The initial answer seems to be no. Sociologist Artemio López believes that "it will take a lot more common thinking and mobilization to generate trust between sectors which until now have been in confrontation."
Social analysts Fortunato Mallimaci and Federico Schuster suggest the things the two groups share, and the points where they diverge. Both analysts agree that the most common slogan used by the demonstrators—"Get rid of them all"—shows that the public is completely fed up with political leaders and the leaders lack credibility. But the analysts’ conclusions are different about whether this disgust with politicians might lead to an authoritarian outcome, perhaps another military regime. Schuster’s view is that the probability is not very high because the armed forces are in a weakened state; and he doesn’t believe any other form of authoritarian government could take shape without military support. "But anything is possible," he says, "we are in a period where all the doors are open."
In early February, coup rumors began to circulate in the press. Though armed forces chiefs declared their allegiance to democracy and denied that any coup plans were being made, Congresswoman Elisa Carrio, of the progressive Alternative for a Republic of Equals (ARI) party, one of the few political leaders who has retained credibility, said that she had received "many reports from a good source" of coup preparations in some military units.
Mallimaci worries that the demonstrators’ slogan refers only to politicians, and doesn’t include big business owners, corrupt union bosses and religious leaders "who were also part of the [authoritarian] system." He believes that "there is a group which promotes the ‘get rid of them’ slogan to feed disbelief in politics and to leave us at the mercy" of those who can portray themselves as virtuous and uncontaminated by corrupt politics, as the military can and as Alberto Fujimori did in Peru and Fernando Collor de Mello did in Brazil.
The sociologist Alcira Argumedo takes hope from the observation that "there is now a population that’s learning how to impose social sanctions, so that many of those responsible for Argentina’s collapse no longer dare to leave their houses." She believes that such sanctions may be starting to "point the way to something new, though still unpredictable."
The economic crisis that confiscated people’s money has profound roots. It goes back to 1966, during the dictatorship of Juan Carlos Onganía, when an accelerated process of denationalization of Argentina industry began. In 1976, the brutal military government began building up the foreign debt and there was an enormous transfer of wealth to the most powerful economic actors. The crisis continued to build, and has exploded in recent days, as a consequence of the neoliberal policies of the post-dictatorship governments. Raúl Alfonsín (1983-89) applied these policies timidly; Carlos Menem (1989-99) carried them to their extreme. According to James Petras, these governments "completed and legitimated the task which the military couldn’t complete." The statistics are cruel and show that Menem bears the greatest responsibility: With the increase in the debt to a formidable $5,000 per capita, the privatization of all state-owned industries, the concentration of the financial sector, the abandonment of all laws that protected workers, the imposition of a Convertibility Plan which tied the peso to a fictitious one-to-one parity with the dollar, and with the growing disparity in income distribution, Argentina’s national productivity was destroyed.
In a capitalist system, the winners and losers seldom change places. With the current crisis, there existed for a moment the notion that among the losers this time might be those who had made their fortune from the enforced "one-to-one" parity between the peso and the dollar: the multinationals, the companies which had been privatized with European and U.S. capital, the financial sector dominated by U.S. and Spanish banks. But the U.S. and Spanish governments and the IMF and other international financial institutions brought their unmatched lobbying power to bear and in the end they got the Duhalde government to give way in everything.
Initially, after abandoning the one-to-one parity, the Duhalde government fixed the exchange rate at 1.4 pesos to one dollar, but the United States and the IMF applied gross pressure until Duhalde agreed to let the peso float, which led, overnight, to an exchange rate of 2.10 pesos to one dollar.
Since Argentine bank accounts had been denominated in dollars, the decision to change the denomination to pesos meant that accounts lost more than half their value overnight. But all bank loans, previously denominated in dollars, were also converted into pesos. This was a good thing for small borrowers, who found their debts cut in half. It was also a major gift to the 87 large economic groups that had borrowed $26 billion in the last year and sent almost all of it abroad. The losers would have been the lenders—the banks—but for them the government issued a bond which would provide compensation for $30 billion worth of losses which the "pesofication" might cause. All the economists recognize the boon that the financial sector has been granted, and many have criticized it, but none so graphically as Pedro Pou, president of the Central Bank until five months ago. Pou was the failed promoter of the complete dollarization of the economy and a leading representative of neoliberalism. "The government has transferred about 40% of private debt to workers, who are seeing their salaries cut in half," he wrote. "We are experiencing a mega-redistribution of wealth and income unprecedented in the history of the capitalist world."
Who are the beneficiaries of this enormous income transfer? The big companies with dollarized income. The oil companies, with the Spanish firm Repsol at the head. The multinational steel companies. The companies that took part in the privatizations: Spain’s Telefónica and Endesa, Italy’s STET, Telecom of France, U.S. and European auto companies including Ford, DaimlerChrysler, Fiat, and Renault. And leading Argentine companies, including the oil company Pérez Companc, the cement company Loma Negra, Franco Macri—the holder of the postal service concession and owner of 92 firms—and the Clarín newspaper and its subsidiaries.
The people will pay for this in part directly and in part indirectly, in the form of new debts assumed by the national government. Before it could get new loans, the fragile Duhalde government had to have the support of the Bush administration. The United States interceded with the IMF so that Argentina would get an initial disbursement of $15 billion over the next few months. To be granted this favor, Duhalde had to agree to let the peso float and to renounce fixed exchange rates. He was also obliged to compensate the banks with those $30 billion and had to pledge to support Bush next April when the question of whether Cuba violates human rights comes up in the United Nations. Argentina will likely be the only South American nation to support the U.S. position. And this despite the fact that Duhalde said in a radio interview in February of this year that "in countries like ours 40% of the population has its rights violated" by being deprived of essentials that "Cuba guarantees to its people."
Argentine society, meeting in popular assemblies and determined not to leave decision making in the hands of elected representatives, has not yet taken note that despite its demonstrations it has once again turned over substantial portions of its sovereignty. And, although worn out, the neoliberal model remains in effect; the poor continue getting poorer every day while a tiny minority willing to do anything, and getting more voracious every day, maintains its hold on Argentines’ wealth.
ABOUT THE AUTHOR
Andrés Gaudin is a Uruguayan journalist who went into exile in Argentina in 1972. He lives in Buenos Aires and writes for Latinamerica Press and Brecha (Montevideo), among others. Translated from Spanish by NACLA.
1. See Alejandro Grimson, "A Hard Road for Argentina’s Bolivians," NACLA Report, XXXV No. 2, Sept.-Oct. 2001. Available online at http://www.nacla.org/issue_disp.php?iss=35%7C2
2. See Margot Olavarría, "Alliance defeats Menemismo in Argentina," NACLA Report, XXXI II, No. 4, Jan-Feb 2000. Available online at http://www.nacla.org/art_display.php?art=269
3. From a conference at the University of the Republic of Uruguay, June 23, 1988.
4. La Nación, Buenos Aires, February 5, 2002.
5. Press conference for radio reporters, February 4, 2002.