'Nobody knows if they will have a job tomorrow or when they will be paid. People are almost paralysed by fear.' This was what an Argentinian psychologist told journalists last weekend. No wonder. Argentina, an industrial country that once boasted a living standard as high as that of Italy, has been hit by an economic crisis.
It has driven the Argentinian economy close to collapse. Unemployment has shot up to over 20 percent, and production from the country's car factories is half what it was a year ago. Some 40 percent of people live below the poverty line, the government has imposed wage and pension cuts of 15 percent, and many public sector workers have been paid with coupons rather than real money for months.
The government last week imposed a limit on how much people could withdraw from their bank accounts each month. It seized people's pension funds to pay interest on its debts. Such measures are not only reducing the country's large working class to poverty. They have also produced the overnight impoverishment of wide layers of the middle class, in a way that has not been seen in any industrial country since the 1930s.
Finance minister Domingo Cavallo was in Washington last weekend desperately trying to patch up an agreement with the International Monetary Fund (IMF). He offered another $4 billion of cuts in government spending in return for a loan of $1.3 billion. This would have been on top of $8 billion of cuts made in August. But the IMF would not cough up. It was demanding a promise of bigger cuts next year.
At the centre of Argentina's crisis is the huge overseas debt built up by governments going right back to the military dictatorships of the late 1970s and early 1980s. It now totals $130 billion. There is no way this debt can be paid off, even if the country's workers are reduced to living on a pittance. But the world's bankers and industrialists have been doing their utmost to prevent Argentina's government cancelling even a small portion of this debt.
They fear this would provide an example to other indebted countries. As the Financial Times said in August, 'Argentina matters more than any other emerging economy. If Argentine woes were to spread rapidly, another firestorm could engulf emerging markets.' Finance minister Cavallo implemented the full neo-liberal Thatcherite package in the 1980s and early 1990s.
He scrapped controls on Argentina's economy and privatised virtually everything owned by the state. He was toasted as a 'miracle worker' by the country's rich, as a few years of economic boom made them wealthier than ever before. Then three years ago the economic crisis that began in Asia suddenly hit Argentina, and the miracle turned to dust.
The Menem government, of which Cavallo was part, became deeply unpopular and was thrown out of office. But Cavallo was brought back in the spring by the new De La Rua government after its attempts to deal with the crisis led to strikes and demonstrations by teachers and students.
It has been clear for months that Cavallo has no answer to the crisis. Meanwhile his free market economics allow the country's rich to move an estimated $40 billion of wealth abroad whenever they want.
Occupying to save our jobs
Eye witness reports from Zanon workers' occupation.
Almost 400 ceramics workers, teachers, unemployed workers and students found themselves a spot between the porcelain production lines. The discussion was intense. There were almost 30 speakers from all of the attending organisations.
Finally the speakers approved the document signed by the ceramics workers, the unemployed workers and teachers, as well as several of the organisations. The declaration is as follows:
'With the country's grave crisis, lay-offs and suspensions occur every month. In Cordoba thousands of government employees and municipal workers mobilise against budget cuts and privatisation.
In Neuquén the Zanon ceramics workers, who have been recently repressed by the police, struggle for the nationalisation and reopening of the plant under workers' control. We call for an immediate congregation of the National Assembly of Employed and Unemployed Workers.
This is to end the division of the struggles against the unified plan of the government, bosses and bankers. The struggles can democratically debate a plan of action aiming towards a general strike.
We can also draw up an employed and unemployed workers' solution to the political, social and economic crisis that we are experiencing. We also declare our opposition to the imperialist aggression against the people of Afghanistan and the Middle East.'
Confrontation with 'partners'
Argentina's working class has a long history of struggle, and has not responded to the crisis lying down. There have been widespread strikes of public sector workers. These have included key sectors like the power workers, and unemployed workers. They have used pickets to block roads and bring much of industry to a standstill for days at time. There has also been a series of general strikes, with the latest due this Thursday. But there is one great weakness. The bureaucracies that run the country's three rival union federations have historically seen the purpose of industrial militancy as being to force the employers to agree to 'partnership'.
This used to be expressed through the nationalist politics of Peronism. The name comes from the military leader who ruled the country in the late 1940s and again in the mid-1970s. Today it means that they will call for one day general strikes.
But they will not put forward any sort of programme by which workers would take over industry and present an alternative to the crisis based on democratic planning. Some groups of workers seem to have been moving in this direction. Ceramics workers in the Zanon factory in Neuquéi occupied the plant and urged other workers to join.