WORKERS ACROSS Uruguay halted the Latin American country in a general strike on Thursday of last week in protest at the economic meltdown. There is a run on the country's currency, and the much vaunted financial sector is crippled.
Many hundreds of Uruguay's 3.3 million people are desperate for food in a country that had one of the region's lowest rates of poverty. 'The strike was unanimously approved by the 42 unions we represent,' said Juan Castillo, leader of Uruguay's largest labour movement umbrella group, the PIT-CNT.
Workers walked out on Thursday morning to take part in the strike and join demonstrations against the government. The government had ordered the closure of banks and cash machines two days previously to stop people withdrawing money from their accounts. Nervous bank customers then rushed to cash machines to try and get their money. The continued bank closures sparked last Thursday's unrest.
There was looting in the capital, Montevideo. The press reported that people broke into supermarkets, bakeries, butchers' shops and pizzerias to get food. Local newspaper La Republica wrote that in one incident about 50 people with black binbags ransacked a self service shop, shouting, 'We steal to eat!' Develop The government sent in 5,000 police officers and two air force helicopters to try and regain control of the capital.
People in Uruguay have suffered three years of recession, which has left one in four unable to afford basic food or pay household bills. Uruguay was among the first Latin American countries to develop a welfare state. But increasing numbers of people are now unable to afford healthcare insurance. The economic turmoil is linked to the debt crisis in neighbouring Argentina and Brazil, and is spreading throughout Latin America.
A surge of opposition to neo-liberalism and privatisation has swept across the region. People in Peru, Colombia and Bolivia have taken to the streets in protest. These demonstrations come as the rulers are currently trying to negotiate new loans from the International Monetary Fund (IMF). Uruguay owes billions of dollars to the IMF and World Bank.
There are also fears among the IMF leaders and the US government that Brazil may default on its $250 billion debt if the leader of Brazil's Workers Party wins presidential elections taking place in October. Uruguay's economy shrank by 10 percent in the first three months of this year. The Uruguayan peso, whose value has halved since the middle of June, plunged even further when foreign exchange controls were lifted.
The US government is so worried by the crisis and it spreading through the region that it stepped in with a short term loan of $1.5 billion. The IMF, Inter-American Development Bank and World Bank backed the US loan and pledged a further $800 million.
It is the IMF's policies that have ripped Uruguay apart. The government attacked workers last month by driving through massive tax increases to shore up the country's financial system. Right wing Uruguayan president Jorge Batlle is also considering imposing further spending cuts.
He is forcing through a long term block on people's access to the money in their bank accounts. He will stop Uruguayans from withdrawing from any fixed term dollar savings accounts in the two state banks for three years. But Batlle is under pressure. Economy minister Alberto Bension was forced to resign after workers protested against the government imposing an austerity programme.
Batlle's measures are likely to fuel the continued unrest that exploded on the streets last Thursday.