Nestor Kirchner’s election as president of Argentina in May last year was the final act in a drama that began at the end of 2001, and shook Argentina’s establishment. Nearly a year after his election, how are the people of Argentina flourishing?

The almost revolutionary process unfolding over 2001-03 saw three presidents forced out in less than a week. At the height of the mobilisations, almost half of the population were in different types of mass organisation, from the unemployed piqueteros to the middle class in the popular assemblies.

But the lack of leadership, the disunity of the left, and the policies of some of the shrewder politicians hampered the revolutionary process. When presidential elections were called, Kirchner, the left-Peronist former governor of Patagonia, was elected with little more than 20% of the vote.

First steps

Kirchner’s inauguration took place in the name of radical reform, and in the presence of the most popular Latin American leaders. For the event, Buenos Aires hosted Cuba’s President Fidel Castro, Brazil’s President Luiz “Lula” da Silva and Venezuelan President Hugo Chavez.

The image of a radical break with the past was reinforced by Kirchner’s initial actions, directed against the country’s most hated and corrupt institutions.

Within weeks of his inauguration, the top leadership of the armed forces was dismissed; the justice system was purged of the most notorious and corrupt judges. The police, the superannuation fund managements and the intelligence services were also cleaned up.

In a deluge of speeches against globalisation and the US plan for a Free Trade Area of the Americas (FTAA), Kirchner stressed the need for a “national capitalism” independent of any international influence.

At the same time, the prices of essential public services were frozen, and the planes trabajar (a sort of a dole payment to unemployed) was increased.

Even while negotiating with the International Monetary Fund, Kirchner offered the creditors holding the formerly private debt that the government of Carlos Menem had “nationalised” a payment equivalent to 25% of its value.

All these measures seemed to set Kirchner on a course of conflict with the US administration led by President George Bush, especially when Washington’s secretary of state for Latin-American affairs, Roger Noriega, issued a stern reminder about Argentina’s position on Cuba and private debt and, in effect, summoned Kirchner to a meeting with Bush.

All of which seems to put Kirchner in the same boat as Chavez and Castro as a Latin American patriot confronting the empire. But is this true?

There are contradictions in his relationship with the US. Recently, Kirchner, along with Lula, has made it clear that Argentina would collaborate with Bolivia’s Evo Morales and his radical Movement Towards Socialism (MAS) should it win government in the next Bolivian elections. This is a stance to which Washington is adamantly opposed.

But Kirchner’s opposition to the FTAA, like Lula’s, has lately become a fight for a “fairer” FTAA. At the recent meeting of Latin American head of states in Mexico, only Venezuela rejected the FTAA unconditionally.

As for the debt, based on the principle that “if Argentina can pay we are willing to pay”, Kirchner has negotiated a repayment scheme set at a minimum of 3% of Argentina’s gross domestic product. As a result, almost 40% of the increase in the national budget will go to pay the interest on the debt. The increase in spending on social security and social development will be only slightly more than 2%.

The real economic situation

In the last week of 2003, the government announced that estimated economic growth for the last half of the year was more than 7% and that unemployment had fallen by 4.5%. But this picture is as dressed up as a Christmas card.

The average monthly wage in Argentina is about 550 pesos (A$330), as against a living wage calculated at 1500 pesos ($ 900). This means that 58% of the population is under the poverty line and almost 30% is living in absolute poverty.

Since 1970, the purchasing power of wages has fallen by about 60%, while the living wage has increased by 74%.

Unemployment stands at 22% (about 3.5 million people). If we add in the underemployed, this figure rises to 5.2 million. The employment growth announced by the government does not even take the situation back to the beginning of the recession in 1998, when unemployment stood at 12%.

If we accept the estimates of establishment economists, it will take eight years of 5% growth to get unemployment under 10% – this would be a miracle.

And what sort of jobs are being created? In the 1990s, casualisation and sackings were imposed throughout the country in the name of modernisation and “flexibility”. Now, in the name of “a serious Argentina”, yet more exploitation is coming.

Half the jobs are cash-in-hand, which creates extra profits for the bosses. This is especially clear in those areas where the devaluation of the peso has practically eliminated imports. Textiles, clothing and some metal industries account for about 80% of recent jobs growth. Here, industrial rights have almost been destroyed, unions are ghost-like and exploitation is rife. The young people and women who predominate in these sectors receive 37% less than the male wage.

`Help’ from the government

At the same time, the government is preparing a plan called Manos a la Obra (Hands to Work). This plan aims to rationalise all social security payments on the basis of a card system, and is most aimed at reducing the fighting spirit of unemployed organisations, especially those which are most active. It is a work-for-the-dole system which will also drag wages beneath contract levels, making working conditions even worse for the employed.

As this plan unfolds, it is clear that it is an attack against the entire workers’ movement, employed and unemployed. The aims are clearly to freeze wages and degrade working conditions, all in the name of benefiting “national capital”. The CEO of Fiat, the biggest car-maker in Argentina, has said that under the plan he could offer lots of jobs to the unemployed, especially because they would be coming with subsidies from the government.

Growth is coming with an increase in the productivity and the extension of working hours – along with an average of 60 workers a month killed in industrial accidents. Probation times for new workers have been extended up to 12 months, while temp agencies, which supply workers without award protection, are flourishing. Holidays are being cut back and lunch breaks now resemble the one in Charlie Chaplin’s famous 1936 movie Modern Times.

The ministry of industrial relations accepts that working hours have increased to 2040 per worker a year. That’s an average nine-and-a-half-hour day with little or no increase in pay.

The picture is one of a working-class movement returned to 19th century conditions, not one with a proud history of struggles that we should remember. Under the umbrella of an inherited crisis, the need to confront neoliberalism and assert national dignity, the Kirchner government – with the full support of public sector bureaucracy – is pursuing a full-on plan of class collaboration directed against workers.

The bosses’ heaven

“We are leaving the hell”, says Kirchner. But where are we going? If the workers are losing, who is winning?

Profit is up, with the average return on investment between 8% and 10% (according to the interest rate that the banks charge for loans for business investments). Productivity grew an extraordinary 13% between the first half of 2002 and 2003. And the gap between the 20% richest and the 20% poorest is widening. The former are accumulating 54% of newly produced wealth and the latter only 3%.

The months are passing and the differences between the Kirchner government’s actions and its words are becoming more marked. The illusions of those that believe this is a radical government are fading. The picture of a pragmatic government is closest to the truth. In the tradition of Argentina, we are dealing with a traditional “progressive Peronist” administration, as the president’s wife herself admitted in a forum in Paris last year.

In any case, the Argentinian people are getting to know what are the limits of such “progressivism”. Here is a country with the capacity to feed 300 million people a year, but which under the present set-up, cannot feed 30 million and in which 58% of the people are below the poverty line.

[Data in this article was taken from the Argentinian newspapers Ambito Financiero, Pagina 12, Clarin, and La Verdad Obrera. Raul Bassi is a member of the Australian Socialist Alliance.]

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