The Hindu : Fresh protests in Argentina

Online edition of India's National Newspaper
Sunday, Feb 24, 2002

International

International

Fresh protests in Argentina

BUENOS AIRES (Argentina), FEB. 23. Fresh protests broke out in Buenos Aires, hours after the President, Eduardo Duhalde, admitted his Government may have to cut state workers' salaries because of the country's economic woes.

Several hundreds demonstrators gathered on Friday in the capital's main square, the Plaza del Mayo, the latest of a series of protests by pot-banging middle class Argentines, angry after four years of recession and a banking freeze that has shut off access to their savings. It was, however, the smallest protest so far, lasting just a couple of hours and taking place without incidents.

Other demonstrations took place in the Avellaneda suburb of Buenos Aires, where jobless Argentines blocked one of the main roads into the capital, and in the city centre in front of several foreign banks. Protests have become routine in the last two months since the former President, Fernando De la Rua, announced his resignation after two days of looting and violent demonstrations left 26 dead. On Friday, Mr. Duhalde warned that state workers might see their salaries cut in the weeks ahead. Last year, state workers' wages were cut by 13 per cent. "It would seem that we aren't able to pay in full state workers' salaries. There's no money, so we can't pay,'' the President said over local radio.

In a televised speech later, Mr. Duhalde said pensions and social spending would not be affected. The President also said his Government hoped to create two million jobs and had an upbeat message for his compatriots. "I am convinced that despite the difficulties ... we will get out of this crisis.'' Yet that optimism was not shared by Rodolfo Daer, head of Argentina's largest union confederation, the CGT, who warned that any failure to pay state workers would provoke an angry reaction. "If they don't pay people's salaries, there's going to be a social explosion, it's unthinkable,'' he said at a press conference.

Others took aim at Mr. Duhalde over news that he had ordered his salary to be raised to 3,000 pesos a month free of tax, a 15 per cent increase. The salary had been cut to 2,550 in December by the interim President, Adolfo Rodriguez Saa.

Meanwhile, the latest figures on industrial production confirmed the depth of Argentina's economic crisis. Production fell by 18 per cent in January on the year earlier, according to the National Institute of Statistics and Census. Argentina' economy is expected to shrink by 4.9 per cent this year, inflation rise to around 15 per cent and the budget deficit ran to $ 1.5 billion, according to the Government.

Meanwhile, the Economy Minister said his country was unlikely to survive without IMF aid, in the latest effort to persuade reluctant foreign donors to help stave off what he termed ``social chaos.'' Jorge Remes Lenicov was told by the IMF last week it will not even evaluate aid until it sees more evidence of cost-saving and plans to restructure a banking sector that is drained of deposits and savers' confidence.

The Minister warned in an interview: ``We are convinced that Argentina will find it tough to get out of this without a deal with the IMF. That will allow us to get financing and improve our economic outlook. It's impossible for Argentina's economy to recover if it remains isolated from the rest of the world.''

Argentina is a powder keg of protest by unhappy savers and the growing ranks of poor and unemployed, who two months ago forced an elected President and his successor to resign.

Mr. Duhalde has a shaky grip on power, say analysts and bankers. Mr. Remes' open admission that IMF aid is essential breaks from the more nationalist tone of Mr. Duhalde, seen by some foreign investors as a throwback to the populist roots of his Peronist Party.

Mr. Remes said confidence could be restored if, in six months, unruly spending that pushed Argentina into default, is brought under control, spendthrift provinces are brought to heel and the now free-floating peso finds its feet.

But the old banking system would need reforms as it ``had not avoided $20 billion of deposits from leaving the system or having the highest interest rates in the world.''

``It's clear it cannot work the way it is now. We have to re-create the habit of saving,'' he said. However, he did not detail the reforms planned.

Mr. Remes said there was ``no trace today of hyperinflation,'' saying any rises ``respected the cost of imported supplies.'' He ruled out price caps, saying the only tool he might use against inflation would be lowering tariffs to let in cheap imports. — AP, Reuters

Send this article to Friends by E-Mail

International

Stories in this Section

Pearl killing was part of a wider plot: Omar Sheikh

Videotape dropped at news agency's office

Hunt on for Osama in Kashmir

UNITA leader killed in clash

Chandrika in battle mode as truce begins

Pak. not to release Pearl tape

Chuck Jones dead

U.S. hails truce

U.S. `megaphone diplomacy' irks E.U.

Blair Govt. accused of academic censorship

Fresh protests in Argentina

Refugee boat intercepted