The International Socialist League shares the main conclusions and analysis on the situation in Argentina that were published in MST newspaper Alternativa Socialista No. 843. Follow the links at the end of this article.
Milei took office and a period of strong significant changes began. They are going to attempt to implement a very harsh austerity plan and curtail essential rights. But there will also be hard confrontations to prevent it. The failure of the PJ (Peronist Justice Party) and the desertion of the union bureaucracy, provide an opportunity to advance in building the labor and political leadership that workers and the people need.
By Guillermo Pacagnini
Milei’s rise has a material basis, the tremendous crisis that punishes working people: record inflation, job insecurity and almost half the population in poverty. A clear responsibility of the Peronist government, which disappointed those who believed that it had come to change the disaster that Macrism had left us.
Milei is not an unprecedented phenomenon, but rather the local expression of a global and Latin American phenomenon that arises from the global capitalist crisis. With a deep crisis of the old political structures and political and social polarization towards the right and the left. Given the failure of traditional parties and “progressive” forces in government, as well as the lack of development of left-wing revolutionary alternatives with mass influence, right-wing phenomena often emerge outside the old parties: Bolsonaro in Brazil, Trump in the US, Meloni in Italy.
In turn, they fail to maintain power over time, generating important reactions from the labor and mass movement. Therefore, although Milei’s program of measures sounds a lot like the 90s, the international context is different from then, when the neoliberal model was on the rise after the fall of the Berlin Wall. Today we have to prepare for greater social and political tensions.
The new government and the political regime
The rise to power of a far-right figure had an impact and generated political debates among activists. According to some, a period of setbacks and defeats or an almost fascist regime is coming. Sometimes this vision is fed by the bureaucratic leadership or leaders of sectors of the FDT Peronist coalition to justify their inaction, avoid taking responsibility for sinking the country or, worse still, contribute to Milei’s “governability”.
The government team that has just been formed expresses a new project with strong bourgeois, imperialist and IMF support. They want to advance in a deep adjustment and also in structural reforms that they have been attempting to pass for years and that the class struggle has stopped. More than an economic plan, this is a new attempt to “normalize” the country in capitalist terms, with workers that bow their heads and, with luck, get to work without complaining for two pesos.
After weeks of arduous negotiations against the clock, with the approval of imperialist powers, the IMF, the establishment and both defeated political coalitions, everyone contributed their quota of cadres to put together a government team for far-right Milei.
Libertarians, Macrists, experienced government officials of the caste and representatives of large capitalist corporations make up the new “red circle”. We cannot minimize this.
They are also going to try to take advantage of the social base that voted for them, consolidating the sector that they convinced of their ultraliberal discourse and seeking to rally those who voted Milei to punish the previous Peronist government. They have in their favor the “new government” effect and the expectations they created in these sectors.
This united front will also have in its favor the passive gesture of “allowing governability” that the rest of the FDT, Peronism and the union bureaucracy are providing. But it is also plagued by contradictions and will be subject to strong tensions.
It is a government that they had to form on the go, around an outsider, because the center-right JxC coalition failed to capitalize on the previous Peronist debacle and was also punished by the electorate. It has the titanic task of containing and defeating the labor movement, social movements, women and the youth to impose a plan of plunder, economic concentration and brutal austerity.
They are going to try to incorporate authoritarian elements into the regime, criminalize social protest, and apply repression to clear the way. But they will clash with the Argentine people’s democratic reserves and the fighting needs of broad sectors of the mass movement, which will not allow themselves to be exploited and stripped of essential rights without a putting up a fight.
The bourgeoisie plays its chips knowing that this “normalization” will have a high cost. The alternation of the Peronist and Radical two-party system has been struggling since the Argentinazo of 2001, and the two coalitions that they managed to put together to recreate that alternation have just foundered.
A reactionary roadmap
Some strategies are wavering, for example, they have postponed dollarization. Even so, it is a government that is clearly aligned with the US, Israel and willing to have “intimate relations” with imperialism to play on their side in the dispute for imperialist hegemony and comply with the demands of the IMF. We have yet to see what position it takes toward the BRICS, since there are sectors of theArgentine bourgeoisie that have important businesses there.
As new Economy minister Caputo announced, they intend to start with a brutal orthodox adjustment against the people (see below). They propose a harsh reduction of 15% of GDP: 10% with the deactivation of Leliq bonds and 5% with direct cuts. This adjustment, which devalued our lives by 120% in one stroke, will be followed by a privatization plan, an extreme shrinking of the State, indiscriminate economic opening and a series of reactionary reforms in state, labor and pension legislation to reduce social and democratic rights that cost us years of struggle to gain. With or without an “omnibus law”, this will be the prelude to their attempt at imposing reactionary structural reforms.
State layoffs are the first link in the chain. But the attack is more general. In the private sector they will seek to lower so-called labor costs. That is, replacing severance compensation with a “severance fund” managed by private insurers (construction union UOCRA model), outsourcing to cheaper labor (steel mill Siderar Techint model) and making labor contracts more flexible by extending the working day (Toyota Zárate model). Ecocidal extractivism, the curtailment of gender rights and the right to protest are also on the agenda. We have yet to see the pace they intend to advance with, but they want to take advantage of the initial push and impose a shock.
Milei’s lies
To justify this plan, Milei appeals to several fallacies. We must wage a cultural battle against them to unmask this scam of workers, the middle class and the poor. Let’s see some of them.
- “The caste will pay the adjustment.” False. The caste is in his government, in Congress, in the military and police structures, in the life-long judges. They continue to enjoy their privileges. Not a single peso of their income was reduced. They are not being obliged to use public services, as we propose from the left. Instead, workers’ salaries were devalued, social subsidies were frozen, and a brutal tariff hike is coming.
- “There is no money and there is nothing else to adjust.” False. The money is concentrated in the richest 1%. Entrepreneurs, corporations, and banks have multiplied their income. And on top of that, they are granted a privileged exchange rate to continue favoring their profits. There is also a brutal drain through the foreign debt scam, which amounts to almost 450,000 million dollars. The more we pay, the more we owe.
- “The problem is excessive public spending.” False. The budgets for social assistance, health and education have already been adjusted. In the first ten months of this year alone, “expenses” were reduced by 4.8% in real terms: family subsidies (-28.5%), energy subsidies (-25.8%), social programs ( -6.1%) and retirements (-3.5%). The main problems that liquidated the country’s reserves and are a permanent drain are the payments of the usurious debt, a responsibility of successive governments, capital flight, the plundering of resources and the concentration of the economy in few hands.
- “Argentina was a world power 100 years ago and these measures will launch us back to the top.” False. The parasitic bourgeoisie never had a development project. Argentina was and continues to be a country with a primarized, agro-exporting, deindustrialized, dependent economy. A semi-colony of imperialism. Except for the post-war period between 1946 and 1949, when there was a relative substitution of imports, our country has always been subject to the plundering of resources by a bourgeoisie that is junior partner to multinationals and mortgaged to the IMF, the World Bank and other international usurers.
What to do?
Those of us willing to fight have to design our own roadmap and prepare for tough confrontations.
In the labor movement, we must support and help coordinate the first struggles being waged against layoffs in the State. Given the imminent recession, demand the prohibition of layoffs and suspensions and occupy companies that close. Defend collective bargaining against attempts to flexibilize, the validity of full rights, and fight for a general increase in salaries, pensions and social plans with a trigger clause for inflation indexation. There will also be struggles in defense of public health and education.
The main labor confederation CGT has criticized the new government’s first measures, but is committed to “governability” and seeks to negotiate the reforms. Alternative confederation CTA-T asks workers to not “make waves” so as not to “expose” coworkers. State workers union ATE and its confederation CTA-A are “on alert”, but do not call for any measure. We must demand a general strike and a plan of struggle with continuity, but at the same time we must prepare it from below, with new activists and the militant unions. In unity with the militant social movements, which the government threatens to criminalize. In the heat of these struggles, we must take steps toward building the new union leadership that is needed.
But the struggle will take place in all areas. In the environmental movement, against extractivism and environmental depredation, one of the pillars of this capitalist model. Also in the youth, in the women’s and LGBT+ movements, and in the impoverished neighborhoods. We are heading into a global struggle, which we have to face with the greatest unity in action.
The unitary march called for December 20 must be the first step to winning the streets. But there is another task for this period that is more strategic: the struggle for a political alternative. Social struggles will be key to stopping the adjustment and defending our rights. But if we do not succeed in building a new alternative from the left that offers a channel to all who have been defrauded by the false progressives of the Peronist government that failed, that can become a viable option to govern, we will not advance towards a solution in favor of the working people. The other side of this difficult stage of confrontations implies an opportunity to advance this political alternative. The project that we propose from the MST in the FIT Unity aims to take this path.
The Chainsaw Plan’s 10 measures
By Gerardo Uceda
Far from new or different, as they wanted us to believe, the announcements show a rehash of the old neoliberal orthodoxy of the 90s, compounded by the tremendous crisis, which they plan to unleash mercilessly on millions of workers and the people in general. The promises of a solution by eliminating the “caste” went up in smoke. Today the caste came back with Macri, Caputo, Bullrich, Scioli and Lavagna – among others – to adjust to us. These are the main measures that Caputo launched. They attack the vast majority, but benefit the same rich people as always.
1. Official dollar at $800 and an increase in the PAIS tax on imports. With this devaluation of the peso greater than 125%, inflation will rise brutally. If prices had already skyrocketed by 50 to 100% before, it will be even worse. Salaries, pensions and incomes for the majority will fall to less than half. But not all of us will be hurt: the large exporters of soy, corn, meat, etc. will be twice as rich, since they will be paid at a doubled dollar and will pay salaries and supplies at a devalued peso.
2. They will not renew State employee contracts signed in the last year. Claiming that they are cleaning the State of Kirchnerist false workers, they intend to leave some 300,000 workers out of a job. There are thousands and thousands of State workers with years of junk contracts, who until recently were called essential, that will be left on the street if they pass this adjustment.
3. They suspended State advertising in the media for one year. Although it is a reduction that they can do without, the $40 billion less in government advertising that Adorni announced will cause a reduction in tasks in public and private media, with a consequent cut in staff and salaries.
4. They reduced the number of ministries and departments. According to the minister, it will be equivalent to reducing public service spending by 50%. Although this measure seeks more political returns than economic savings, since the 9 ministries will fulfill the functions of the previous 18, they will spend more budget in areas such as Security, that is, repression, and will cut back on Education, Culture, Science and Technology and other necessary sectors.
5. They will reduce budget transfers to the provinces. This not only affects the National Treasury Contributions (ATN) and the extra money with which Kirchnerism conditioned its opponents, but also the federal co-participation, that is, the distribution of taxes. Thus, many provinces will lack resources to pay salaries and bonuses.
6. They will eliminate public works tenders and suspend those that have been tendered: This means a huge halt in the economy, which already causes layoffs and suspensions as in Vaca Muerta. Its effect will multiply into hundreds of private construction companies. All infrastructure works will be stopped, which will cause thousands of workers to be laid off and an economic slowfown for the country that will be very difficult to reverse.
7. They will reduce energy and transportation subsidies. This will cause an immediate rate hike in electricity, gas, transportation, fuel and other public services. Depending on the progress of inflation, it is difficult to know what prices will reach. If during Alberto’s last year water increased 1,000% in some provinces, without subsidies the increases could have no ceiling.
8. They will freeze the Boost Work subsidies at the 2023 value. Just when they foresee an inflation of 20 or 30% per month and a shutdown of the economy (the stagflation that Milei announced), the poorest sectors will have their income frozen. And they will try to apply the same to the State, since they will use the same 2023 Budget for all types of expenses. With this, for example, public universities already announced that they would not make it to April.
9. They will replace the import system with another one without prior authorization. By leaving aside the current SIRA system, they begin to pave the way for large companies to import whatever they want without restrictions. In the midst of a great lack of dollars, this can be very dangerous.
10. They will double the AUH subsidy and increase the Alimentar Card by 50%. It seems like a social gesture, but inflation will eat this insufficient increase up very soon. Furthermore, since both programs are managed directly by the government, they freeze other subsidies and plans managed by social movements to weaken them.
As you can see, this is a tremendous adjustment. To this we must add the privatizations of the YPF oil company, public TV, and education and health that they already anticipated. And if we add the total opening of the economy, which gives way to importing from the rest of the world with low or no tariffs, more than a stagnation of the economy, a collapse is coming: closures of companies and businesses, and layoffs and suspensions in the entire private sector that is dedicated to the internal market.