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Argentina: Economic Protests Continue - 2002-02-21

In Argentina, protests against the government of President Eduardo Duhalde are on the rise, as it tries to deal with a deep economic and social crisis caused by a prolonged recession. The mounting protests and the negative effects of a currency devaluation are putting the government into an increasingly difficult position.

Beating drums and carrying banners, thousands of unemployed Argentines marched on the Presidential Palace on a recent weekday afternoon in Buenos Aires to demand jobs.

One marcher, out of work for over two years, said he wants the Duhalde government to do something. "We want the government to give us jobs, so we can have money," he said. "We're doing this march so we can have jobs, that's what we want."

These unemployed protesters are known in Argentina as "piqueteros" because in addition to their marches, they also block roads and highways to press their demands. The piqueteros are different from the members of the middle class who have been coming out onto the streets of Buenos Aires to bang their pots and pans in protest. Like the piqueteros, these pot-banging demonstrations known as "cacerolazos" in Spanish are another manifestation of Argentina's profound economic and social crisis.

A nearly four-year recession has left the country virtually bankrupt, with unemployment at over 22 percent. Poverty levels have risen markedly. The latest government figures show almost 44 percent of the country's urban population, or some 14 million people, now live below the poverty line.

Thirty-two million people out of Argentina's 36 million population live in cities.

Added to this, prices are rising following a currency devaluation of almost 50 percent. President Eduardo Duhalde devalued the peso in January after it had been pegged one to one to the U.S. dollar for ten years. Many economists considered the fixed exchange rate as one of the factors hindering an economic recovery.

Mr. Duhalde, who took office on January 1, inherited the crisis from ex-President Fernando de la Rua, who resigned on December 20 following bloody protests over his failed economic policies. Congress chose Mr. Duhalde, a former governor and Senator from Argentina's dominant Peronist party, to serve out Mr. de la Rua's remaining two year term. His selection came after the interim President chosen by Congress to replace Mr. de la Rua in late December, resigned after just a week in office. All these factors have put Mr. Duhalde and his government in a difficult situation. Political analyst Ricardo Rouvier says the Duhalde government has to not only try to resolve the country's crisis, but also try to gain legitimacy.

"The government today is facing two issues," he said. "The first is the question of its legitimacy because it was not elected. So it must try to gain legitimacy via consensus and dialogue. The second is dealing with the current emergency. It has to deal with this day after day, so it is caught between legitimacy and the emergency. It has to reach consensus and strengthen itself as a government, while at the same time resolving the problems of the people and the economy. It seems like an almost impossible challenge."

Many middle class protesters taking part in the weekly "cacerolazos" say Mr. Duhalde is doomed to fail because he is part of the political class that brought the country to ruin. These protesters are angry over the currency devaluation which has reduced the value of their savings. They also are frustrated over continuing restrictions on bank withdrawals aimed at preventing a collapse of the banking system.

Most, like businessman Jorge Morgenrod, say they do not trust Mr. Duhalde or any politician to solve the crisis. "They are all mafias, capos of the mafia," he said. "They are all mafias because they make $10,000 or $15,000 a month, while the hospitals and all the social benefits there are no social benefits for anyone."

But, other than calling for elections, these protesters offer few alternatives.

Yet holding elections under the current situation might prove difficult. Analyst Rouvier, who heads a political consulting firm says an election would delay urgently needed decisions to deal with the crisis.

"What would happen to pending issues, such as negotiations with the IMF, the negotiations on the debt payments which have been suspended, and reactivating the economy? The chain of production, the system of payments have been broken," he said. "All this in a scenario in which elections are being held would be terrible. No country can call elections in such a situation because during the 30 or 40 days in which election campaigning is underway what would a transition government do, when all these problems require immediate solutions."

But the pressure on the government is building. Continuing banking restrictions, the peso's devaluation, and rising prices are making daily life increasingly difficult. January's inflation rate of 2.3 percent was the highest in many years.

President Duhalde has called for patience, saying he understands the anger and frustration of Argentines. But he also has warned of possible anarchy if the situation gets out of control.

It is unclear if Argentines are heeding his warning. Mass protests were held Wednesday, the two month anniversary of ex-President De La Rua's resignation. Some opinion surveys show Mr. Duhalde's negative ratings rising, while support is dropping. They also show an increase in the number of people who believe Mr. Duhalde will not complete his term a change from January when more people believed in the Argentine leader's staying power.