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ECONOMY | 24-01-2024 12:46

Argentina’s general strike poses test for Milei’s austerity plan

Argentina strikes: Javier Milei confronts unions in key test of austerity plan.

Argentina’s labour movement is staging a general strike that will test popular support for President Javier Milei’s austerity blitz less than two months into his Presidency. 

The protest Wednesday organised by the CGT, one of the nation’s oldest and most powerful union groups, will help set the tenor of debate as the libertarian economist attempts to slash the size of the state in a bid to tame triple-digit inflation.

“Depending on how many people they mobilise, the union will be able to demonstrate how much weight it carries at the negotiating table,” political analyst Raúl Timerman said in an interview.

After taking office in December, Milei issued a decree deregulating vast swathes of the economy and sent a sweeping package of free-market reforms to Congress. While the CGT successfully challenged labour provisions of the decree in court, a vote on the so-called 'omnibus bill' is headed for the floor of the lower house as soon as Thursday.

Milei has stuck to the bombastic rhetoric of his campaign but also taken a pragmatic turn by withdrawing a proposal to privatise state-owned oil company YPF SA from his package of legislative reforms. The bill’s passage will be crucial for his government to meet targets laid out by the International Monetary Fund in its latest review of Argentina’s $44 billion aid program, the multilateral lender’s largest.

“If the protest is massive, lawmakers will have a harder time voting in favor of the government,” said Timerman, director of Buenos Aires-based consultancy Comunicaciones Sudamericanas. “But if the protest fails, it will make clear Milei still counts on the support of the population.”

How the authorities respond to the protest, the earliest strike ever called after a presidential inauguration in Argentina, will also be telling. 

A few days after Milei was sworn in, Security Minister Patricia Bullrich announced that federal forces would be deployed to keep streets clear. Her press team reiterated that pledge Tuesday, and last week the president’s spokesman said government workers who participate in the strike would be docked a day’s pay. 

The CGT, which is expecting 200,000 people to turn out, appears undaunted. Hector Daer, the umbrella labour group’s secretary general, replied to Bullrich in a radio interview Tuesday: “Do you want me to carry 40,000 truckers in my arms or in a single-file line?”

Work stoppages are set to start at noon and last through midnight, while public transport is scheduled to run through the late afternoon in order to facilitate access to the demonstrations. The protests are being led by unions representing truckers, sanitation, construction and gas station workers.

 

Airlines and shipping

The strike has already disrupted transportation. Airlines including Gol Linhas Aereas SA, Aerolíneas Argentinas SA and JetSmart have announced cancellations or delays for Argentina flights, while shippers including Agencia Maritima Nabsa SA told clients the protests will affect port operations.

Milei’s party holds just 15 percent of the lower house Chamber of Deputies and 10 percent of the Senate, while the Peronist movement it defeated and its left-wing allies have just under half of votes in each chamber. The libertarians are counting on the support of the main pro-business opposition bloc founded by former president Mauricio Macri and more moderate members of two other parties to push through their reforms.

The strike could tilt political will in Milei’s favour if it unites a fractured political group pushing for change, according to political scientist Gustavo Marangoni.

“Ultimately, politics boils down to rivalries,” said Marangoni, director of M&R Asociados in Buenos Aires. “The government will say to the different factions, ‘We may have our differences, but we are against the Argentina that today took to the streets.’”

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by Manuela Tobias, Bloomberg

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