Monday, August 8, 2022
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OPINION AND ANALYSIS | 26-07-2022 12:42

Burnin’ and a-lootin’ tonight

Social tensions in Argentina have experienced and in crescendo in tandem with the value of the alternative peso-dollar exchange rates which have been reaching record highs as of late—which means the value of the peso has never been lower—to the point where massive protests and looting are no longer out of the question.

Social tensions in Argentina have experienced and in crescendo in tandem with the value of the alternative peso-dollar exchange rates which have been reaching record highs as of late—which means the value of the peso has never been lower—to the point where massive protests and looting are no longer out of the question. At least according to Juan Grabois, one of the leaders of the “popular movements” that organize informal laborers and those on the fringes of the socio-economic ecosystem. It isn’t entirely clear whether Grabos, who’s increased his level of aggression in recent public discourses, was making a threat or a prediction. At the end of the day his organization, the Union of Workers of the Popular Economy (UTEP) is one of several groups that intermediates in multi-million peso disbursements of emergency payments by the government to certain sectors of the economy that are “outside” the so-called protective arms of the powerful Argentine unions mainly centered in the General Confederation of Labor, which represents formal workers. Yet, underlying these agitated days are the generalized shortcomings of the Fernández-Fernández administration, in particular when it comes to its failed economic policies, following in the footsteps of the previous two presidencies.

Speaking of blood in the streets, along with burning and looting immediately takes Argentines back to the worst days of 2001 and 2002, when the nation suffered its deepest socio-economic-political implosion since the return of democracy in 1983. Indeed, the general configuration of Argentine society changed as a consequence of 2001. The emergence of a large and growing mass of poor slowly being marginalized from the system, supported by emergency government programs that became permanent, gave rise to today’s popular movements. Over time these groups of piqueteros or street protesters evolved into large organizations with political representation in the legislature and even the political control of certain ministries and therefore official budget allocations.

Depending on how you count there’s between 3.2 million and 7.5 million members of the “popular economy,” which are groups of people that live outside of formal social institutions meaning that their living conditions are absolutely precarious. The Social Development Ministry has created a National Registry of Popular Economy Workers (ReNaTEP) which has surveyed some 3.2 million people. They are 57.8 percent women, 64.3 percent of them under 35 years of age, and 61.1 percent of which haven’t finished high school. About a third of them live in the Province of Buenos Aires with another 3.5 percent in the City. Their job has made them trash collectors and recyclers, street salesmen, nannies and home cleaning workers, part of family farms, fishermen and members of cooperatives. A study by the Citra Center for Investigations (Conicet-Umet) catalogued them as making less than 1.5 basic salaries, some $48.000 a month.

The popular economy is at the center of a global debate that has become absolutely politicized in Argentina and probably across the globe. Growing income disparity across the globe as a consequence of the exhaustion of an economic model based on financialized capital has excluded billions of people across the globe from the incredible increases in wealth generated since the fall of the Berlin Wall. Labor has evolved and is less people-intensive and increasingly specialized, while purely operative jobs are gradually being absorbed by robots. The elongation of human life cycles means people will remain active until older age. How much labor will our economic system need? There are global debates about moving to a four-day workweek and even reducing the workday to four hours a day in order to double the number of with jobs.

Thus, members of the popular economy who are uneducated will lack the capacities and skills to enter the formal workforce, particularly in poor and developing nations like Argentina. Grabois and others in his camp have called for a “universal salary” the for seven and a half million people he and his colleagues represent. The idea would be for the government to pay members of the popular economy the value of the canasta básica alimentaria which represents the basic basket of food and others goods, valued by INDEC official stastistics agency at $15,057 in its latest reading in June. That would have a cost of $113 billion pesos a month, or $1.4 trillion a year, about US$10 billion at the official exchange rate. This would be added to several other assistance programs already in place, and is also part of the debate. Vice president Cristina Fernández de Kirchner counter intuitively spoke about this in one of her recent public addresses, noting Peronism is not about “social plans” but about formal labor. Laburo, in Argentine slang, the successful lawyer who’s spent the past four decades in the public sector and has become a dollar millionaire reminded us.

While it is fair to have a debate regarding a universal basic income, Grabois is actually part of a political machine that is vying for power at a moment of extreme weakness for the government. After the bombastic resignation of Martín Guzmán, Economy Minister Silvina Batakis has taken over of the public finances and quickly realized that they are literally out of money. According to Perfil’s Alejandro Gommel from Casa Rosada, she told governors, mayors and bankers that the government is out of dollars and needs to keep the purchases imported energy going at least for the next two months in order to get through the winter. The peso-dollar exchange rate has gone through the roof as the Fernández-Fernández administration fails to recreate any semblance of confidence leading to further decouplings of the currency markets and an imminent risk of a sudden devaluation. Inflation is uncontrollable. And Cristina hasn’t publicly supported Batakis.

For several years Argentina has escaped the fate of several of our Latin American neighbors that were overrun by social unrest. In great part this had to do with large networks of government assistance put in place in the aftermath of 2001. Now, the Graboises of the land are threatening to turn on the government, which is run by a pan-Peronist front that includes Mrs. Fernández de Kirchner. In a piece released in 1973, Bob Marley sang: “How many rivers do we have to cross before we can talk to the boss? All we got, it seems, we have lost, we must have really paid the cost. That’s why we gonna be burnin’ and a-lootin tonight.”

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Agustino Fontevecchia

Agustino Fontevecchia

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