Argentina a Decade after the Collapse

In early December 2001 the Argentine economy and society entered into technical collapse. On December 19 the government announced the new budget, which included massive layoffs, wage reductions, rollbacks in pensions, and cutbacks in teacher incomes. Thousands of people turned out to demonstrate and to demand food from local supermarkets. In Córdoba City municipal workers attacked City Hall and literally wrecked it. In Mendoza, Buenos Aires, Tucumán, Rosario, Corrientes, and Neuquén people sacked supermarkets and battled the police. By the end of the day there were several dead, over a hundred wounded, and hundreds arrested. The government declared a state of siege. In spite of it, that evening the middle class turned out in force, banging pots and pans, to demand the resignation of the minister of the economy, Domingo Cavallo. On December 20 Cavallo resigned and was prevented from fleeing the country for Miami, eventually landing in jail. The demonstrations went on, with thousands fighting the security forces in front of the Presidential Palace. By late afternoon the toll of dead and wounded had doubled, and President de la Rúa, finding himself isolated and repudiated by the population, presented his resignation.

After he resigned, a series of politicians succeeded to the presidency for very short periods of time until the Peronist caudillo Senator Eduardo Duhalde was appointed president and stabilized the situation enough to call for elections in October 2002. Duhalde chose the Patagonian governor Néstor Kirchner as his candidate, and Kirchner was then elected with 22 percent of the vote when former President Carlos Menem, who had won a plurality (24.5 percent), declined to participate in a runoff. Though Menem had received the votes of almost 5 million Argentines, the fact that unofficial polls showed that most voters opposed him persuaded him not to stand in a runoff against Kirchner, who appeared poised to win by a comfortable margin.The cancellation of the runoff meant that for the first time in Argentine history the candidate who came in second became president. In office, Kirchner experienced an impressive increase in electoral support and was succeeded in 2007 by his wife, Cristina Fernández, who received 45 percent of the vote to become the first woman ever to be elected by popular ballot in Argentina. Though the Kirchners lost the 2007 legislative elections, garnering only 31 percent of the vote, Cristina was reelected in 2011 with a massive 54 percent.

Néstor Kirchner, who had been the Peronist governor of Santa Cruz Province and a supporter of Menem over the previous decade, initiated changes that have been the subject of much debate. Those who view the Kirchner era positively highlight achievements such as investigating human rights abuses, renegotiating the foreign debt and avoiding another economic debacle during the 2008 global crisis, “renationalizing” the previously privatized state oil company YPF, deepening economic ties with China, passing a media reform law that targeted the dominant Clarín conglomerate and promoted independent, regional broadcasters, legalizing same-sex marriage, and permitting individuals to legally change their name and sex. Those with a more critical perspective point to corruption, authoritarianism, repression, hidden unemployment, concentration of wealth, legal improvements with no enforcement, contradictory foreign policies, and the fact that, despite YPF, despite having sold 51 percent of its stock to the government, remains a private-for-profit corporation. Kirchner supporters give greater weight to the obstacles the Kirchners confronted while critics consider these obstacles simply excuses for a conservative political will.

Even we, as the editors of these two issues, have not escaped the divisions over the practices and results of the Kirchner governments and find ourselves on opposite sides of most of these debates. Although it is almost impossible to briefly summarize these differences, each of us has tried to present the gist of his position below to give the reader a better perspective on the debates that contextualize the articles in this issue and the next.

From Nigra’s perspective the political process begun in 2003 has positively transformed the social, political, and economic vision of the Argentine people. After the strange consensus of the neoliberal 1990s and as a result of the 2001 collapse, a substantial part of the Argentine citizenry has accepted the Peronist perspective of regulated capitalism with income distribution (which is also a result of the fact that Peronism is a political machine akin to Mexico’s Partido Revolucionario Institucional). At the same time, there has been widespread acceptance of the Kirchners’ policy of defending and extending human rights in the broad sense (from continuing the trials of human rights violators from the dirty war era to legalizing same-sex marriage, recognizing gender diversity, and restoring social security coverage for those expelled from the program during the Menemist decade). Although the universal subsidy for children and single mothers does not enjoy consensus among the middle and high income sectors, among the poor access to this crucial benefit and the social security expansion for senior citizens explains the strength of the government’s electoral support. At the same time, in the middle and upper-middle classes the government’s daring to confront the media monopolies is a milestone that has earned it the support of many.

This does not mean that, as in Brazil under Lula and Dilma, sectors that have significantly benefited economically from the Kirchner decade do not now strongly question aspects of economic and social policies (such as inflation, inability to ensure personal safety, and the future rate of exchange to the U.S. dollar). This has affected Kirchnerism in terms of electoral support, but it has consolidated support among a solid 30 percent of the electorate and therefore, even if defeated in the presidential election of 2015, it will remain a relevant actor in Argentine politics. Nigra sees the Argentine electorate as divided into three roughly equal parts: the pro-Kirchner 30 percent, another 30 percent that supports the center right, and a remaining 30 percent consisting of a heterogeneous center left characterized mainly by anti-Peronism. Thus the October 2015 elections will probably be decided, as in most Western nations, by the evolution of the economy in the previous 12 months.

From a more critical perspective, Pozzi argues that Kirchnerism has few similarities with traditional Peronism except in its more unsavory components. He considers the “achievements” under the Kirchners to have been at best mixed and at worst cosmetic, while its problems are myriad, ranging from an erratic foreign policy to massive corruption, the violation of constitutional rights and persecution of opposition figures, and red-baiting of the left. For instance, although there have been over 800 persons tried for crimes committed during the 1976-1983 military dictatorship, all have been retired officers or people without any kind of power. Powerful figures continue to enjoy impunity. For instance, General César Milani, accused by human rights groups of multiple violations when he was a lieutenant, remains head of the army; Gerardo Martínez, head of the construction workers’ union, has been shown to belong to the infamous 601 Army Intelligence Battallion, and there is proof that Hugo Moyano of the teamsters’ union belonged to the 1970s paramilitary death squads. Thus, though the trials have been a positive event, they have hardly affected the repressive apparatus, as has been shown in the several disappearances over the past 10 years, starting with that of the key witness Julio López before he could complete his testimony against his torturers. Similarly, deaths at the hands of trigger-happy police have been at an all-time high under the Kirchners, according to information compiled by the Coordinadora contra la Represión Policial e Institucional (CORREPI, 1988–2014).The progressive labor federation Central de Trabajadores de la Argentina has claimed that over 4,000 activists are awaiting trial for carrying out illegal strikes or for public demonstrations, which amounts to “criminalizing social protest” (CTA, 2014b). The Qom indigenous community has often denounced state repression and the murder of its activists.

In terms of income redistribution, critics such as the national legislator Claudio Lozano ¹ question official statistics and assert that poverty remains at 31 percent, higher than at any time previous except in 2001 (Lozano, 2012), in contrast to the record business profits celebrated by Cristina Kirchner. Enforcement of the new laws on abortion and same-sex marriage has been lax in districts governed by allies of the Kirchners, whereas the areas in the forefront, Buenos Aires City, Santa Fe Province, and Córdoba, are governed by the opposition. Although the new media reform law is noticeably progressive, funds for public interest or community radio or newspapers are limited.

In Pozzi’s view, despite the Kirchners’ progressive discourse they are in reality conservative populists, which explains why they were in the forefront of Menemist politicians in the 1990s and have consistently relied on the support of the former neoliberal president. Many of their conflicts with the “establishment” are not over ideological differences but over how to share power. For Pozzi they are a postmodern version of Peronism: instead of the traditional Peronist slogan “Mejor que decir es hacer” (It is better to act than to speak), the Kirchners believe that “es mejor decir que hacer” (it is better to speak than to act). It is all about discourse.

Nonetheless, we agree that the crisis of neoliberalism was not confined to Argentina; by 2008 it had become global, devastating even the United States and other core capitalist economies. And Argentina was not alone in making only limited and uneven progress toward an alternative economic model amidst difficult and complex challenges, among them eradicating poverty, incentivizing industrialization while protecting national industries, and diversifying the economy while coddling the landed farming elite. Moreover, the country has been deeply affected by financial speculation and deregulation, which continues to allow financial institutions to transfer their earnings from location to location, promoting trickery and predation.

As Argentines continue their struggle for a more equitable and prosperous future, Latin American Perspectives offers a retrospective analysis of the crisis and the related structural changes. The contributors to this first of two issues begin by considering whether the 2001 protests were spontaneous or orchestrated. The de la Rúa government claimed that activists and some politicians had contributed to destabilizing it, but Andrés Malamud, in “Social Revolution or Political Takeover? The Argentine Collapse of 2001 Reassessed,” argues that the reality was more complex. He examines the context for the events of December 2001 to assess the degree to which the main opposition party was involved and concludes that

while it cannot be said that the [Peronist Partido Justicialista] aimed to topple the president, its leaders were aware of the fragility of the ruling coalition and acted accordingly. Their goal was not to support the president but to secure his office should he step down. They did not bring about de la Rúa’s downfall, but they did not do much to prevent it.

Ultimately, Malamud has highlighted historical continuities that underlie contemporary Argentine politics, “no matter how revolutionary the events of 2001 may have appeared.”

While Malamud focuses on the political system, Gastón Beltrán, in “The Discreet Charm of Neoliberalism: The Paradox of Argentine Business Support for Market Reforms,” presents a complementary perspective by focusing on Argentine business. Businesspeople have been often accused of being behind the neoliberal reforms that ultimately caused the crisis. Beltrán’s interesting piece flies in the face of received wisdom by challenging the rationality model of business behavior. “Instead of focusing on why businessmen supported the reforms before they were implemented,” he seeks to understand “why they kept on supporting them for almost a decade.” Their support, he argues, was crucial to the introduction of market-oriented reforms in the early 1990s, but “the reforms did not turn out as expected. No sooner were they implemented than many individual businesses and sectors discovered that the policies they had warmly greeted were engendering new economic tribulations that put their viability at risk.” This seemingly irrational behavior was not based on “a rational assessment of costs and benefits but driven by various political, cultural, and organizational factors.”

Beltrán’s article can be contrasted with the one by Nicolás Cherny, “The Influence of Interest Groups on Government: The Case of the 2001 Argentine Crisis.” Cherny discusses the causes of the 2001 crisis, suggesting that the sale of state-run enterprises reinforced the power of the financial sector and thus linking the collapse to the Menem privatizations. According to him, different analysts have considered the crisis merely a technical and political problem instead of regarding it as a result of a new pattern of capital accumulation that emerged in the 1990s.

What these three contributors suggest is that Argentina has changed as a result of the neoliberal restructuring and the 2001 crisis. Undoubtedly the record shows that over the past decade there has been record growth under the political hegemony of Peronism, but the question remains what is meant by “growth.” If, as Cherny suggests, it is all the result of a new pattern of accumulation, then we have to question or at least redefine terms such as “economic growth” and “recovery.” In fact the Kirchners insist that this has been a decade of “growth like none other.” ² And yet economic indicators have improved only relative to those during the 2001 crisis, not compared with those for 1995, the apex of the Menem “growth” period, or those for 1975, the beginning of a downturn in terms of salary purchasing power. Even if we consider the period to have been a decade of unparalleled growth, have living conditions improved significantly, and, if so, for whom? In fact, though employment and purchasing power have improved since 2003, there have been significant social changes over the past three decades: for the first time since the 1930s one in every four Argentines is either unemployed or has occasional employment; ³ a third of all wage earners are employed “off the books” (en negro); job insecurity has climbed to record levels; social welfare has all but disappeared for over half the population; union membership is at an all-time low of 35 % a whole generation has never held a regular job; educational levels have dropped and illiteracy has increased relative to 1989; and the gap between the richest and the poorest 10 percent has widened. President Cristina Fernández has stated repeatedly that business has never made a higher rate of profit. In fact, business in Argentina is heavily subsidized by the state: from private gas and light companies all the way to racetracks and the restaurants in Buenos Aires’s chic Puerto Madero. These subsidies, begun under the Menem government and considered one of the causes of the 2001 debacle, continued unchanged over the past decade. At the same time this suggests a different response to Gastón Beltrán’s “irrational business model.” Far from being irrational, Argentine businessmen have been guaranteed a high rate of return no matter how irrational the economic policies followed by the government: the mechanism of subsidies protects them from market downturns.

At the same time the Kirchner governments have attempted a series of progressive reforms to ameliorate the social situation, including expanding subsidies to the unemployed and to poor families to include over 2 million persons (5 percent of the population), passing new laws, campaigning for human, gay, and women’s rights, and taking on some sectors of the traditional establishment. Some critics claim that these were “halfhearted” and “cosmetic” measures, but there is no doubt that human rights have improved, as have the legal safeguards for gays and women. A good example of the reforms attempted after the 2001 crisis and their problems can be seen in Debora Lopreite’s “Gender Policies in Argentina after Neoliberalism: Opportunities and Obstacles for Women’s Rights,” which focuses on the changes in gender policy during the post-neoliberal period under the Kirchner governments (2003–2011). It contrasts the new gender policies with the policies of the neoliberal and social-conservative government of Carlos Menem (1989–1999), focusing on the role played by the Consejo Nacional de la Mujer (National Woman’s Council) and female representation in the National Congress after the adoption of the legislative quota. ⁴

Pamina Firchow’s article “Power and Resistace in the Shaping of Argentine Domestic Policy” uses abundant data in the framework of Foucault’s “contention” and “antagonism strategies” to gain insight in the Argentine situation. Particularly interesting is the discussion of forms of resistance and their effect on power relations. The piece discusses the main issues and fault lines of the popular movement that emerged from the 2001 crisis, based on the constructs of Holloway and Foucault. Firchow plunges into the discussion of whether these protests have changed or challenged power relations in Argentina, since one of the issues debated over the past few years is the delinking of mass protest and the political superstructure. For instance, the Cordobazo (and other “-azos”) of the 1970s brought down ministers and even governments, but no protest since 1983 had had that effect until protests put an end ahead of time to the Raúl Alfonsín presidency and forced the resignation of Fernando de la Rúa’s government. It would seem that the changes in the political system have left no alternative to unresponsive elected governments than their collapse.

The effects of the crisis on a cultural level are considered by Graciela Schuster in “The Concept of the Visible between Art and Politics.” Schuster links art to politics and crisis, considering the case of art and the workers of Brukman, a textile factory under workers’ control. Through the activities of the Arte y Confección collective, workers joined with artists to link art with labor actions. Other art collectives participated in 2001, such as Argentina Arde, the Taller Popular de Serigrafía, Contra-Imagen, Etcétera, and the Grupo de Arte Callejero, projects such as Indymedia (alternative communications media), cultural developments such as those carried out by the unemployed movement in different neighborhoods, and debates on art and politics such as the roundtable “Light Pink Art or Rosa Luxemburg Art” at the Buenos Aires Museum of Latin American Art in 2003. Schuster argues that “art theory naturalistically links what is shown and what is said” and this “allows us to understand art as an effective participant in the response to particular crises, one that enjoys a role in the transformation of and communion with the social through sensible expression.”

A journalist from Córdoba Province, Gustavo Di Palma, once advanced the opinion that the Argentine economy went into tailspin every 10 years or so. He remembered that the 1949 downturn had been followed by the one in 1960–1961, the 1969 crisis by the 1979 depression, and the 1989 hunger riots by the 2001 collapse. If so, then it would seem that the 2001 crisis was not an exception but the normal state of affairs. Of course, he was exaggerating: the 1949 recession cannot be compared to the 1969 Cordobazo or to the 1989 and 2001 depressions. However, it is useful to consider a certain natural fatalism that is widespread in Argentine culture, a sense that Argentina is destined to fail. This idea is expressed in a popular joke: What do Julio Cortázar, the architect César Pelli, the conductor Daniel Baremboim, the footballers Diego Maradona and Lionel Messi, Che Guevara, and Pope Francis have in common? They all had to leave Argentina in order to succeed in life. This negative view is grounded in a culture and lore in which societal crisis is accepted as a given and people compensate with extensive informal support networks that are revealed in moments of crisis. Thus, though the Argentine state would seem to have collapsed several times over the past half century, the trenches of civil society permit a reconstruction without modifying the structural problems that generated the crisis in the first place. Argentines seem to have made their own the French saying “Plus ça change, plus c’est la même chose,” ⁵ meaning that even when something seems new it is just history repeating itself. Perhaps this is one of the lessons of the 2001 Argentine crisis and the decade that followed it.

During that period, as Argentines confronted their dire situation, the crisis spurred the growth of left-wing and grassroots activism: Communists and Trotskyists gained hundreds of new militants, and the unemployed movement, with its myriad organizations, became consolidated, as did the peasant movement in northwestern Argentina. The popular movement remained fragmented and, though highly combative, never seemed to come together into a political alternative. These and other issues dealing with labor and social movement activism are analyzed in the forthcoming March 2015 issue.