Riots Erupt in Argentina Unpaid Provincial Workers Turn to Violence

By Anthony Faiola Washington Post Foreign Service Saturday, August 14, 1999; Page A11

BUENOS AIRES, Aug. 13As Argentina weathers its worst recession in more than a decade, riots and protests by state employees and unemployed workers in the nation's interior are escalating to levels not seen in years.

Riots were raging out of control tonight in the southern Patagonian province of Neuquen, where more than 40 percent of the work force is unemployed and the provincial government has not paid its workers for more than three months. Angry protesters spilled into the streets screaming, "Argentina! Argentina!" as they attacked a branch of Citibank and stoned the governor's residence.

Violent skirmishes and protests also were reported in the provinces of Tucuman, Cordoba, Corrientes and Tierra del Fuego as police pushed back thousands of protesters with rubber bullets and tear gas. More than 10 protesters and dozens of police officers have been wounded in skirmishes this week.

The riots erupted in response to the way Argentina's severe, nationwide recession intensified a mounting fiscal crisis in the provinces. With unemployment near 15 percent nationwide, and more than double that in some provinces, provincial governments' tax revenues are evaporating and their bills are going unpaid. In addition to being unable to meet their payrolls, many local governments have been forced to fire thousands of workers in recent weeks. In some provinces, there is not even enough money to pay for school lunches.

Protesting alongside affected state workers are jobless Argentines who blame their plight on the government's privatization program of the 1990s, which they say spurred unemployment as the corporate owners of formerly state-run industries fired tens of thousands of workers.

Economic analysts say, however, that the enormous budget deficits faced by provincial governments are mostly the result of overspending, corruption and poor management. For instance, the small northern province Corrientes, with a population of 800,000, has a deficit of $1.4 billion--roughly equal to the total foreign debt of Paraguay.

"There is going to be no easy exit for the provinces," Rosendo Fraga, a Buenos Aires-based political analyst. "But the one thing you can say is that they've brought the problems on themselves."

The turmoil in Argentina comes at a time when most of Latin America is in recession and shares many of the same problems. Freewheeling spending and widespread corruption have pushed many provincial governments in Argentina, Brazil, Ecuador and other nations to the brink of insolvency.

"It's simple: The governments in the provinces have spent irresponsibly and now the time to pay for their errors has come," said Marie Emhart, an economist at the Buenos Aires-based Latin American Economic Research Foundation. "Recession has come and has dried up tax revenue, and the provinces in many cases just don't have enough money to pay their workers."

Indeed, some local governments are meeting their payrolls by doling out vouchers that can be spent only within the borders of the province. Since not all stores accept such certificates, workers often sell them on the black market for the national currency, the peso, at a fraction of their face value.

The federal government in Buenos Aires, facing a growing budget deficit of its own, is nevertheless offering bailout packages of several million dollars to some states. But economists say it is likely that unrest will continue until the economy picks up again, which is not forecast until the end of this year or the beginning of next.

http://search.washingtonpost.com/wp-srv/WPlate/1999-08/14/055l-081499-idx.html

Pollies Response: **Stupidity got us into this mess-why c'ant it get us out.

-- Drken (Drken@bubble.gone), August 15, 1999

Answers

Shades of America come April.

-- INVAR (gundark@sw.net), August 15, 1999.

Hey, World Bank hasn't paid some of their employees for months either. I'll bet some of those folks are on the warpath by now as well.

Coming to a job near you........

-- Will continue (farming@home.com), August 15, 1999.

...You can almost hear the thunder of the looming tidal wave of chaos.

JJ

-- Jeremiah Jetson (laterthan@uthink.y2k), August 15, 1999.

George my friend,

you're in Argentina - what's the scoop???

-- Andy (2000EOD@prodigy.net), August 15, 1999.

Lets put it this way...

THERE WOULD HAVE BEEN BANK RUNS IF THEY ***HAD*** ANY MONEY TO TAKE OUT...

-- Andy (2000EOD@prodigy.net), August 15, 1999.

hmmm...Brazil cannot be to far behind.

When's that next chunk of Extortion Money (interst payment) due the IMF...

Has anyone studied the the different levels of Riot Scenarios?

I mean, a riot is not a RIOT...

1. Localized / Frenzied people / Much Looting

2. National / People realize they've been HAD / Plain o'l PISSED off and Hungry / Demanding Change

3. Worldwide / Y2k??? / Has there ever been a WORLDWIDE RIOT???

Folks...The Sytem is Broken...it's not only computers...it's only a matter of time...

-- Nailbender (Not_In_America@Midnight.net), August 16, 1999.

Its all getting too real.

-- R (riversoma@aol.com), August 16, 1999.

If it wasn't so SAD, it'd be funny...

"But economists say it is likely that unrest will continue until the economy picks up again, which is not forecast until the end of this year or the beginning of next."

These ECONOMIST's must live in a CAVE...

Ya...perfect time to turn an economy around... 1/1/00

-- Nailbender (Not_In_America@Midnight.net), August 16, 1999.

Nah, it can't happen here!

"Those people" (diversity aside) must be inferior or something. The government would never let it happen here. After all, we have a ? trillion dollar surplus. The only problem is figuring out how to spend all that money. God smiles on us (forget 30million+ abortions, "Piss Christ" funded by tax money, outlawing ten commandments - I'm sure He understands).

Now seriously: note that what the economists call "unrest" is probably viewed as near "life or death" by the people. When it happens here it'll be the same "Sure some people haven't eaten for two weeks, but the essential economic indicators are strong" or the like.

-- Jon Johnson (narnia4@usa.net), August 16, 1999.

Andy buddy, yes I'm here allright, and I confirm Anthony Faiola's very accurate description of current events in Argentina. Actually, if analysis is projected into year 2000 the situation is far worse because an enormous, unpayable fraction of Argentina's public and private foreign debt expires.

Now then, Y2K-wise Argentina has done less than 10% of what it should have. One powerfull reason, besides other obvious ones, is the fact that nationwide provincial & presidential elections will take place in October 1999. New provincial governments and federal administrators step into office on December 10, 1999. President Menem, a very special character, is so ego-centric he doesn't even care about the possibility that his own party's candidate may get elected President (Mr.Duhalde) precisely at the point in time when Y2K implodes what's left of the Argentine economy. Actually he has always insisted that he should have been allowed to run for a third presidential term. From the minute he was not allowed to do so he has publicly worked against his own party's candidate (Mr.Duhalde) and my personal feeling is that he WANTS y2k to happen when he is no longer in charge (he KNOWS all about Y2K by the way). The opposition doesn't care to address Y2K either mainly to be able to blame it on him (Mr. Menem). So, just like children in kindergarden, they play with the fate of millions of people. I know all of the above all too well I'm afraid.

Argentina's deep crisis also involves Brazil (in deeper doo-doo still!) which happens to be the "mother" of at least half of Argentina's evils.

And then we are suddenly talking about all of Latin America and its 100 billion dollar a year of US imports, and its 500 billion dollar foreign debt.

So... domino effect, cascading cross-defaults, non-payment of due debt, etc., etc. is the new name of the game. If you want to add Russia's problems, China's coming devaluation, Japan's non-performing banks, etc., etc, I don't mind. I'm all ears.

Anyone still care to keep talking about GLOBALIZATION (what's that??)...

PROTECTIONSIM, self-sustainability, closed borders is the new game of the game guys, trust me on this one. The international supply chain of goods and services will be gone down the drain soon. Trust me on this one.

Take care

-- George (jvilches@sminter.com.ar), August 16, 1999.

Anyone know whether Evita liked to mudwrestle?

-- King of Spain (madrid@aol.com), August 16, 1999.

George:

Thanks for the on the scenes update. Protectionism always plays well to the voters, regardless of the damage it is actually doing them.

-- Jon Williamson (jwilliamson003@sprintmail.com), August 16, 1999.

Hey George,

Fascinating - is julio iglesias (Menem) still one for the ladies :) Sounds a little like slick Willie in that regard - everything is in a serious mess worldwide isn't it?

Gotta go stock up on coffee - the new gold in the USA when imports from LA stop - that and corned beef!!!

-- Andy (2000EOD@prodigy.net), August 16, 1999.

Will C.

Just spoke with a close friend who works at The World Bank.

The Managers or Budget people have been recieving harrasments and threats at their homes, due to the fiasco. One Budget manager, a little woman, was even pushed so hard that she fell to the ground. These are not happy times at The World Bank.

My friend estimated that more than a thousand people, contractors & part time workers, had not recieved payment. It could well be more.

The media doesn't have a clue, and if they did know and didn't report it shame on them.

Father

-- Thomas G. Hale (hale.tg@att.net), August 16, 1999.

I heard on the radio today that the world bank issued a statement that y2k was going to be disasterous. Anybody else hear/or know anything about this statement?

-- Moore Dinty moore (not@thistime.com), August 16, 1999.

Thomas, that's disheartening..... thanks for passing it along.

-- lisa (lisa@work.now), August 16, 1999.