May 22, 2013
The changing of the guards
A wage protest by the Border and Coast guards looks effectively over, but there are more challenges ahead for CFK
Argentine presidents go through rough times. At times the going gets so rough that they have to pick up their bags and go home ahead of schedule. Think of all those Argentine presidents who never finished a mandate. To name a few: Juan Perón, Arturo Illia, Arturo Frondizi, Raúl Alfonsín and Fernando de la Rúa. Now think for a minute of a society whose presidents were eased, pushed, and shoved out of office consistenly for a century and beyond.
Now think this: maybe the notion that a president can be kicked out is part of the culture here. You don’t like President Cristina Fernández de Kirchner? Well, maybe making a din with a kitchen utensil will see her out — some think.
If you consider the odds in the past, even when she was re-elected with 54 percent of the votes life in office was never going to be easy for Fernández de Kirchner.
The opposition press is throwing one negative story after another at the President. Tremendous pressure is piling up. The President is engaged in a bruising confrontation with the media group Clarín.
Clarín, the group’s newspaper, has shown no mercy with presidents of the past when their popularity has plummeted. But what if times have changed? What if Fernández de Kirchner actually withstands the pressure? What if the times when a president could be toppled just by yapping negatively for a fortnight are a thing of the past?
The President has shown resilience. And more importantly, Argentina, even with high inflation, is now in good economic shape basically due to soaring international commodity prices. Fernández de Kirchner’s popularity rating is currently no higher than 40 percent, according to polls. On September 13, thousands took to the streets bashing pots and pans across the country to protest about crime, inflation, currency exchange controls and a possible bid by the ruling party to reform the Constitution to allow the President a shot at seeking a third consecutive mandate.
Then on October 2, the Border and Coast guards launched a protest over a decree to alter the payment of extras that effectively lowered the salaries of many officers. The protest by the guards eventually evolved into a call for a pay increase. The Border Guards were especially vocal in demanding a basic net salary of 7,000 pesos a month. The troops protesting said they had nothing else on their minds other than asking for a pay increase. “We are with democracy,” they said. The protests were staged by off-duty officers, meaning that technically this was not a mutiny. Yet the sight of men and women in uniform defying authority brought back stomach-churning memories of past military rebellions during democratic governments. Soon it was evident that the guards lacked political support. Buenos Aires Mayor Mauricio Macri, the leader of the centre-right opposition party PRO, urged them to “go back home to their families.” A Supreme Court justice has said the troops had to understand that they are different from other workers because they carry guns. Yet at the start of this week the protest was still not over.
On Tuesday, Cabinet Chief Juan Manuel Abal Medina and Economy Minister Hernán Lorenzino called a press conference to announce that the demand for a starting salary of 7,000 pesos could not be met. The controversial decree, the officials said, would not be quashed. Abal Medina insisted that the decree had been maliciously interpreted by the top brass of the Border and Coast guards, angry because they would see their pay slashed when the system of extras was reformed. It was not designed to lower the pay of the rank and file, Abal Medina said.
Lorenzino pulled out of the International Monetary Fund’s meeting in Tokyo to deal with the crisis. A crisis it was.
On Tuesday night, after the ministers spoke, a small group of Border and Coast guards marched on Plaza de Mayo. On Wednesday, Raúl Garré, the brother of Security Minister Nilda Garré and a member of her Cabinet, resigned reportedly because he had written the decree that was signed by his sister and the President. But also on Wednesday the protest suddenly seemed to be over. There were no more off-duty officers yelling outside the Coast Guard headquarters in Puerto Madero and the Border Guards headquarters in Retiro. An order had been issued summoning all troops to report for duty. At least eight Border Guards who headed the protest, including one Raúl Maza, were also suspended.
On Thursday, the Border Guard were back at the office, so to speak, and taking orders from Security Secretary Sergio Berni, an army doctor on leave and a staunch Kirchnerite. The Borders Guards were deployed on a highway to clear a protest by a group of about 50 striking bus drivers. Berni surveyed the scene from a helicopter. By then Maza had declared that the “battle” over pay had been “lost” — but he vowed that the demands will continue.
The strike on the highway by the number 60 bus line drivers was small. But Berni, who reportedly had opposed issuing the decree, was sending out the symbolic message that, after all was said and done, the national government was still in control of the situation. But all, alas, is never said and done in Argentina.
Maza, the punished Border Guard, has vowed that the force plans to join a national strike if it is called by the anti-government factions of the CTA and CGT trade union groupings. The crisis caused by the protesting guards looked ugly. It now looks like it’s practically over. But there will be more punishing situations for the President to deal with between now and 2015.
State worker Pablo Micheli, the leader of the CTA faction that opposes the national government, on Wednesday addressed a rally in Plaza de Mayo of at least 20,000 workers. The protest was backed by teamster Hugo Moyano, the leader of the anti-government faction of the CGT. Moyano did not personally attend the rally. But the teamsters (and his two sons Pablo and Facundo Moyano) did attend. Micheli announced, after a telephone conversation with Moyano, that plans were being readied to hold a national strike “before the end of the year.”
The trade unions, like much of polarized Argentina, are living in two worlds. Both the CTA and the CGT have pro-government factions. The pro-CFK CGT includes the large industrial unions, the UPCN civil servants and even the so-called “fat-cats,” the old school trade union leaders who offered support for the neoconservative economic policies introduced by Carlos Menem in the 90s.
Metal worker Antonio Caló, the newly appointed leader of the pro-government CGT, met with Fernández de Kirchner in Government House on Tuesday. Ask Caló’s UOM metal workers union and they will offer full support for Fernández de Kirchner. The UOM (and also unions like the SMATA auto industry workers union) claim they have flourished since Néstor Kirchner, the president’s late husband and predecessor, first rose to power in 2003 and embraced unorthodox economic policies.
That unorthodoxy has continued to this very day. Most policies are now dictated by Deputy Economy Minister Axel Kicillof, an economist in his forties who was recently described by a Wall Street Journal columnist as “neo-Marxist.” The unorthodox recipes include currency exchange controls that now make it practically impossible for the average Argentine to purchase dollars. The controls were first introduced to deal with a run on banks last November and have grown stricter.
So severe are those controls that Chaco province’s bid to purchase dollars to pay a debt bond has been turned down by authorities. The “Chaco effect” gave the markets the jitters. Some ratings agencies started to wonder if Chaco, that only needed to buy about 260,000 dollars, had effectively defaulted on its debt. The jitters got worse when Gabriel Mariotto, Buenos Aires province’s lieutenant governor, said that Chaco was a “valuable precedent” for other provinces. For a minute the question was if Buenos Aires province and even Argentina’s national government were now moving to “pesofy” their debt obligations.
No, said the Central Bank. Chaco’s debt is in a foreign currency and under Argentine law. All debts in hard-currency and under overseas laws will be paid, the Central Bank said. Mariotto, a staunch Kirchnerite, has at times been at odds with Buenos Aires province Governor Daniel Scioli, a moderate. But Scioli administration officials scrambled to say that the province will pay in dollars and euros all its debts denominated in those currencies.
At times the national government opens so many fronts that it can’t keep up with itself. The ruling party has decided to drop its bid to “sack” Leandro Despouy as auditor general after the opposition Radical Civic Union put up a fight.
Debt, meanwhile, is a difficult word in Argentina. The country is still dealing with the consequences of the sovereignty debt default it declared in 2001. Dollar-thirsty hedge funds are looking to collect on those junk default bonds that they still own.
That explains the detention of the Argentine training vessel Li-bertad by authorities in Ghana, acting on a lawsuit filed by a hedge fund. A court in Ghana ruled on Thursday not to release the vessel and Argentina has dispatched its deputy economy and foreign ministers to the African country in a bid to solve the situation. The default has come back to haunt Argentina in the shape of a vintage frigate now moored in Ghana until a legal battle is settled.
Yet still in charge is Fernández de Kirchner. A new saucepan-bashing protest has been called for November 8. The President, and the newly-appointed media watchdog Martín Sabbatella, are gearing for a legal showdown with Grupo Clarín on December 7. According to the national government on “D-7” an injunction filed by Grupo Clarín against the Media Law expires. The President has been emboldened by Hugo Chávez’s re-election as the Bolivarian president of Venezuela on Sunday. Pots will be bashed, Border Guards will protest, truck drivers will honk their horns and media groups will file injunctions. But the novelty could be that all those disgruntled people will have to live with Fernández de Kirchner until 2015.