The people versus Cristina in Argentina

This week has to have been a dramatic shock to the government of Cristina Fernandez in Argentina. First, there were fifteen days of strikes against the draconian export tax she has levied on producers of agricultural products and other goods. The draconian new tax would take a bite of up to 45% of the earnings of exporters, who would also still be subject to other local government taxes. The result has been nationwide road blockages of trucks carry goods to market by Argentina’s famous “piqueteros.” This week the result has been goods like meat disappearing from grocery store shelves and pictures of milk being poured by producers down sewers.

On Tuesday, broader public support in solidarity with producers led to demonstrations in the streets of Buenos Aires and other major cities. I was not in Argentina when the economic crisis hit in 2001, but I got a taste of what it must have been like when the pot bangers returned in a resounding protest what they call here a “cacerolazo.” Even people who have otherwise supported the populist leaning polices of the Fernandez government thought this tax  had gone too far and they made their displeasure known. Today headlines show some cracks in the government’s refusal to engage in talks with strikers.

What is happening in Argentina? No one seems to know exactly why the government decided to push this policy at this particular time, except perhaps that it thought it could get away with it. It is not in great need for the fiscal revenues that this tax would produce, though those revenues would go directly into the coffers of the central government without being shared by the provinces as other taxes must. Does this mark a major misjudgement on the part of the government? Clearly so, but it is also true that the Argentine people up until now have put up with government encroachment on their rights and income without complaining too much. That seems to not be true anymore. By all accounts here, these demonstrations have been sudden and spontaneous and the jury is still out on where this will all lead. However, the message has clearly been sent to the Fernandez government that it has gone one step too far.

Published Date: March 31, 2008