Argentina Workers Demand Back Pay

  The Washington Post, April 19, 2002



Buenos Aires, Argentina Police fired rubber bullets and tear gas to quell protests in several Argentine provinces Thursday as thousands of angry state workers took to the streets demanding months of back pay.

Violent clashes took place in the northern city of Jujuy, about 850 miles northwest of Buenos Aires, and the southwestern city of Rawson. Protests also occurred in the provinces of Chaco and Buenos Aires.

In the central province of San Juan, state workers set fire to the door of the local legislature and occupied several government buildings, vowing to keep up protests until they received their December and January salaries.

The demonstrations came as cash-strapped provinces and the national government struggled to meet payrolls amid Argentina's worst economic crisis in history.

Four years of recession, a punishing devaluation of the peso and a default on the country's $141 billion debt have left Argentina's economy in a free fall. Shut off from international borrowing, the government is struggling with a cash crunch brought on by falling tax revenue.

As riot police battled protesters, President Eduardo Duhalde worked to find ways to repay thousands of Argentines whose hard-earned savings have been locked up in a four-month-old banking freeze.

The partial freeze limiting cash withdrawals for Argentines and businesses was imposed Dec. 1 to halt a run on the nation's banks, enraging Argentines who have staged protests for months outside of banks in Buenos Aires.

Thousands of people, however, have won access to their savings through court orders overturning the freeze, and the government says the hefty withdrawals have left the banking system starved for liquidity.

Economy Ministry officials said Duhalde and his economic planners were analyzing the possibility of repaying Argentine savers with bonds, mimicking a strategy used in 1989, when economic turmoil also engulfed this South American country.

Some Argentines, however, worried a plan to convert bank accounts into bonds would mean some would never see their savings again.

"Argentina can barely pay any of its bills today, how can they repay these bonds?" asked Carolina Viola, a 37-year-old advertising executive.

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