Pots and pans coup

Argentina's government has fallen because of overwhelming public wrath, writes Hisham El-Naggar from Buenos Aires
By dusk on 18 December, an eerie calm had descended over Buenos Aires. In a city with usual noise levels reminiscent of Cairo's Tahrir Square, the silence was startling. But it was not to last.
Since the morning, rumours had been spreading about angry mobs attacking supermarkets in the city's suburbs. Protests and riots finally spread to the central area and across several other Argentinean cities after dark, and continued through the next two days, 19 and 20 December. At the end of it all, 27 had been killed.
Violence did not grip downtown at first because the first noises of protest came from the poor. Buenos Aires has followed Paris' example rather than that of most American cities and its poverty lurks at some distance from the centre. Many downtown neighbourhoods retain their glittery veneer, but head out of the city and you will run into a disheartening concentration of poverty.
For many, the trouble was the expression of years of frustration. In the 1990s, Argentina underwent a transformation which won it praise in Washington -- in the corridors of the International Monetary Fund (IMF) as well as those of the White House. For a time, free-market economists and billionaire businessmen would fly into Buenos Aires for 48 hours and sing the praises of the reforms implemented by Economics Minister Domingo Cavallo, under the wing of Peronist President Carlos Saul Menem.
The reforms amounted to a fixed exchange rate for the peso -- which in the end left the currency so overvalued that foreign goods could be sold to Argentines for much more than they were worth -- and a progressive dismantling of the State. This, combined with large-scale privatisation, sent unemployment soaring.
Foreign investment resulted in respectable growth rates, but most of it was poured into public service monopolies which grew fat by hiking prices. The result was that there were two Argentinas: one which grew relatively prosperous, mostly on credit, and another which wallowed in the misery implied by the country's double-digit unemployment rate.
The new decade brought a new president, Fernando de la Rua of the Radical Party, who soon showed what he was made of. His policy seemed to consist of upholding his predecessor's ideas but with a lack of decisiveness which alarmed his conservative mentors. Successive economic crises in other parts of the world made the overvalued peso a big liability. Unemployment, meanwhile, continued to soar and started to affect the middle class. At the same time, deep recession meant plummeting revenues for a government that faced increasing difficulty in servicing its ballooning foreign debt.
In April of this year, Cavallo was called back in to save the model he had fashioned. He proceeded to do this by shoving the IMF's medicine -- cutting the government budget and raising taxes -- down a reluctant nation's throat. The result was an even deeper recession and a further collapse in government revenue.
Argentina kept devouring one IMF rescue package after another with nothing to show for it. Finally, the IMF became aware that half of the Central Bank's reserves had been sacrificed to finance capital flight to the tune of $15 billion in the eight months in which Cavallo had been back at the helm. It was then that the IMF pulled the plug and told Cavallo to cut his budget, or else.
Argentines, caught up in deep economic depression, were staunchly opposed to excessive cuts in an already meagre budget. In a desperate attempt to avoid losing what remained of the Central Bank's reserves without devaluing, Cavallo virtually froze all bank accounts in the country.
For Cavallo, the result was disastrous. The new policy alienated the middle classes, who had been the mainstay of President de la Rua's support. Furthermore, the freeze resulted in a severe shortage of cash, which placed a great strain on Argentina's large informal market. For many, this was an eloquent testimony to the contempt Cavallo has displayed for the millions of poor Argentines employed by the informal market.
The move was the proverbial straw that broke the camel's back. Increasingly violent food riots flared up in Buenos Aires suburbs. Panicked shopkeepers closed their establishments and the city's inhabitants -- this correspondent included -- huddled at home to await word from the increasingly wobbly administration. Finally, President de la Rua made up his mind. At 10:30 pm on 19 December he spoke on television to inform the nation that he had decided to declare a state of siege, something he had explicitly ruled out a few hours earlier.
Argentines looked at one another in disbelief. It seemed to most that their government harboured no intention of departing one iota from the IMF-imposed script, which calls for sacrificing the economy in order to keep up payments on the foreign debt.
It was then that a loud metallic sound began to assert itself. People all over the city were banging pots and pans. Before long, the clatter could be heard from most balconies in the city. Then people took to the streets, pots and pans in hand, in spite of the state of siege.
Teenagers and ageing pensioners, engineers and delivery boys took over the pavements and the roads. Car and taxi drivers joined them, blowing their horns in an exhilarating cacophony. This was no class war. The middle classes were protesting with the same intensity as the desperate poor ransacking supermarkets. The cry of "enough!" rang out across the entire country.
It was not the only cry to be heard. Some protesters walked over to Cavallo's house, located -- as one might imagine -- in the city's ritziest neighbourhood. Once there, they gave the minister's family a piece of their mind. Tens of thousands of others walked over to the central Plaza de Mayo. Without mincing words, they insisted that Cavallo be sacked.
This time it took President de la Rua two hours to respond. Cavallo was asked to present his resignation, a decision which was communicated to the jubilant multitude at 1 am. By then it was already December 20, the last day of the Southern Hemisphere's spring. The longest day but one.
It was certainly to be a long day. Shortly after the announcement came another decision, this time a preface to disaster. The police began to hurl tear gas at the crowd of peaceful protesters. The crowd was duly dispersed. Early the following morning, however, a fresh crowd had formed in the Plaza de Mayo. This time there was no mistaking what they wanted: President de la Rua had to go.
In the end, he went, but not before allowing the police to fire rubber bullets into the crowd. It is hard to imagine de la Rua actually taking the initiative himself on this order. The crowd itself had been largely peaceful. There were opportunists who took advantage of an explosive situation to break into shops in the downtown area, but they were insulted by other demonstrators who insisted on the peaceful nature of their protest. The victims, however -- who included six dead in the neighbourhood of the Plaza de Mayo -- were not rioters running off with TV sets or Adidas tennis shoes. They were simply protesters.
The tension dissipated almost instantaneously as news spread that de la Rua had quit. The streets soon emptied as a tearful nation learned with horror that 27 people had died in the city and its suburbs.
The task of choosing a new president fell to the opposition Peronists, who have a majority in Congress and the Senate. On 23 December, two days before Christmas, Argentines learnt that they have a new interim president until March at which point elections will be held. The new incumbent's name is Adolfo Rodriguez Saa. So far he has refrained from promising major changes and, given his two- month tenure, he is not likely to take substantial risks. One thing was inevitable, however -- Argentina has decided to default on its foreign debt.
The IMF is unlikely to be happy with the default, but Argentines agree unanimously that 27 fatalities are enough and that beyond the 27, the grinding poverty that was once rare in this country has claimed countless more victims.
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