Argentine National Strike Called by Unions Over Inflation, Crime

Wednesday, 09 Apr 2014 11:31 PM

 

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Argentina’s biggest trade unions plan to protest rising prices and crime in a nationwide strike today that threatens to disrupt operations at the country’s ports.

The 24-hour strike includes truck, bus and train drivers as well as port workers, waiters and some teachers and affect urban transport, international flights and garbage collection, the General Workers Confederation, or CGT, said in a statement.

President Cristina Fernandez de Kirchner is facing rising social discontent after devaluing the peso 19 percent in January to encourage exports and cutting government subsidies as she attempts to shore up international reserves that have fallen near a seven-year low.

“We’re convinced that tomorrow will be a demonstration -- that we have interpreted the people’s will -- because the strike is going to be massive,” Hugo Moyano, Secretary General of the CGT, said in a news conference yesterday.

Consumer prices rose 7.1 percent in the first two months of the year, according to the government’s national index introduced this year. Inflation accelerated to 34.9 percent in February from a year earlier, according to estimates by private economists distributed by opposition lawmakers.

Rising prices triggered looting incidents in several cities in December in which at least eight people died. The looters took advantage of strikes by police who were demanding salary increases to meet rising living costs.

“Prices are going up by the elevator and salaries by the stairs, that’s the real disadvantage we have today with inflation,” said union leader Luis Barrionuevo.

Shipments of dry bulk, gas and oil products may face severe disruptions as a result of the strike, Lloyd’s List Intelligence said in a report yesterday.

Picketing, roadblocks and strikes by several unions will affect activity at the port of Rosario, Argentina’s largest grain export hub, said Guillermo Wade, an official at the Chamber of Port Activities, in a telephone interview from Rosario. Shipment loading shouldn’t be affected, Wade said.

A strike in November 2012, the first since Fernandez, 61, took power in 2007, to demand tax cuts and pay increases left garbage piled up on sidewalks and disrupted flights and bank operations.

“Everyone has a right to strike and that’s fine so, please, don’t let anyone feel targeted,” Fernandez said April 8 during a nationwide broadcast.

Since replacing key members of her economic team following congressional elections in which her ruling coalition failed to win key constituencies such as Buenos Aires province, Fernandez has implemented policies that seek to regain access to the international bond market.

She has settled arbitration disputes at the World Bank, revamped the country’s economic data at the request of the International Monetary Fund, begun negotiations with the Paris Club of creditors and agreed to compensate Repsol SA for the expropriation of its stake in YPF SA.

Fernandez, who along with her husband and predecessor, Nestor Kirchner, oversaw average annual growth of 7 percent a year in the past decade by boosting spending, is now rolling back some of those policies.

Recent steps include easing currency controls and reducing subsidies for gas and water by an average of 20 percent in a bid to save as much as $1.6 billion and narrow the largest fiscal deficit in more than a decade.

The measures will come at the expense of economic growth. Gross domestic product will expand 0.5 percent this year compared to an average of 2.3 percent for South America, according to IMF projections.

South America’s second-largest economy after Brazil posted its biggest primary budget deficit in 21 years last year and the widest current account deficit since 2000 as debt payments and energy imports drained reserves by about $12 billion.

© Copyright 2014 Bloomberg News. All rights reserved.

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