[stop-imf] IMF demands Argentina cut jobs

[Robert Weissman]

Argentine Protests Spread Over IMF Budget Demands 
Wed Apr 17, 5:32 PM ET 
By Alistair Scrutton 

BUENOS AIRES, Argentina (Reuters) - Provincial state
workers protested across Argentina on Wednesday
against budget cuts sought by the IMF (news - web
sites), occupying a legislature and battling police in
the latest challenge to what is seen as President
Eduardo Duhalde's increasingly floundering rule. 

In La Plata, capital of Buenos Aires province, police
fired rubber bullets to disperse 400 state workers
protesting unpaid salaries, a sharp reminder of the
social unrest that overthrew Duhalde's two
predecessors in quick succession in December. 

Hundreds of public employees also demanding three
months of back pay and waving banners calling the
leader of Latin America's No.3 economy, a "thief,"
broke windows and occupied the legislature of San
Juan, a small and bankrupt province at the foot of
Argentina's Andes. 

The protests, in which at least one demonstrator and
two police were injured, coincided with the scheduled
departure of IMF mission head Anoop Singh for
Washington after two weeks of talks trying to make the
government swallow huge spending cuts in the provinces
as a key condition for vital financial aid. 

Four years of recession, compounded this year by debt
default and devaluation, have isolated Argentina from
world markets and pushed this country of 36 million
people to the brink of civil unrest and financial
meltdown. 

Argentina's provinces, where the vast majority of the
population lives, have become an investor's bete
noire, accused of being run by unaccountable local
strongmen freely spending federal tax transfers and
giving out jobs to win friends. 

NO. 2 CITY HIT BY CIVIL SERVANT STRIKE 

State services were nearly paralyzed in Cordoba, the
country's second biggest city and an industrial hub,
amid a strike by public employees such as hospital
workers and teachers. Like nearly all provincial
workers, they are dependent on federal funds for their
wages. 

IMF head Horst Koehler -- heralding a new get-tough
attitude with Argentina after years of overspending --
said "the IMF is not asking for the impossible" and
bluntly told the provinces and government to "face
reality" and cut jobs. 

If an accord was made with provinces -- criticized for
printing over a dozen currencies to ease their cash
crunch -- Koehler said he was optimistic the IMF could
back Argentina. 

The hotel where Singh was staying was ringed with riot
police and metal barriers were erected overnight as
several hundred leftist and unemployed militants
gathered to protest the lending agency's policies. 

Planned strikes this week -- including drivers of the
armored vans that provide banks with cash -- show how
difficult it will be for Duhalde to make Argentines
accept more austerity after a long recession that has
helped make one in two Argentines live in poverty on a
few dollars a day. 

Duhalde, in power for just over three months but
already in the low double digits in approval ratings,
himself was in no doubt of the costs involved. 

"There will be social upheaval, of course there will
be," Duhalde, who has been accused of using fears of
anarchy to keep himself in office, told local radio. 

A RUDDERLESS GOVERNMENT? 

Adding to a feeling of indecision at the helm, Duhalde
backtracked on plans to make it more difficult for
Argentines to withdraw savings from shaky banks and
reprimanded his economy minister on the eve of aid
talks with the IMF and the U.S. Treasury. 

Duhalde refused to sign into law an economy ministry
decree aimed at stopping Argentines using court orders
to withdraw deposits frozen in December to stop a bank
run. 

Argentines have taken out some $50 million a day
thanks to courts overturning the government freeze.
With deposits down 20 percent last year, Economy
Minister Jorge Remes Lenicov wanted to allow banks to
make legal appeals but Duhalde feared the move would
be illegal and spark a popular backlash. 

Remes Lenicov delayed by a day a scheduled Wednesday
trip to Washington to meet U.S. Treasury Secretary
Paul O'Neill and top IMF officials. 

All these problems have made life increasingly
difficult for Remes Lenicov, respected as an honest
broker but also criticized for trying to soften the
impact of devaluation with measures that cost banks
and businesses billions of dollars. 

"If you ask me, the economy minister, the economic
team, moved too fast (with the decree to halt
court-allowed bank withdrawals)," Duhalde, a former
provincial governor with strong links to trade unions
as a member of the Peronist Party, told local radio. 

If unpaid wages were not enough, the government bent
under pressure from utility companies to allow gas and
electricity price rises ahead of the winter. With
winter clothes reportedly doubling in price, consumer
anger is bound to rise. 

Prices are already up nearly 10 percent in three
months, after years of no inflation. Economists fear
inflation could spiral out of control, spawning fears
of the multi-thousand annual inflation rate of the
late 1980s. 

Supermarkets are crammed with long lines of customers,
berating helpless cashiers for rises in the prices of
basic goods such as eggs and cooking oil. 

(With additional reporting by Mario Naranjo, Karina
Grazina and Cesar Iliano)