Facebook Instagram Twitter YouTube

Argentina: Peso in Free Fall as Thousands Mobilize Against Macri and the IMF

In the past few hours, the Argentine peso has been devalued from 35 pesos to the dollar to 40 pesos to the dollar. What is going on?

Leo Zino

August 30, 2018
Facebook Twitter Share

Massive anti-austerity mobilization in Cordoba, Argentina on August 22.

Early in the morning on Wednesday, August 29th, President Macri gave a one-minute speech to the world markets, announcing a new “deal” with the IMF that would “ensure” Argentina’s financing for 2019. Immediately following this speech, the peso lost 8% of its value in a single day – the biggest drop in recent history. The drop came after the IMF announced that there was no such deal at present and that any agreement, if it could be reached at all, was still in negotiation. Macri’s strategy of telling the markets what he thinks they want to hear, regardless of factual evidence, created a sense of utter distrust in the Argentine government.

With the peso in a free fall, the main labor unions, CGT and CTA, both called for general strikes, but not until the end of September, which seems like years from now, amidst a crisis that is turning every minute turn into hours, hours turn into days, and days into weeks.

The latest economic crisis quickly developed into a political crisis. It is creating what some analysts are calling a “vicious cycle” wherein the political instability and uncertainty feed the economic crisis, which in turn feeds the political crisis with no end in sight.

This is at a time when the judicial system is leading a political prosecution campaign against the former Pink Tide government led by Cristina Kirchner on grounds of its many corruption scandals. Similar to the Italian Mani pulite or the more recent Brazilian Lava Jato, a wave of politicians and business people have declared themselves guilty of giving or receiving bribes in exchange for political favors or government contracts. One scandal is known as the #CuadernoGate or #NotebookGate because the case began with the discovery of a set of notebooks. These notebooks, or rather photocopies of the notebooks (the originals were never found), included information about the amounts of the bribes that were handed out, as well that the specific times when and places where this took place.

The effect that the scandal had on the economy was similar to what happened in Brazil. The businesses involved in corruption scandals are losing contracts, their stocks are falling, and a new wave of layoffs has begun. The latest government statistics show that the Argentine economy is now in a recession. The previous measures of Macri’s government to dollarize key sectors of the economy, such as the utility bills and fuel prices, make every dollar increase add to the inflation rate, which is now the second highest in the world, after Venezuela. The government’s plan to overcome the crisis is to impose even more austerity measures. In return for these austerity measures, the IMF will provide a “rescue package” that would allow the Argentine government to repay its debt to the same IMF and avoid going into default.

Education and health are the primary targets of the austerity measures. Argentina has not only a free and public national healthcare system but also a free and public education system. The IMF is eager to liquidate both.

However, students, teachers, and the population are not ready to give away their historic achievements. The current protests are coming on the heels of the historic abortion rights mobilizations recently, when hundreds of thousands of people took to the streets for the right to an abortion, only to be thwarted by a few dozen members of the Senate. The momentum from these mobilizations has fed directly into the student movement for public education.


Over 1,000 students in an assembly in Jujuy, Argentina.

There have been student assemblies around the country with over a thousand students discussing the economic crisis, the crisis of the universities, as well as the demand for the separation of church and state, a demand made by the abortion rights movement. Universities around the country have been occupied by students and teachers, who are protesting against the lack of government funding. Across the nation, university professors and staff have been on strike for over 50 days. Education workers are still fighting for salary increases that should have been resolved at the beginning of the year. The government continues to insist on a 15% salary increase when the inflation rate tops 20% and is expected to be no less than 35% by the end of the year.

Later today, there is a march in defense of public education that will include bring out students and teachers to protest Macri’s government and the IMF. Workers in the shipyards, hospitals, and other affected sectors are also fighting for their jobs with the support of their communities. The connections between these struggles creates a politicized and volatile atmosphere. The struggles are widespread and likely to intensify.

students-2.jpg

At the time of publication, the markets in Argentina have reopened. The moment the markets opened, the dollar jumped 50 cents to 35 pesos. An hour later, the peso was at 40 pesos. The crisis is unfolding at a speed that no one, not even the worst critics, could have imagined.

The similarities with the 2001 crisis that resulted in President De la Rua escaping from the government palace in a helicopter is haunts President Macri. The similarities do not escape the millions of people who know the IMF’s plan is to make workers, students, and the poorest sectors of society pay the cost of the crisis. The outcome is still unclear. The government is in shock, and the crisis is escalating. Only the massive mobilization of the women that took the streets for abortion rights, of the students that are occupying universities and of the thousands of workers fighting against layoffs and austerity measures can put a stop to the government and the IMF.

Facebook Twitter Share

Latin America

Under Xiomara Castro’s Government, the Garífunas in Honduras Still Await Answers in the Struggle for Their Land

The Garífunas in Honduras persist in their struggle for their ancestral lands, while eviction attempts and threats against their leaders continue. Almost 10 months into Xiomara Castro’s administration, her campaign promises to the Garífuna communities remain unfulfilled.

Marisela Trevin

November 19, 2022
Argentina's Party of Socialist Workers (PTS) holds an assembly for workers to discuss working-class solutions to Argentina's crisses.

Thousands of Workers and Young People Participate in Socialist-led Assemblies across Argentina

Last weekend, the Party for Socialist Workers (PTS) in Argentina held over 100 democratic and open assemblies in cities and towns across the country to debate the inflationary crisis, government’s the austerity program, and a working-class solution.

Robert Belano

November 15, 2022
Jair Bolsonaro pictured on election day. Wearing a yellow Brazil shirt and smiling.

Bolsonarism Will Not Be Defeated in Brazil without Organizing Independently of the Lula Government

Lula won by a narrow margin in yesterday’s elections in Brazil, but his government is unwilling to truly challenge the Right’s advance. A Brazilian socialist describes the fight ahead for the country's workers and Left.

André Barbieri

October 31, 2022

Fascism or Bonapartism? Lessons from Trotsky for Understanding Brazil Under Bolsonaro

Is genuine fascism rising in Brazil? How should the working class respond if so? Marxism helps us to characterize the Bolsonaro government and spells out the method for confronting the extreme Right.

André Barbieri

October 29, 2022

MOST RECENT

Twitter’s headquarters in San Francisco. Logo on a grey building.

Workers Built Twitter — They Should Own It, Not Elon Musk

Corporations like Twitter cannot function without the workers who do the daily labor.

Kyle Thibodeau

November 27, 2022

What Will Communism Look Like in New York City?

The new novel Everything for Everyone tells the story of a global insurrection against capitalism starting in 2052. It's not only entertaining — it's a good opportunity to think about revolutionary strategy.

Nathaniel Flakin

November 23, 2022

The Slave Labor World Cup

Qatar’s wealth and power are built on the labor power of migrant construction workers, who toil amid semislave conditions.

Santiago Montag

November 22, 2022
President Biden greets John Fetterman, Pennsylvania’s Democratic nominee for U.S. Senate, after arriving Thursday at Pittsburgh International Airport

Jacobin Is Wrong: The Midterms Were Not a Socialist Wave

The 2022 midterms were not a “red wave” of socialism — we don’t win by shoehorning capitalist politicians into a leftist mold.

Otto Fors

November 20, 2022