Argentina

on the World today

ATLANTIC

October 1956

ARGENTINA’S “provisional” government put down the neo-Peronista uprising in early June in a few hours. However, the subsequent mopping-up — which was carried out with greater vigor than is usual on such Latin-American occasions — revealed a plot whose extension and depth came as something of a shock not only to the government, hitherto complacent in its righteousness as the vehicle of a liberating revolution, but to public opinion in general, which, although indulging in occasional sniping, had taken for granted a general acquiescence in the broad principles under which the government was trying to operate.

It now appears that such complacency was illfounded, and that the Argentine situation is not as stable and comfortable as a surface calm has led us to believe. The malaise is both economic and political — but first of all economic.

It is no exaggeration to say that the country is on the verge of bankruptcy. Argentina must import practically all its fuel, 60 per cent of its oil, all its iron and steel, most of its paper, and all its heavy machinery. It has at present no exportable mineral wealth; its only exports are agrarian — meat, grain, hides, wool, vegetable oils, fruit, for example— which must compete in an already saturated world market. Furthermore, exportable surpluses of these products have steadily diminished over the years.

For this Perón is partly, although not entirely, responsible. For political reasons he consistently discouraged agricultural enterprise in favor of industry: factory workers make better political cohorts than scattered peons on the pampas. The estancieros, too, were his natural enemies. Agricultural production thus dropped constantly — affected also, it must be said, by several years of drought. At the same time internal consumption rose with the rise in population and in the standard of living of the working class: people were paid more and so they ate more.

Perón’s legacy

Meanwhile, the much-touted industrialization of the country proceeded without a coherent plan. Essentials for industry are power and transportation. Argentina at present is woefully short of both.

In the Buenos Aires area, with more than five million inhabitants, the supply of electricity covers only 70 per cent of the demand. Lamps burn dull orange on winter evenings, machinery is continually breaking down because of the low tension, and factories work on restricted schedules.

The railroads, bought back from the British and the French with much fanfare in the early days of Perón’s regime, are among the most decrepit in the world. The permanent roadbed is in such poor condition that even brand-new trains recently imported proceed at a funereal pace. Perón built no new highways at all; existing ones were rarely repaired. As for motorcars, there are fewer in the country now than in 1929. Of these, 58.5 per cent are more than twenty years old.

Plans, started under Perón, are being completed for the building of a steel mill, with the aid of credit from the Import-Export Bank and from European capital. At present, however, Argentine industry is largely light industry and is dependent on foreign markets not only for raw materials but for many finished parts which go onto the assembly lines. Capital equipment, too, is badly in need of replacement. Much of it was bought haphazardly, depending on where the dictator had friends — and credit — at the moment, so that a single industry may need spare parts from half a dozen different countries.

These uneconomic working conditions explain why, in spite of the devaluation of the peso and generally low wages, Argentina has so far been unable to export its industrial product in any appreciable quantity, even to neighboring countries. Prices are higher than those of the United States and Europe, often for an inferior product. Within the country, of course, customs barriers protect industry from any form of foreign competition whatsoever.

Thus the country’s balance of payments is not only seriously out of kilter, with no immediate hope of improvement; there is also a pressing need for heavy capital investment simply to maintain the economy at the present level.

In dealing with this disastrous legacy from Perón, for which it is in no way responsible, the government is hampered by several factors. First of all, its own nature: it is a revolutionary government; although it came to power in the midst of great popular ferment, it is essentially military both in the source of its authority and in its manner of doing business. The “inner cabinet” which makes all major decisions is composed only of military men: the President, General Pedro Aramburu; the Vice President, Rear Admiral Isaac Rojas; and the ministers of the armed forces.

Yet this is not a military dictatorship of the ordinary Latin-American type. All the men in it profess democratic rather than autocratic convictions; they have set up a consultative assembly of leaders of the traditional political parties; they listen to the advice of all sorts of experts in matters of general policy. Yet these discussions and consultations are generally secret, and little of what transpires seeps out to the general public.

Political vacuum

In their efforts to function “democratically” the leaders of the government are hampered above all by the huge political vacuum in the country.

This is not only caused by the departure of Perón: his creed was vacuous enough to start with. It is twenty-five years since there has been a functioning democracy In Argentina — not since the military coup of 1930 put General José Uriburu in the saddle and instituted the long series of reactionary, autocratic governments whose political ineptitude paved the way for the demagogue, Perón.

The Peronista party has now been dissolved; more important, its sources of wealth have been cut off. There are still, however, the huge sums which Perón and his henchmen sent abroad in their heyday and which are finding their way back to finance underground activities, to print pamphlets, to buy arms — and men. The government has been dismissing civil servants right and left, sometimes for no graver reason than a nominal membership in the Peronista party. There is thus a growing group of malcontents, otherwise unemployed, who are often happy to take up cudgels in the name of justice and the good old days.

The traditional parties, patterned largely on European models, and particularly French ones, have plenty of speech-making, doctrinaire leaders, but few troops. Perón’s political creed, Justicialismo, was overwhelmingly emotional in its appeal; the traditional parties, with their emphasis on doctrine, find few clients among a people unaccustomed to any kind of political thinking. The parties, too, are often divided, particularly the radicals, among whom three splinter groups are at present jockeying for position.

Church and Staid

In the year since the revolution no new parties, no new political figures, have arisen to fill the void. The one issue which appears to arouse widespread popular feeling is the religious one. The government, in deference to Catholic opinion, was obliged in February to suspend the law instituting divorce, and in May, in deference to the liberals, to dismiss its Minister of Education, who was planning to set up a Catholic university to rival the state ones.

The relationship between Church and State, particularly on matters of education, is an explosive subject in many Catholic countries. If it seems a somewhat irrelevant question for Argentines to be buttling so bitterly about while their country’s economic destiny hangs in the balance, it must be remembered that it was Perón’s attack on the Church that created the popular ferment which made the revolution possible.

Perón’s attack was supposed to have been motivated in part at least by his fear that the Church would sponsor a Christian Democratic movement among the working class and woo his troops away from him. His fears appear today to have been unfounded. Several such nominal parties have appeared, but so far none of them have aroused any appreciable interest. The undoubted Catholic fervor of an important sector of the population has not been channeled into any particular political party.

Windfall for farmers

The traditional cleavage of Argentine politics has been industry and commerce versus agriculture, Buenos Aires versus the provinces. On this issue, however, there has been little discussion, the need to stimulate agricultural production in order to have something to export is so pressing. The great beneficiaries of the revolution— and practically the only ones economically — have been the agrarian producers.

Perón set up a state monopoly for the marketing of all Argentina’s exports, which bought from producers at fixed and quite unremunerative prices. Not only is this organization (the IAPI) being dissolved and the farmer allowed to find his own markets at his own price, but the devaluation of the peso and a system of exchange bonuses for agricultural exports have greatly increased the peso return on such exports — as much as 115 per cent in the case of wool.

Commerce and industry have had no such windfalls; in the present state of penury it has not been in the power of the government to grant them. There is, however, no indication of a desire to return to an agrarian economy. The first essential of Argentine industry at present is credit — credit to import raw materials, spare parts, and new equipment. Here the government has adopted a series of measures designed to put Argentina back in the respectable society of nations and thus open up the sources of credit Perón’s lone-wolf attitude closed.

The debt to Western Europe (except Germany) has been funded and a system of multilateral payments instituted which replaces Perón’s bilateral arrangements. Argentina is also in the process of joining the World Bank and the International Monetary Fund, boycotted by Perón as incompatible with his brand-new “national sovereignty.”

However, hopes of heavy private investment have so far been only moderately realized. In the first six months of 1956 new investments totaling approximately $12 million were approved. These were largely in the form of capital equipment for the extension of existing industries, affiliates of American and European companies.

The working class

Unfortunately, the sector of the population which has clearly lost in the change of government is the urban working class. The workers were, of course, Perón’s darlings, although the steady process of inflation had largely nullified their economic gains by the time of his downfall. The process has been greatly accelerated since, and there have been no sugar plums such as Perón, playing Santa Claus, used to distribute to palliate the distress.

In February the government decreed a general rise in wages of 10 per cent. Although no official figures are available — government statistirs are published from six to eight months after the event — no one maintains that this is sufficient to meet the rise in the cost of living.

The labor front, however, has remained remarkably quiet. There are sporadic cases of sabotage, there are slowdown strikes or token strikes, but so far there has not been any attempt at a showdown. This is probably due, in great measure, to the disorganized state of the trade unions. Under Perón they were an integral part of his government and his party. Membership was all but obligatory, and not only were employers responsible for collecting dues: they had to chip in a share of their own.

Membership has now been made voluntary and employers relieved of their dues-collecting duties. Naturally there are fewer members and the union treasuries, once bursting, are practically empty. The Peronista authorities have been deposed, sometimes arrested, and elections called. Even the principle of a single union in each trade has been dropped: plurality is more “democratic.” Thus the working class is at the moment unorganized and leaderless. Muttarings of discontent, although no longer chanted in chorus, can, however, easily be heard.

The government continually declares that it does not wish to be anti-labor, that it does not propose to punish the working class for its gullibility in voting for Perón. Its sincerity need not be doubted, but in the present economic dilemma it seems to have chosen, either by inadvertence or design, to lay the heaviest burden on the sector of the population least able to bear it.

Caretaker government

One should not, however, underestimate the credit the government still enjoys among large groups of people. Some critics claim that straw men of the old oligarchy are slipping into key economic positions out of the limelight, but the general public still believes its “provisional” governors to be honest, dedicated men. The announcement that general elections would be called in late 1957 has dampened any suspicion that the military junta plans to be self-perpetuating.

The most telling criticism is not of their aims but of their methods. As improvised statesmen the military men have too often wavered, reversed themselves, or come to no decision at all. Economists point out that the lack of a coherent policy is sometimes worse than even a bad one firmly administered. Politicians say that few Argentines have the right to a “holier than thou" attitude toward Peronistas, and that it is time to bury the past and effect a national reconciliation, even at the cost of loss of face.

Argentina, then, is at present in an amorphous state. It is as the French say, completely disponible, unattached, undirected, exhausted by ten years’ experience with demagoguery and still too dazed to choose a new course. Which is, of course, why the caretaker “provisional" government, with paternal solicitude, has decided to put off elections until the far end of next year.