Argentina's Fernandez faces her first general strike

Reuters News

11/20/2012 10:07:47 AM - Reuters News

By Alejandro Lifschitz and Nicolás Misculin

BUENOS AIRES (Reuters) - Opposition trade unions protesting Argentina's economic policies brought public transportation and grains exports to a halt on Tuesday in the first general strike since President Cristina Fernandez took office five years ago.

The 24-hour work stoppage by bus drivers, train conductors and port, airline and bank workers follows wide protests held on November 8 over high crime, soaring inflation and the government's policy response.

Fernandez's popularity has tumbled since she easily won re-election last year.

Inflation is running at about 25 percent despite a sputtering economy, according to private economists. The government publishes much lower inflation data long dismissed by the markets as inaccurate.

"The strike is a consequence of slow economic growth and high inflation, which the government does not recognize and therefore does not reflect through adjustments in the sliding income tax scale," said Ignacio Labaqui, who analyzes Argentina for emerging markets consultancy Medley Global Advisors.

The International Monetary Fund has given Argentina roughly until the end of the year to improve its murky inflation reporting or risk sanctions.

Farmers also joined the protest led by Hugo Moyano, a gruff former truck driver once closely linked to Fernandez but now a leading opposition figure. He wants lower taxes for workers whose purchasing power has been drained by galloping inflation.

"The complaints are justified," Martha Valazza, a 72-year-old retiree, said in the all-but-abandoned Retiro train station in Buenos Aires. "The worker must act to improve his own situation."

The first general strike to hit Argentina in a decade increases the stakes in the political battle between the president and Moyano. Ties between the two soured after the death of Fernandez's husband and predecessor as president, Nestor Kirchner, in late 2010.

Moyano's CGT labor federation split earlier this year, with his allies re-electing him as leader in a vote rejected by rival union bosses aligned with Fernandez. The fracture in the umbrella group risks deepening labor unrest as double-digit inflation stokes wage demands.

'LOSING CONTROL'

"This general strike raises the possibility that she is losing control of the street and it puts the unions that are allied with her in an uncomfortable position," Labaqui said.

Fernandez, meanwhile, is moving to shore up her base. Her allies in Congress last month lowered Argentina's voting age to 16 from 18, a change that could help the politically ailing president court the youth vote ahead of 2013 mid-term elections.

Argentina is the world's top exporter of soy oil, needed to make biofuels, and soymeal used to feed cattle as far away as China, where the emerging middle class is clamoring for beef steak. The South American country is also the second-biggest corn exporter after the United States.

"This (strike) was necessary, unfortunately," said Eduardo Buzzi, who heads the Argentine Agrarian Federation, which represents small-scale farms. "There is no way to dialogue. ... This is the most anti-farm government Argentina has ever had."

The agricultural sector has long quarreled with Fernandez over the 35 percent export tax her government puts on soybean exports and curbs it places on corn and wheat shipments.

Calls went unanswered at the main grains port of Rosario and the usually noisy, truck-jammed entrance to the port of Buenos Aires was still, with activity expected to resume on Wednesday. The local stock and bonds market was also unusually quiet.

Picketers demonstrated in public squares such as Plaza de Mayo in front of the presidential palace in Buenos Aires. Just up the street, tourist attraction Cafe Tortoni was closed after its employees failed to get to work due to lack of bus service.

(Additional reporting by Guido Nejamkis, Writing and additional reporting by Hugh Bronstein; Editing by Bill Trott and Will Dunham)