L-I: RV: [stop-imf] ARGENTINA: Gov't Cuts Wages to Meet IMF Commitments (fwd)
Julio Fernández Baraibar
julfb at SPAMsinectis.com.ar
Tue May 30 14:18:04 MDT 2000
This is a continuation of the other very important messages from Stop IMF.
The country waked today in a depressing mood.
Besides this meassures the government, following a claim of IMF and
financial capital, decided to dismount the health system based in the trade
unions organizations (the name in spanish is Obras Sociales) favoring the
private health enterprises. The last sign of a solidary worker health
mechanism is over.
Because the march of tomorrow are going to be a success. Thousand and
thousand of workers and employees will occupy the streets of Buenos Aires.
The article does not mention the CGT of Hugo Moyano, that called for the
march against IMF, and names instead the "progresist" Victor De Gennaro, a
leader that has divided the trade unions unity with his CTA. Nestor, as
public employee, has explained very well in other messages the nature of the
De Gennaro's secession.
Tomorrow at night you will have information about this event.
> Title: ECONOMY-ARGENTINA: Gov't Cuts Wages to Meet IMF Commitments
> By Marcela Valente
> BUENOS AIRES, May 29 (IPS) - Argentina's government announced cuts
> Monday in public sector salaries and pensions and the shutdown of
> some government offices in order to bring the budget deficit down
> to 4.5 billion dollars and keep its promises to the International
> Monetary Fund (IMF).
> Economy minister Jose Luis Machinea reported that the spending
> cuts amount to 938 million dollars, and flatly rejected the
> possibility of a devaluation of the Argentine peso or a
> ''dollarisation'' of the economy in an attempt to boost the
> nation's competitive strength on international markets.
> Machinea called the announced measures a ''reassignment'' of
> resources because a portion of the savings is to be earmarked for
> social, health and education programmes.
> Labour unions particularly criticised the cuts in salaries for
> national public administration employees, and announced that they
> would hold a march Wednesday to protest the IMF requirements.
> V¡ctor de Genaro, leader of a government workers union, pointed
> out that the announced adjustment is not impartial, but seeks to
> ensure the transfer of resources from the public sector to a group
> of powerful private enterprises that enjoy fiscal and financial
> With the salary reductions, the government expects to reduce the
> fiscal deficit from 10 billion to 4.5 billion dollars by the end
> of the year. This goal is the deficit level Argentina committed to
> before the IMF, which this Tuesday will send a delegation to
> Buenos Aires to monitor the performance of the economic programme.
> Less than six months into his term, president Fernando de la Rua
> has launched two budget adjustment packages. The first consisted
> of tax increases, which was made into law in March, but the
> results have been a disappointingly meagre increase in money for
> the government coffers.
> Accompanied by all his ministers, De la Rua emphasised the
> magnitude of the fiscal deficit inherited from his predecessor,
> Carlos Menem (1989-1999) and affirmed that the measures announced
> Monday to ''restructure the State'' uphold his goals for
> ''equitable growth.''
> The president justified the new adjustments, implemented after a
> series of delays, pointing to the adverse international
> circumstances, such as the interest rate hike in the United
> States, the devaluation of the Euro with respect to the dollar and
> the instability of the world financial markets.
> This scenario - on top of the tax collections that increased
> barely two percent in March and April, and then fell in May -
> prompted independent economists to calculate that the Argentine
> economy would grow just two percent, instead of the projected 3.5
> percent, and that unemployment would remain at a high 14 percent.
> In simple terms, the new measures mean that public employees who
> earn between 1,000 and 6,500 dollars per month will see a 12
> percent reduction, and those with higher salaries will take a 15
> percent cut.
> The wage cuts will also affect the Legislative and Judicial
> branches, though judges' paychecks will be spared the axe.
> As far as government incomes at the provincial level, the De la
> Rua administration called for ''urgent repairs'' of the situation
> in which certain legislators and city councillors earn incomes are
> several times greater than that of the president, which is 4,800
> dollars per month.
> ''The greatest part of the effort must be made by political
> leaders, who are asked to make personal sacrifices,'' De la Rua
> said. Economy minister Machinea, meanwhile, pointed to the
> ''intolerable'' salary disparities existing in the public sector.
> The paychecks of government ministers are twice that of the
> president, and lawmakers see incomes of between 5,000 and 27,000
> dollars each month, depending on whether they serve in the
> national or provincial legislature. Some city councillors earn the
> more than a national lawmaker.
> The federal government's adjustment measures also call for the
> closing or merging of public offices, including the areas of
> sanitation control, economic research, the congressional printers
> and the official news agency, Telam, which will no longer produce
> government publicity and will go through full restructuring.
> Machinea emphasised that public employees will not be eligible to
> collect pensions from other jobs and the especially large pensions
> of the standout government posts will be reduced by 33 to 50
> De la Rua and Machinea stressed that social spending will not be
> reduced. On the contrary, they announced the creation of a Social
> Solidarity Fund for emergencies in the country's interior, and
> that government expenditures for workers' health services will be
> In the area of government investment, De la Rua's announcements
> were less spectacular. The government had to back off from an
> ambitious infrastructure programme, though it expects some 10
> billion dollars in private investment over the next three years.
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