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Argentine Protesters Bang Pots to Protest Fernandez Failures

Thousands of Argentines took to the country’s streets last night in the biggest protests since 2008 against President Cristina Fernandez de Kirchner’s ban on buying dollars and her failure to combat crime and inflation.

Protesters banged pots and chanted anti-government slogans in Buenos Aires and cities nationwide, holding Argentine flags and banners that read “No to changes in the national constitution” and “No more crime.” Demonstrators also gathered in the city’s neighborhoods, outside Fernandez’s official residence in the suburbs. Main avenues in the capital were closed to transit due to the protests.

“People are fed up with the government’s aggressive policies, the authoritarianism and the fact that it’s ignoring people’s problems, such as inflation,” opposition lawmaker Eduardo Amadeo, who invited people to join the demonstration on his twitter, said in a Sept. 12 telephone interview.

Fernandez’s approval rating has plummeted since her re- election last year as she tightened foreign exchange restrictions and broadened federal tax agency powers to investigate how people obtain and spend their money, according to Buenos Aires-based polling company Management & Fit. At the same time, citizens are angered by price rises that are among the fastest in the world and crime that continues unabated.

Government Concerns

“People are in an extremely bad mood,” said the pollster’s manager, Mariel Fornoni in a telephone interview from Buenos Aires. “Inflation, unemployment, foreign exchange restrictions are all fueling pessimism.”

Cabinet Chief Juan Manuel Abal Medina told C5N television today that the protests “weren’t significant” and that the government seeks to foster economic growth and employment.

“I don’t think it was a significant rally, I couldn’t really understand what they were asking,” Abal Medina said. “It’s not something that the government is worried about.”

Fernandez’s popularity fell to 30 percent in August from 64 percent in September 2011, the month before she was re-elected to a second term, according to a Aug. 11-21 Management & Fit survey.

Fernando Yarade, a lawmaker from Fernandez’s Victory Front coalition, said that those who are unhappy with the government are a minority who oppose policies to improve the distribution of wealth. Restrictions on dollar purchases affect 2.5 percent of the population, Yarade said in a telephone interview.

‘Enough’

“We are generating policies that ensure growth for the benefit of the poor,” Yarade said. “Some sectors, which are a minority, may not be happy with those policies, but we try to govern for the majority.”

South America’s second-largest economy will expand 2.2 percent this year, according to the World Bank, down from 8.9 percent in 2011.

“This is the people saying ‘enough,’” said 37-year-old lawyer Pablo Gianzone, who joined in the protests in the Plaza de Mayo where the crowd chanted ‘liar, liar” and sang the national anthem. “The president has lost her connection with reality -- she lives in a parallel world.”

Gianzone said the main problems facing Argentina are crime, corruption and the high inflation that generates poverty.

On Sept. 10, opposition lawmakers released a report prepared by independent economists who calculated prices rose 24 percent in August from a year earlier. Two days later, the national statistics agency, whose data is questioned by the International Monetary Fund, said annual inflation was 10 percent last month.

Credibility, Currency

Congressmen began to release economists’ estimates for inflation last year, after the government fined researchers who published consumer price information that conflicted with official statistics.

Since her re-election, Fernandez has banned most purchases of foreign currency. The tax agency, known as AFIP, which she placed in charge of authorizing all acquisitions, allows some dollar purchases for foreign travel but doesn’t permit them for savings or property purchases, which are traditionally made in the U.S. currency.

Credit card companies must now add a 15 percent tax to all purchases made abroad and report such purchases to the authorities to check against cardholders’ annual income and personal wealth statements.

“AFIP wants to ensure that those who have the highest purchasing power pay their taxes,” the agency’s head, Ricardo Echegaray, said Aug. 30. The government also wants to encourage Argentines to spend in their own country instead of abroad, he said.

Capital Outflows

Fernandez’s measures are aimed at stemming capital outflows that almost doubled last year to $21.5 billion and shoring up central bank reserves that she uses to pay debt. Argentina has been locked out of global credit markets since defaulting on a record $95 billion in debt in late 2001.

She further extended her control of the economy on April 16, when she expropriated control of YPF SA (YPFD), the country’s biggest oil producer, from Spain’s Repsol SA. During her first term, she seized about $24 billion in private pension funds.

Fernandez stirred fresh criticism in a Sept. 6 speech in which she said that people should “be scared of God, and of me a little bit.”

“It’s unacceptable that in a democracy, a president calls people to be scared of her,” Amadeo said.

While crime and inflation are the main concerns in Argentina, voters are also concerned that Fernandez’s supporters in Congress will change the Constitution to allow her to run for a third term in 2015, Fornoni said.

“The politicians agenda is moving in a totally different direction from the people’s agenda,” Fornoni said. “That generates frustration.”

Last night’s protest was the biggest since 2008, when people went to the streets during four months to protest Fernandez’s plan to raise agriculture export taxes. Her proposal was defeated in Congress, when then Vice President Julio Cobos as head of the Senate, voted against it.

To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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