Out of the ordinary
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In late 2001, the people of Argentina took to the streets, driven to despair by the economic chaos into which their leaders had dragged them. Among them was Gustavo Benedetto, a 23-year-old killed on his first ever protest. Naomi Klein reports on the events that triggered a momentous new kind of politics, born of years of military dictatorship and corrupt rule.
Saturday January 25, 2003
The Guardian
How do you celebrate the anniversary of something that is impossible to define? That was the question faced by tens of thousands of Argentinians on December 20 2002 as they marched from all corners of Buenos Aires to the historic Plaza de Mayo. It was a year to the day since the first "Argentinazo", a word that is completely untranslatable into English or, for that matter, Spanish. The Argentinazo was not a riot exactly, although it sure looked like one on the television, with looters ransacking supermarkets and mounted police charging into crowds; 33 people were killed across the country. It wasn't an ordinary revolution, either, although it sort of looked like one on the face of it, with angry crowds storming the seat of government and forcing the president to resign in disgrace.
But, unlike a classic revolution, the Argentinazo was not organised by an alternate political force that wanted to take power for itself. And, unlike a riot, it pulsed with a unified and unequivocal demand: the immediate removal of all the corrupt politicians who had grown rich while Argentina, once the envy of the developing world, spiralled into poverty.
In reality, the Argentinazo was just what the word itself sounds like: a chaotic explosion of Argentinian-ness, during which hundreds of thousands of people suddenly and spontaneously left their homes, poured on to the streets of the capital, banged pots and pans, yelled at banks, fought police, revved motorcycles, sang football anthems and managed to send the president fleeing his palace in a helicopter. Over the following 12 days, the country would go through five presidents and would default on its $95bn debt, the largest default in history. (The fifth, "caretaker" president Eduardo Duhalde, is still hanging on to power, and elections are planned for April.)
Now, one year on, as enormous crowds fill the Plaza de Mayo once again, it is clear that this is a significant day - but what, exactly, is it marking? Is it a celebration of a national revolt against corporate globali-sation, a mood that seems to be spreading across Latin America, with the Workers' Party taking power in Brazil, and privatisation programmes stopped in their tracks from Mexico to Peru? Is it the beginning of Argentinazo: The Sequel, a forward-looking movement that will replace the failed recipes of the International Monetary Fund (IMF) with something better?
In the end, December 20 2002 is not a day of jubilant celebration or of particularly convincing fist-waving. The mood, instead, is one of mourning, nowhere more so than at the corner of Avenida de Mayo and Chacabuco, in front of the headquarters of HSBC Argentina, a hulking 28 storeys of Darth Vader-tinted glass. It was on this same piece of asphalt that 23-year-old Gustavo Benedetto fell to the ground exactly a year earlier, killed by a bullet that came from inside the bank. The man charged with the murder - who had been in a group of police officers caught on video shooting through the bank's tinted glass - is Lieutenant Jorge Varando, chief of HSBC's building security. He is also a retired elite military officer who was active during the 1970s, when 30,000 Argentines were "disappeared", many of them kidnapped from their homes, brutally tortured and then thrown from planes into the muddy waters of the Rio de la Plata.
From the mid-1950s to the early 1970s, Argentina was a profoundly undemocratic place, ruled by a succession of juntas who, even when they did allow for limited elections, barred the populist Peronist party from putting up candidates. It was in this context that leftwing students and workers first began organising themselves into guerrilla armies. Many of these activists thought that they were starting a socialist revolution, though for Juan Peron, who prodded them on from his exile in Spain, the militias were just a means with which to expedite his glorious return as paternalistic leader. The largest armed faction of this growing opposition was the Montoneros, a youth movement that borrowed its populist politics from Evita and its guerrilla warfare theory from Che Guevara. Though such cells never posed a serious threat to national security, the Argentinian army used a series of guerrilla attacks on military and corporate targets as an excuse to declare an all-out campaign against the left - the generals called the action "a war on terror", but the name that has stuck ever since has been "the Dirty War".
Between 1976 and 1983, Argentina was ruled by a twisted military regime that combined fundamentalist Catholic social control with fundamentalist free-market economics; it banned rock music while it raked in billions of dollars-worth of loans and investment from foreign banks and multinational corporations. The generals saw it as their mission to cleanse Marxist and other "subversive" thought from every school, workplace, church and neighbourhood. At the same time, they also saw it as their right to profit personally from this crusade, not only skimming from public coffers but also stealing private houses, possessions and even children from the people they tortured and killed (the state was eventually forced to pay compensation to many of the victims' families).
To this day, the generals deny almost everything and, thanks to an official state pardon, the killers of that time now walk free - the despised Leopoldo Galtieri, who led Argentina into the disastrous Falklands war and who died earlier this month, took many of his secrets with him to his grave. Since the end of the military dictatorship, however, several exhaustive fact-finding investigations have gathered evidence about abuses during and after the Dirty War. It was by combing through these investigations that Argentinian human rights groups discovered that Varando, the man whom the HSBC had put in charge of its security operations, was one of a group of military personnel accused by relatives of the disappeared of war crimes during an attack on the La Tablada military barracks in 1989. A report by the Organisation of American States' Inter-American Commission on Human Rights, completed in 1997, states that two prisoners at the La Tablada base, Ivan Ruiz and Jose Alejandro Diaz, were "disappeared" under the watch of Major Jorge Varando. Varando says that he transferred Ruiz and Diaz to another officer, and when that officer was later killed in the action, he believed the prisoners had escaped. Because of a subsequent amnesty, however, there was never a full criminal investigation into the events at La Tablada. Today, in connection with a separate incident, Varando is awaiting trial for the murder of Gustavo Benedetto.
At the corner of Avenida de Mayo and Chacabuco, where the HSBC's plateglass facade is now encased in reinforced steel as impenetrable as the mirrored sunglasses on the police officers standing guard outside, Argentina's past and present have come crashing together. Benedetto's alleged killer worked for a foreign bank, one of the very same foreign banks that swallowed the savings of millions of Argentinians when the government declared a freeze on bank withdrawals in early December 2001. While the accounts were locked, the peso was "unpegged" from the US dollar and the currency went into free-fall. When the banking freeze was partially lifted a year later and customers could once again get at their money, their savings had lost two-thirds of their value.
Though banks such as HSBC blame the government for the freeze, the measure was in fact a response to the fact that private banks had helped their wealthiest customers to whisk roughly $20bn out of Argentina over the previous year. At the time, there was no ban on taking capital out of the country. A particularly dramatic moment came last January, when police raided an HSBC branch, as well as several other banks, searching for evidence that hundreds of armoured vehicles had been used to transport billions of undeclared US dollars to the Ezeiza International Airport in cash. The foreign banks claimed that the authorities were looking for scapegoats to blame for the economic crisis, and HSBC Holdings Ltd says that its locally incorporated subsidiary has always acted in accordance with Argentinian laws. It is not aware of any evidence that its subsidiary participated in flight capital.
According to the prosecuting attorney in the capital flight case, the investigation into allegations of "fraud against the state, and illegal association" is ongoing, and so far no charges have been laid.
At the core of the allegations against the foreign banks is the timing: the exodus of cash took place only days before the government froze all withdrawals, leading to a widespread belief that the banks - unlike regular Argentinians who were taken by surprise - had been tipped off that the freeze was imminent. This is an important point, because for many of Argentina's richest families and businesses, the banking fiasco and devaluation has actually made them richer than they were before: they now pay their employees, their expenses and their debts in devalued pesos, but - thanks to the banks - their savings are safely stored outside the country in US dollars. It's a highly profitable arrangement.
After the $20bn in "disappeared" capital was discovered, there was so much public outrage that several foreign bankers faced charges under Argentina's "economic subversion" law, which prohibits acts that sabotage the country's economy. This obstacle was neatly dealt with last May, however, when a coalition of banks, headed by HSBC, successfully lobbied to have the law struck down.
This incident has been linked to yet another controversy, this one involving bribery, legislators and foreign banks. In August, the Financial Times published allegations made by bankers and diplomats that Argentinian legislators had solicited bribes from foreign banks in exchange for offers to vote down several pieces of legislation that would have cost the financial institutions hundreds of millions of dollars a year. The banks reportedly turned down the offers. After the article was published, several banks were again raided by Argentinian police - among them HSBC's headquarters and the private residence of a senior HSBC spokesperson - this time to search for evidence of the reported bribe solicitation and to discover the source of the allegation.
There has been speculation that the raids were politically motivated, to get back at the banks for going public with the bribery allegations. When Mike Smith, president of HSBC Argentina, testified at a legal hearing about the scandal, he said that he had no specific knowledge of the incidents described in the Financial Times and denied HSBC paid any bribes. He also said that soliciting bribes in exchange for favourable laws was common practice in Argentina. This investigation, too, is ongoing.
Benedetto was only one of the 33 people who died violently during the Argentinazo of 2001. But his story, haunted by the ghosts of history, yet so unmistakably modern, has become a symbol for a country now trying to make sense of its unrelenting economic crisis. How can 27 children die of hunger every day in a country that is so naturally abundant that it once fed much of Europe and North America? How can a nation where factory workers used to buy homes and cars on the highest wages in Latin America now have the highest unemployment rate on the continent and an average wage lower than Mexico's? Benedetto thought that his government owed him answers to those questions, which was why he went to the plaza that December day.
"Once upon a time there was a country called Argentina," writes journalist Sergio Ciancaglini, "where many people disappeared and where, years later, the money disappeared, too. One thing is related to the other." Ciancaglini argues that anyone who wishes to understand what happened to Argentina's missing wealth must first journey back into its past, to find out what happened to its missing people. Since the Argentinazo, there has been a grassroots explosion of groups embarking on precisely such a journey, a kind of national forensic detective mission that is linking the economic interests of the generals' dictatorship with the policies that drove the economy into ruin years later. The belief - the hope - is that when these pieces are finally put together, Argentina may finally be able to break the cycle of state terror and corporate plunder that has enslaved this country, like so many others, for far too long.
Benedetto loved reading books about history and economics. According to his older sister, Eliana, "he wanted to understand how such a great country could have ended up in such a mess". Gustavo dreamed of being a professor of history, but that was a goal for a more optimistic time. When his father died in March 2000, Gustavo had to find a job, any job, with which he could support his mother and sister. It was a bad time to be looking for work. In La Tablada, the post-industrial suburb where the Benedettos live, most of the factories were already boarded up. The best job he could find was as a supermarket clerk in a nearby mall.
But at least he had work. Though the world's press discovered Argentina's economic crisis only relatively recently, it had been a fact of life in neighbourhoods such as La Tablada for at least six years. In the mid-1990s, when the IMF was still holding up Argentina as a miracle of economic growth, as a model of the riches that awaited poor nations who fling open their doors to foreign investment, unemployment was already reaching crisis levels. It's a pattern that has been replicated many times across Latin America, in countries who have followed similar free-market reforms; today, only Chile survives as a putative "success story", while more than 50% of Argentina's population has fallen below the official poverty line.
Oddly, when Argentina had less wealth on paper, fewer Argentinians went hungry. Many complex economic factors contributed to this shift, from changes in agricultural export crops to falling wages in the industrial sector. But there were some simple changes that played a part, too, such as the fact that small neighbourhood markets used to sell food on credit during difficult times, a little bit of grace that disappeared when Argentina became a globalisation showcase and those small shops were replaced by foreign-owned hypermarkets the size of Aztec temples, with names such as Carréfour, Wal-Mart, and Dia, the Spanish-owned chain where Gustavo finally managed to get a job.
So it probably wasn't a coincidence that, in the days leading up to the Argentinazo, many of the hypermarkets found themselves under siege, looted by mobs of unemployed men, their faces covered by T-shirts turned into makeshift balaclavas. When Gustavo showed up for work at Dia on December 19, the atmosphere was unbearably tense: no one knew whether this concrete castle was about to be the next stormed by hungry, angry mobs. At noon, the manager decided to end the suspense and close early.
When Gustavo arrived home, he turned on the television. What he saw was a country in open revolt, with protests erupting everywhere. All day and all night, he flicked from one station to the next, but by 10.40pm every station was showing the same image: President Fernando de la Rua, his face clammy with sweat, stiffly reading from a prepared text. Argentina, he said, was under attack from "groups that are enemies of order who are looking to spread discord and violence". He declared a state of siege.
For many Argentinians, the president's declaration sounded like a prelude to a military coup - and that was a fatal mistake for the de la Rua government. Gustavo watched live images of the Plaza de Mayo filling up with people. They were banging pots and pans with spoons and forks, a wordless but roaring rebuke to the president's instructions: Argentinians would not give up basic freedoms in the name of "order", they declared. They had tried that before under the junta, and it had ended badly. And then a single rebellious cry rose up from the crowds of grandmothers and high-school students, motorcycle couriers and unemployed factory workers, their words directed at the politicians, the bankers, the IMF and every other "expert" who claimed to have the perfect recipe for Argentina's prosperity and stability: "Que se vayan todos!" - everyone must go! - they said.
Gustavo slept fitfully that night. When he arrived for work the next morning, the store was completely boarded up, so he went back home and turned on the television again. It was then that he felt an impulse he had never had before - he wanted to join a political demonstration. All of a sudden, Gustavo, an easy-going guy who had not protested against anything in his life, leapt up from the couch, flicked off the TV and told his mother that he was going downtown.
On his way to the bus stop, Gustavo asked several friends from the La Tablada neighbourhood if they wanted to come along with him - to be part of this history they were seeing unfolding on their television screens. But he couldn't find any takers: most people in La Tablada had had enough of history. During the 1970s and 1980s, this working-class neighbourhood was literally caught in the crossfire between the army and the guerrillas: several leftwing cells were active in the area at the time, and it was also home to Infantería Mecanizada No 3 de La Tablada, a large military base that was the site of alleged human rights abuses. In La Tablada, the Dirty War was even filthier than it was elsewhere, with parents bumping into their children's killers at the corner shop. And since any kind of contact with a leftist was enough to get you branded a collaborator, the safest course of action was to retreat into your home: doors were closed on former friends looking for sanctuary, blinds were hastily drawn when there was a commotion outside, the radio was turned up to drown out screams from neighbouring apartments. In La Tablada, as elsewhere in Argentina, residents learned to live faithfully by the philosophy of the terror times: "No se meta" - don't get involved. It's an attitude that has survived to this day. Gustavo, however, had decided to break with that tradition. He had no way of knowing that the tactics of the dictatorship were about to return to the streets of Buenos Aires. During the two hours it took him to get from the suburbs to downtown Buenos Aires, the chief of police had sent down an order to "clear the Plaza de Mayo". At first, the riot squads used rubber bullets and tear gas; then they switched to live ammunition.
The police pushed the crowds on to Avenida de Mayo and the crowds pushed back. At around 4pm, a group of around 20 police officers were looking for a safe place to take refuge and reload their weapons. They chose the lobby of the HSBC, one of the most secure buildings in the city, because it also houses the Israeli embassy. A handful of demonstrators - fewer than five, according to court documents - broke away from the streams of people heading for the Plaza de Mayo and began throwing stones at the bank. One man shattered a pane of glass with a metal bar.
The police and private security guards inside panicked and opened fire. According to evidence heard later in court, in just four seconds a hail of at least 59 bullets was fired on to the packed street outside. Just then, Gustavo Benedetto, walking on his own and having been downtown for less than an hour, happened to turn on to Avenida de Mayo. He was many yards from the bank when a lead bullet, fired from a 9mm weapon, caught him in the back of the head. He fell to the ground; in an instant, he was dead.
The HSBC may have been a good place for the police officers to find sanctuary during the chaos of the Argentinazo, but when it comes to a murder allegedly committed from its lobby, a bank, with its security cameras monitoring every angle, offers little by way of cover. The HSBC's own surveillance cameras, since entered as court evidence, clearly show police and bank security officers aiming and firing their weapons through the plateglass window. This evidence has led to a rare event in the annals of Argentinian justice: the arrest of a former military officer on a charge of murder.
Jorge Varando is a graduate of the School of the Americas, a "counterinsurgency" training camp based in the southern US. He has testified that he did not shoot Benedetto and argues that he acted properly as a security officer defending the bank. In a recent radio interview, In a recent radio interview, he is quoted as admitting to firing his gun, saying that he did so "in total tranquillity" and "to stop those trying to enter the building".
HSBC has so far refused to comment on the case because of the ongoing legal proceedings, except to note that its employee Varando has steadfastly maintained his innocence. It's not yet clear whether Varando will be represented by an HSBC lawyer when the case goes to trial, but the bank had its own counsel at the pre-trial hearings.
HSBC is inevitably involved in some part, because the shooting took place from its premises and its security cameras offer crucial evidence. But that evidence has proved problematic. When the court staged a reconstruction of the murder, matching the videotape of Varando firing his weapon with the site where Benedetto was killed, it became clear someone had changed the angle of the key security camera, making it extremely difficult to match the re-enactment with the original footage of Varando shooting through the glass. Bank personnel said the camera angle had been changed accidentally during routine cleaning.
And the case has attracted even more widespread interest because every month since the murder, friends and family have placed a makeshift memorial to Gustavo Benedetto in front of the bank - and every month the memorial has been mysteriously removed and Gustavo's name erased. This practice finally stopped last November, when a television crew that had been staking out the HSBC building at 3am filmed as two federal police officers pulled up outside the bank in an unmarked car and destroyed the concrete and ceramic monument with crowbars. The officers have since been suspended.
· Out of the ordinary (part two)
Washington File
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usinfo.state.gov
24 January 2003
State Department Briefing Transcript
(Statement/assets blocked of two designated terrorists, Iraq, Russia, Turkey, North Korea, Switzerland, Department/reaction to Rumsfeld's comments, Africa, Brazil, Pakistan, Colombia, China, Yugoslavia, Cote D'Ivoire, consular affairs, Israel/Palestinians) (5830)
State Department Spokesman Richard Boucher briefed.
Following is the transcript of the briefing:
(begin transcript)
U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING
FRIDAY, JANUARY 24, 2003
BRIEFER: Richard Boucher, Spokesman
(ON THE RECORD UNLESS OTHERWISE NOTED)
1:00 p.m. EST
Index
STATEMENT
Assets Blocked of Two Designated Terrorists
IRAQ
Inspectors' Report / Iraq Cooperation
Iraqi Weapons of Mass Destruction Hidden in Syria?
Foreign Secretary Straw and Secretary Powell's Discussions about the Security Council Iraq is Failing to Disarm Peacefully
RUSSIA
Russia Set Against Security Council
TURKEY
U.S. Reaction to Istanbul's Comments on Iraq
NORTH KOREA
U.S. Supports Talks Between North and South Korea
SWITZERLAND
Secretary Powell's Speech in Davos
Richard Haass Comments in Davos
DEPARTMENT
Reaction to Secretary Rumsfeld's Comments
AFRICA
Article 98 Agreement / Secretary Powell's Meeting with President
Guelleh of Djibouti
BRAZIL
Secretary Powell's Meeting with Foreign Minister Amorim
PAKISTAN
Ambassador Powell's Remarks
COLOMBIA
Update on the Two Missing Journalists / Stopping Terrorist Groups
CHINA
Tibetan Death Sentence / Bombings
YUGOSLAVIA
Pierre Prosper's Urges Cooperation with the International Criminal
Tribunal
COTE D'IVOIRE
Peace Agreement Signed in Paris
CONSULAR AFFAIRS
Visa Processing Backlog Affects Businesses
ISRAEL / PALESTINIANS
U.S. Position on Elections
'03 outlook just so-so, but tinged with hope
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[The Atlanta Journal-Constitution: 01/26/03]
By DONALD RATAJCZAK
For the Atlanta Journal-Constitution
Amid reviewing last year's forecast, discussing President Bush's stimulus package and assessing the problems in Georgia at the beginning of Gov. Sonny Perdue's tenure, I forgot to discuss my own outlook for 2003. How can I be graded if I do not hand in my homework?
Of course, I probably was trying to avoid a very difficult task. Three major "geopolitical" uncertainties cloud the horizon. Venezuelan oil has been unavailable for about eight weeks, and the promised additional oil from the Middle East is nearly a month away. With cold weather descending, relief from higher energy prices will not happen before we begin to see dogwoods.
An Iraq conflict probably will lead to oil field destruction in that country (see Kuwait 12 years ago) as well as immeasurable economic and human costs. Even that Venezuela makeup oil from the Middle East could stop if the conflict turns nasty.
Then, there is North Korea and what must be done in that part of the world to maintain stability but register firmness. At a minimum, some diplomatic magic is needed there.
To add to the uncertainties, tax policy will be changed but portions of the proposal, such as the dividend exclusion, are in serious jeopardy. Even the president is ignoring dividend exclusions as he attempts to sell the package as a small-business aid.
Unfortunately, these uncertainties are restraining the decision-making of corporations. Three years ago, Intel's capital spending was $7.1 billion. Projection capital spending for 2003 is only $3.5 billion.
Parked planes, unfinished wireless networks, abandoned power plants and rapidly emptying office space attest to a serious glut of resources. Profits are up about 9 percent in the fourth quarter, but from a 21 percent decline in the previous year.
To further dampen spirits, auto sales are losing their responsiveness to new incentives; the average worker's raise is being spent at the gasoline pump and with the fuel oil deliverer; the strong housing market already is ahead of household growth; and imports are overwhelming local producers. As we see in Georgia, local economies face higher taxes, lower government pay and reduced services.
The outlook for the next six months is unusually cloudy, but I do see the sun shining before year's end. With no more hedging, here is my U.S. forecast for the next 12 months:
Consumer spending, housing and inventory-building will sustain activity through the spring. By then, more clarity will surface on the geopolitical issues. Also, capacity no longer is growing. If jobs begin to grow by summer, as I expect they will, corporate spending will begin to rebound.
Furthermore, the drastic slide in the dollar against European currencies will lead to American goods being sold there. Asia will be more difficult, but our trade balances should begin improving later in the year. And some tax stimulus will be forthcoming. (Given the uncertainties, stimulus is needed and ought to happen sooner rather than later.)
After less than 1 percent real growth last fall, I expect GDP to slowly gain momentum through a 2 percent growth rate in the winter and spring to more than 3 percent in the summer and almost 4 percent as the year ends.
Inflation will remain muted except for oil and some meat products. Consumer prices grew only 2 percent at annual rates in the past three months but should spurt to nearly 4 percent in the winter. Gains of 2 percent to 2.5 percent should be the norm for the remainder of the year, with the possibility of slightly less than 2 percent gains as gasoline prices subside during the summer.
Until the fourth quarter, employment growth will not be enough for the Federal Reserve to even think about raising interest-rate targets. If the current uncertainties prove too constraining, they may even lower rates this winter. Long-term rates will remain near current levels (4 percent yield on the 10-year government note) until activity begins to hum late in the year. Mortgage rates should remain under 7 percent into 2004.
Uncertainty is not the friend of stock investors. Although seasonal factors currently favor equity holdings, the "geopolitical" issues are canceling out those positive money flows. That 9,000 Dow hurdle may not be breached until summer and then only briefly. A more sustained rally to challenge 10,000 is likely late in the fall.
Unemployment rates should rise to 6.5 percent before beginning to subside late in the year. Wage gains will remain anemic, at 3 percent in most shops and under 4 percent in most offices.
Despite this less-than-robust economic recovery, some healing will be accomplished. Households will be saving about 6 percent of their incomes after the next reduction in tax liabilities. Their balance sheets also will continue the improvement that started last fall. American industry will be competitive in Europe and will be fighting back against competitive pressures in Asia.
Indeed, the weak dollar may aid healing in South America, although much more than economics is needed in Venezuela and Colombia.
New capital will displace older systems, especially as corporate profits approach their 2000 levels by the end of 2003.
Thus, I see the glass as half full with a water source nearby. But we need to hold firmly onto that glass as we plow through geopolitical problems in the first half of this year.
Donald Ratajczak is a regents professor of economics emeritus at Georgia State University.