Argentina: The Armor-Plated Hare

When he succeeded in a military coup last June, General Juan Carlos Ongania’s prize was a government with a budget deficit of about $800 million. He won possession of a national oil company so overburdened with incompetent politicians that Argentina was importing the fuel for the first time in a decade. He was boss of government-owned railroads with so much obsolete equipment and featherbedding that they were costing taxpayers $1,000,000 a day. Also in the package was a seaport complex that had been idled by strikes for a total of 85 days the year before. For a start, he raised some $40 million by a tax on autos, collected delinquent income taxes by allowing payments on the installment plan. He boosted prices on fuel, electricity and subway fares—to increase the profits of state enterprises. To discourage costly labor disputes, he issued a decree calling for compulsory arbitration.

Trimming Fat. Last week President Ongania was acting more like an armor-plated hare than a tortoise. To encourage exports so that the country could pay a $700 million foreign debt, the new President devalued the peso by 16% to about 250 for a U.S. dollar. In a nationwide speech, he advised that “the style today will be to export everything possible and to consume what’s left.” He even began negotiations with private companies to renew the oil contracts that the previous administration had canceled.

Dealing with labor was another matter. When Ongania reduced the number of holidays and trimmed other fat enjoyed by longshoremen, some 8,000 union members in Buenos Aires went on strike. Ongania sent troops to protect those who wanted to work; soon loading operations were back to normal. Surprisingly, the largest union association, the Confederation General del Trahajo, chose not to defend the dock workers. When the C.G.T.’s new executive committee conferred with Ongania this month, he was in no mood to temporize. “I would like to be popular,” he said. “Instead, we have a lot of sacrifices to ask of everybody.”

When it comes to the railroads, the task may not be so easy. The unpredictable, accident-prone trains of the Argentine are run by a force that includes a reported 40,000 featherbedders. Warning Ongania in advance about any move to change their work conditions, 173,000 trainmen walked off their jobs for 24 hours last week in support of the striking longshoremen.