Argentina: Kirchner nationalises YPF petrol and provokes the wrath of imperialism

Shrieks of protest from the Spanish government, Repsol, EU leaders, Latin American Presidents and others have been unleashed

Argentina’s Peronist President, Cristina Fernández Kirchner, announcement that 51% of YPF shares would be taken by the state has been greeted with mass support in Argentina and seen as a blow struck against the Repsol multi-national.

Spain’s minister of Industry, José Manuel Soria denounced it as an act of “hostility towards Spain that will have consequences”. Rajoy thundered it is an “arbitrary and hostile act” which breaks the “climate of friendship” between the two countries. The British Financial Times echoed such sentiments. Its editorial, headlined “A shabby act of economic piracy” threatened that Argentina should possibly be “suspended from the G20” and warning Kirchner, “She should not be allowed to forget that actions have consequences” (FT 18/4/12).

The vicious neo-liberal President of Chile, Pinera, and Calderon of Mexico have also joined in the chorus of criticism of Kirchner’s action against an imperialist company. Even Evo Morales the Bolivian President, in a somewhat cowardly reaction, argued it was a bilateral question between two states and that his government enjoyed good relations with Repsol. His own government suffered similar attacks from Brazil when it took similar measures against Petrobras, the Brazilian multi-national!

President of Argentina, Cristina Fernández de Kirchner, with Chilean President Sebastian Pinera, March 2012

The nationalisation of YPF shares is an extremely significant development which has important consequences beyond Argentina. This is what lies behind the outpouring of venom against Kirchner’s state intervention. The ruling class internationally fear that it could set a precedent for other governments to follow during the worsening world economic crisis. “The siren call of populism seduces yet again…” was the headline in Moisés Naim’s article in the Financial Times 19 April 2012. These developments in Argentina are an anticipation of what may develop in other countries as the world economic capitalist crisis intensifies. It that respect they signify a new era.

While there was sharp hostility and opposition to similar steps taken by Hugo Chávez in Venezuela in the past, when his government also took action against Total, BP and Chevron, it did not reach the same pitch internationally as the reaction to Kirchner’s recent intervention.

The international situation is now far more critical for world capitalism than when Chávez intervened against these companies. The prospect of other governments being compelled to intervene and go even further in nationalising sections of the economy, either as result of pressure from the mass of the population, or to try and defend their own interests now terrifies the ruling class.

A new policy by the ruling class?

The intervention by Kirchner in seizing 51% of YPF shares could herald a new changed situation where governments are compelled to step in, through state intervention, to attempt to mitigate the effects of a prolonged serious recession or economic slump.

It also places the question of nationalisation back onto the political agenda which the ruling class fear could be taken up and demanded by the working class. The developments in Argentina are consequently extremely significant internationally.

A further element in this is the geo-political interests in Latin America and the Americas. The perceived decline in the influence of Hugo Chávez is leaving a space which Kircher is attempting to fill. US imperialism has therefore been more cautious in its reaction not wanting to push Kirchner further into the “populist camp”. El País quoted one US official following the recent Summit of the Americas in Colombia as saying: “We have occasional differences with Argentina but we don’t want this (nationalisation of YPF) to compromise our broad co-operation on economic and security” with Argentina. (El País 16/4/12)

The partial re-nationalisation of YPF flows directly from the disastrous consequences of the mass privatisation carried out in Argentina in the 1990’s under the then Peronist President, Carlos Menem. Traditionally Peronism, a populist nationalist movement had adopted a policy of heavy state interventionism. Menem’s change of direction, to mass privatisation, represented the adoption of neo-liberal policies internationally during that period.

It was such a departure for Peronism that it was dubbed “Menemismo”. YPF was privatised in 1992. As with the other privatisations it was a disaster for the masses but bought massive opportunities for Argentinean capitalists and multi-nationals like Repsol which returned to Latin America as the new “conquistadores” buying up whole swathes of Argentina’s and the Latin American economy.

These privatisations were catastrophic for the economy. As Kirchner has pointed out the lack of investment and development in the petrol and energy sector has now resulted in the fact that Argentina has to import gas and petrol for the first time in more than 17 years. This is despite the discovery of a large shale gas field, known as the Vaca Muerta, dead cow. “This emptied policy, of no production, no exploration has practically turned us into an unviable country due to business policy and not because of lack of resources” was one of the justified reasons that Kirchner gave taking a majority share in YPF. (El País 17/4/12)

In the recent period the privatised Aerolineas Argentinas, electricity companies and some others have also been renationalised, in part for similar reasons.

This change of policy by the Kirchner government has followed a sharp slow down in the economy, rising inflation and the introduction of cuts and also rising unemployment. Effectively what she is saying is if the privatised sector will not ensure essential services then the state will step in and do it. However, despite the outpouring of hostility from the representatives of capitalism and imperialism Kirchner has not carried out a socialist nationalisation.

Trotsky and Mexico 1938

In March 1938, the Mexican radical populist government headed by Lázaro Cárdenas nationalised Anglo-American-Dutch petrol companies. Trotsky argued, that this step should be supported and that the trade unions and working class should fight for democratic workers control and management in the new state petroleum industry despite it not being carried out on a socialist basis. This approach has lesson for Argentina today.

Similarly British Marxists when faced with the post war Labour governments nationalising the coal, railways and later other sections of the economy demanded democratic workers’ control and management. Concretely they proposed that the boards of such companies should be comprised of one third from the trade unions in the industry, one third from the TUC – representing the wider working class and one third from the government.

Kirchners’ partial nationalisation has been enough to provoke the wrath of the ruling class. It represents not simply a change in policy by the government. It is a change in policies for the Kirchner dynasty itself. They have been no friend of the Argentinean working class and poor. Her predecessor and now deceased husband, Néstor Kircher, was an enthusiastic supporter of the privatisation of YPF in 1992. He sold a 5% share of YPF to Repsol held in Patagonia, in the province of Santa Cruz where he was then Governor in 1999.

As Repsol increased its ownership of YPF to 99%, Kirchner then backed a policy of “Argintineanisation” and insisted that a percentage be held by Argentinean interests. As result the Argentinean group Peterson, owned by the Eskenazi family, was given 25% of YPF shares. These have not been touched by the recent partial nationalisation.

In Government the Kirchners amassed a fortune. When elected Néstor Kirchner was elected President in 2003 the couples’ fortune was estimated at US$2.35 million. Once in office the Kirchners’ wealth soared by a stunning 900% in seven years. By the time of Néstors’ death in 2010 they were worth US$18 million with 27 houses, apartments, stores and hotel businesses to their name. In 2003 the family had no business interests in the Patagonian town of El Calafate. By 2010 the Kirchners ran 60-70% of economic activity in the town.

The steps taken by Cristina Kirchner, which will be immensely popular in Argentina, are a capitalist state intervention to try and resolve the energy crisis. They have been taken in part to try and resolve the energy deficit and failure of Repsol to develop the industry. They are also an attempt by her to rally support against a background of a decline in the economy and attacks on the working class. She has tried to invoke the memory of the radical populist nationalist Peronist Evita Peron – announcing the measures in front of an image of a smiling Evita in the presence of the Madres de la Plaza – the mothers of the thousands disappeared during the military dictatorship.

Spanish president Mariano Rajoy

This intervention demonstrates how the ruling class can be compelled to change its policy and support state intervention when compelled to do so or its interests are threatened. In doing so, Kirchner has struck a small blow against the interests of Spanish imperialism and its multi-national Repsol. In doing so she has raised the spectre of further and bigger blows being struck in other countries and placed the issue of nationalisation back on the political agenda. This has terrified the ruling class internationally. The demand for nationalisation now needs to be taken up by the workers’ organisations internationally. It is a positive step that the IU in Spain has opposed the Spanish government and defend the right of the Argentinean government to nationalise YPF.

However, the purchasing of 51% of YPF shares does not signify a ‘socialist nationalisation’ . This was made clear by Kirchner herself when she stated, “The model is not statisation, that is clear, but recuperation of sovereignty and control of the functioning of the economy”. (El País 17/4/12).

The CWI is opposed to the protests of the imperialist and capitalist politicians. We support all genuine measures taken against imperialism. We demand that real action is taken against the imperialist domination of the economy and the national capitalists that exploit the peoples of Argentina. We therefore support a democratic socialist nationalisation of the entire energy sector. For nationalisation of Repsol, all multi-nationals and all of YPF with compensation to paid only on the basis of proven need. The nationalised energy sector should then be run democratically by the working people of Argentina as part of a democratic plan of the whole economy based on the nationalisation of the major companies and fiancé sector.

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