Argentina: Nationalisation provokes wrath of imperialism

Tony Saunois, Committee for a Workers’ International
Argentina's Peronist president Cristina Kirchner, photo BBC

Argentina’s Peronist president Cristina Kirchner, photo BBC

Shrieks of protest have been unleashed against the partial nationalisation of YPF, the Argentinean subsidiary of the Spanish petrol multinational Repsol. These emanated from the Spanish government led by prime minister Mariano Rajoy, European Union leaders such as Barroso, right-wing Latin American presidents and others.

The Financial Times echoed such sentiments, warning Argentina’s Peronist president Cristina Kirchner: “She should not be allowed to forget that actions have consequences” (FT 18/4/12).

However, Kirchner’s announcement that 51% of YPF shares would be taken by the state has been greeted with mass support in Argentina.

The nationalisation of YPF shares is an extremely significant development which has important consequences beyond Argentina. The ruling classes internationally fear that it could set a precedent for other governments; and that these developments in Argentina are an anticipation of what may develop in other countries as the world economic capitalist crisis intensifies.

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

New situation

Argentina nationalises Spanish multinational company Repsol's operations in the country, the oil company YPF

Argentina nationalises Spanish multinational company Repsol’s operations in the country, the oil company YPF

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 a result of pressure from the mass of the population, or to try to defend their own interests now terrifies the ruling classes.

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’.

Spanish paper 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 cooperation on economic issues and security” with Argentina.

The partial renationalisation of YPF flows directly from the disastrous consequences of the mass privatisation carried out in Argentina in the 1990s 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 neoliberal policies internationally during that period.

YPF was privatised in 1992. As with the other privatisations it was a disaster for the masses but brought massive opportunities for Argentinean capitalists and multinationals like Repsol which returned to Latin America as the new ‘conquistadores’ buying up whole swathes of Argentina and the economies of Latin American.

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.

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

This change of policy by the Kirchner government has followed a sharp slowdown 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.

Despite the outpouring of hostility from the representatives of capitalism and imperialism, Kirchner has not carried out 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).


Leon Trotsky

Leon Trotsky

In March 1938 the Mexican radical populist government headed by Lázaro Cárdenas nationalised Anglo-American-Dutch petrol companies. Socialist revolutionary Leon 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 lessons for Argentina today.

Similarly in Britain, when faced with the post-war Labour governments nationalising the coal, railways and later other sections of the economy, Marxists 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.

Kirchner’s partial nationalisation represents a change in policies for the Kirchner dynasty itself. They have been no friends of Argentina’s working class and poor.

Her predecessor and now deceased husband, Néstor Kirchner, 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 insisted that a percentage be held by Argentinean interests. As a 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 Néstor Kirchner was elected president in 2003 the couple’s 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 Néstor’s 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.

This capitalist state intervention is also an attempt by Kirchner 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 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.

The demand for nationalisation now needs to be taken up by the workers’ organisations internationally. It is a positive step that the IU (United Left party) in Spain has opposed the Spanish government and defended the right of the Argentinean government to nationalise YPF.

The CWI supports all genuine measures taken against imperialism and calls for the democratic socialist nationalisation of the entire energy sector, with compensation paid only on the basis of proven need.

A 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 finance sector.