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Argentina's Recovered Factories: A Story of Economic Success
News Feature
By Eduardo Stanley,
Pacific News Service
In Argentina, hundreds of factories closed their doors in the late
1990s, leaving thousands of workers unemployed. But today, many of these
same workers are reactivating factories on their own terms and breathing life
into the national economy.
ROSARIO, Argentina - August 16, 2004 - Since 1972 the Mil Hojas pasta factory on the outskirts of
this city has churned out delicacies like ravioli and Italian desserts. But Mil
Hojas' fortunes -- along with those of the national economy -- began to decline
with the late 1990s as deep recession set in.
The factory owners decided to abandon it amid a national epidemic of
bankruptcies. Mil Hojas, like many other factories in Argentina, was to
permanently close its doors.
 That
was when its workers decided to act. They took back, or "recovered" Mil Hojas,
transforming it into what today is a thriving cooperative, as Argentina emerges
from one of the worst economic crises in its history.
Today, thousands of workers are reactivating previously closed factories on
their own terms and simultaneously breathing life into the national economy.
Jose Abelli, who leads an association of workers in recovered factories, known
in Spanish as "fabricas recuperadas," says that "capitalism almost destroyed
itself. We are the resolution to the problem. We are looking to create networks
of services and restart the economy." His organization represents 10,000
workers.
Abelli, 48, says the no-holds-barred capitalism that was unleashed in Argentina
in the 1990s destroyed what he calls an unwritten "social contract" that had
granted the country's working class a dignified portion of Argentina's income.
That contract was rendered moot during the 1990s government of President Carlos
Menem, who advocated for privatization and trade liberalization schemes pushed
by the International Monetary Fund. Though the economy grew initially,
unemployment in the country skyrocketed from 6 percent to 24 percent.
"We began to organize to recover the dignity that the system took away from us,"
says Abelli. "The government wanted to give us food but not jobs and health
care. Nor did they want to give us education for our children."
The centerpiece of Menem's economic policy was a currency peg that set the value
of the peso artificially high by decreeing it equal to the dollar. This created
an illusion of prosperity and modernity for some Argentines. But the currency
peg also undermined local industry's competitiveness, as cheaply produced
imports flooded in and Argentine goods became too expensive to compete globally.
Simultaneously, investors took their overvalued pesos abroad to speculate in
foreign markets or accrue interest in U.S. or Swiss bank accounts, sucking the
life out of a traditional industrial sector built on small- and medium-sized
enterprises like Mil Hojas.
"The factories, the machinery, the domestic market were all there, but the
bosses left and they left everything behind," says Abelli. "They abandoned the
ideal of productivity and devoted themselves to speculation."
But worker-owned "recovered" factories like Mil Hojas could help resuscitate
part of Argentine industry. While the sharp devaluation of the peso in the 2002
wiped out the savings of some Argentines, the competitiveness of local goods was
given a boost.
Many Argentine factories are now even dreaming of exporting.
President Nestor Kirchner's election this year has also brought a measure of
stability and end to the paralysis that gripped Argentina following the
resignation of the last elected president, Fernando de la Rua, late in 2001.
Mil Hojas' 15 workers decided to open the factory as a cooperative. Says Jose
Aguilera, the factory's treasurer and a 22-year veteran, "the day that we bought
the factory and it passed into our ownership was very emotional. People would
bring us gifts and call us to congratulate us."
"Our initial objective was only to maintain our source of work -- we worked 12
to 14 hours a day," says Juan Gonzalez, factory secretary. The workers say they
succeeded thanks only to the unconditional support of their families, who
endured early days when there was no cash on hand, even for basic necessities.
But as Mil Hojas recovered clients and reorganized, it achieved stability and
began setting its sights higher. Soon the factory launched new products and
hired 15 new workers. Now all the workers enjoy health benefits and a steady
paycheck.
Argentina's recovered businesses include all kinds, from transport to lunch
counters to a hotel. Some employ 10 to 15 workers but others have staff as large
as 4,000.
"These are businesses with people -- we don't measure them solely on the basis
of profits or losses," Abelli says. "These companies have social worth."
Recovered factories represent "the revival of entire neighborhoods and of an
important sector of the economy," Abelli says.
He cautions that too much pressure from foreign lenders could still derail
Argentina's economic progress. "However, we are optimistic," he says.
PNS contributor Eduardo Stanley (nuestroforo2001@yahoo.com) is a freelance
writer based in the San Joaquin Valley. He hosts the bi-lingual "Nuestro Foro"
weekly radio program on KFCF in Fresno, Calif.
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