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ARGENTINA: President Urges Boycott of Shell Products
By Marcela Valente
BUENOS AIRES, Mar 10, 2005 (IPS) - In an unprecedented gesture, Argentine
President Néstor Kirchner urged the public Thursday to boycott Royal
Dutch/Shell's products, to protest what he described as an "unjustified"
increase in the prices of petrol and diesel fuel.
"Argentines don't have to buy anything from Shell. Let's unite and not buy a
single thing from them, not even a can of oil, so they realise that we will
not put up with this kind of thing anymore," Kirchner said in response to
Wednesday's 2.6 to 4.2 percent fuel price hikes by the Anglo-Dutch energy
giant.
Shell said it boosted prices because of the rise in the international price
of oil. However, its local competitors have so far abstained from following
suit.
The president of the Consumer Education Centre, Sandra Andrada, told IPS
that the call for a national boycott is "a mature strategy, the best option
in a country where it is the free market that regulates prices."
She also underlined the novel aspect that the current campaign was called
for by a president.
"We were not previously consulted, but we see it as a very timely decision
because it will serve as a warning to other companies, to show them what can
happen if they boost prices in a compulsive manner," said Andrada.
Economist Claudio Lozano with the Central de Trabajadores Argentinos (CTA)
trade union federation commented to IPS that the boycott is "an interesting
strategy, because companies that raise their prices unjustifiably, when they
are already making extraordinary profits, need some kind of discipline."
Lozano, who is also an opposition lawmaker, said the price hikes are not
justified because there has been no change in the company's costs, domestic
demand remains sluggish, and most companies are not yet producing at full
capacity.
He also said there has been no increase in wages to explain the decision to
raise prices. On the contrary, he noted, the purchasing power of wages and
salaries is still 15 percent lower than it was prior to the late 2001
economic collapse.
However, Lozano said that if the government is determined to pressure
transnational corporations to keep their prices in line, it should draft
anti-monopoly bills or laws aimed at guaranteeing supplies in key sectors,
in addition to calling for a boycott.
"State regulation should accompany the citizen action," said Lozano.
Kirchner's call for a boycott came as a surprise during an event at the
government palace held to announce the distribution of school smocks to
children in poor neighbourhoods.
He said consumers should "peacefully" reject Shell products to protest the
price hikes.
"There is no better action than this 'people's national boycott' of those
who are abusing the people," said the president, who thanked two of Shell's
big competitors in Argentina, the YPF-Repsol Spanish oil giant and Brazil's
state-owned Petrobrás, for "not following" the example of the price hikes.
The government is concerned about the impact of the rise in fuel prices, as
well as increases for other products (including beef and construction
materials), on the cost of living in a country where nearly half of the
population of 37 million is still below the poverty line.
According to public and private sector projections, inflation for the first
quarter of 2005 could be almost as high as the inflation rate for all of
2004, which stood at 3.7 percent. Consumer prices climbed 2.5 percent in
January and February, and are expected to rise one percent this month.
A local resident of Arroyito, in the north-central province of Córdoba, told
IPS that in his small city, where the Arcor food company produces candy for
export around the world, the wage increases ordered by the government in
December were merely offset by raising prices.
"Our wages were raised, but we at once noticed that the prices of the food
produced by the company had gone up. Local stores told us it was because of
the year-end holidays, but after that, the prices did not go back down,"
said the source, who did not give his name because he works for Arcor.
Hyperinflation was controlled in Argentina in the early 1990s. But inflation
has once again become a source of worry for the government, especially since
the recent debt swap that restructured the public debt, which Argentina
defaulted on in December 2001.
The price hikes were the main focus of headlines in the local papers
Thursday. The president had already criticised what he called an attempt by
some companies to rake in "exaggerated profits" and accused Shell in
particular of "not collaborating" with Argentina's economic recovery.
He also lashed out at stockbreeders who increased domestic prices of beef.
"I think it's great that the beef industry is doing well and increasing its
exports, but it should not raise prices on the domestic market," Kirchner
said Wednesday.
He later said he would "not tolerate" a new outbreak of inflation. "We will
work steadfastly and gradually adopt measures. We will not sit back and just
watch prices go up, without doing anything about it," he warned.
Activists with the unemployed movement picketed outside Shell headquarters
in Buenos Aires to protest the price rises. Luis D'Elía, with the Land and
Housing Federation, said Shell "wants to sabotage Argentina's recovery from
the crisis."
D'Elía announced that the movement would urge the public to back the
boycott, and said that if the prices were not reduced, it would block access
to the company's gas stations.
(END)
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