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Wednesday, 25 September, 2002, 12:30 GMT 13:30 UK
Blackout protest in Argentina
A demonstrator carries a sign reading
Intentional blackouts are a new tool for protest
The lights have gone out in Buenos Aires and across Argentina as the country's citizens, already enraged by economic privation, protested against huge rises in utility bills.

For half an hour from 8pm local time (2300 GMT), citizens turned off both home and outside lights, while hundreds of drumming protesters gathered in the streets.


Not only do the utilities want us to pay higher rates, but the services have never improved since they were privatised

Vilma Ripoll
Buenos Aires councillor
"This is abuse!" yelled one besuited protester in Buenos Aires. "Who can afford to pay more than they already are?"

The rate hikes - 275% for international phone calls, 50% on heating gas and 35% for electricity - have been proposed by utilities to compensate them for losses triggered by the peso's devaluation against the dollar earlier this year.

The peso has fallen almost three quarters in value since then, and the largely foreign-owned utility companies - which have been suffering from a rate freeze since January - are up in arms.

Collectively, the utilities invested about $5bn, largely borrowed in hard currency, over the past decade to improve services, and the calamitous slide in their income has forced many into default.

No win situation

The deadlock is just one more symptom of the chaos which exemplifies the Argentine economy almost a year on from defaulting on its international debts in December 2001.

The government would like to compromise with the utilities, not least because it might help the country's cause with its foreign creditors.

But the rises, should they come into effect, would probably drive inflation through the roof. After almost a decade of flat prices thanks to a dollar-peso peg, prices soared 37.8% in the first eight months of this year.

With half the population below the poverty line and one-third out of work, the utility hikes may well simply be unsustainable.

And a court has ruled that the government's wish for public hearings - an attempt to take the edge off the public's disdain for yet more cost-of-living hikes - is illegal.

Back to the state

The ruling is based on the government's own emergency legislation outlawing rate increases, passed early on in the crisis.

City councillors welcomed the decision.

"Not only do they want us to pay higher rates, but the services have never improved since they were privatised," said one, Vilma Ripoll.

"They should all leave and we should nationalise everything."


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16 Aug 02 | Business
14 Aug 02 | Business
15 Aug 02 | Business
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