In Argentina, likely labor pact could boost ruling party fortunes

A key appointment by Argentine President Ra'ul Alfons'in heralds a possible realignment of political forces and a significant shift in the government's economic priorities. Mr. Alfons'in's recent naming of Carlos Alderete, head of the influential Power Workers' Union, as new minister of labor is essentially a marriage of convenience that could boost the long-term prospects of the President's ruling party.

In this marriage, one partner is a beleaguered government that has hit a mid-term low in opinion polls largely because of its economic stabilization strategy. (The strategy has reduced real wages by 20 percent in the past 18 months.) The other partner is a new grouping of major trade unions which Mr. Alderete is expected to bring with him into a new pact with government and business.

Such a move could win the government a respite from the labor protests that have plagued it for the past two years and at the same time weaken an already divided, rival Peronist party before the critical elections scheduled for next fall. Alderete is a Peronist union leader.

In September elections, half the seats in the lower house of Congress, the governorships of all 23 provinces, and control of more than 10,000 municipalities are up for grabs. The ruling Radical Civic Union Party is concerned that labor unrest in the next six months could cause it to lose the elections to the Peronists. A loss of control of the regional government apparatus would almost certainly lose the Radicals the 1989 presidential elections.

Following the 1983 election defeat of the Peronist party, the group of unions now supporting Alderete was displaced as the controlling sector of the powerful labor union confederation by a new labor sector. The strategy of new labor leader Saul Ubaldini has been to try to force a sharp shift in economic policy by mobilizing workers in major actions against government. He has organized eight general strikes since 1983. Working with the Peronist party, he was clearly hoping to use the economic situation as the principal target of attack in the fall elections.

However, the Radicals' deft political footwork is expected to win them six months of peace on the labor front and quite probably the September vote.

But if one-half of the bargain is six months of labor peace, the other half is a shift in government economic priorities. Just one month ago, the government reintroduced a tight price-income policy, ruling out further wage increases until July, in an attempt to contain the inflation rate.

Alderete's appointment should soon bring an announcement overturning all that. In exchange for a no-strike deal, the government is expected to return to an index linking wage rises to inflation. Industry leaders say they are willing to discuss a ``social contract'' with government and union leaders as long as deeper structural problems are addressed. The possibility of an agreement seems more likely now than at any time in three years of democratic rule.

If all goes as planned, the marriage of convenience might therefore turn into a more lasting affair.

On the political front, the Peronist opposition has been divided and rudderless since the death of its founder, Juan Per'on, in 1974. The party includes every shade of political opinion from far left to far right. Most political analysts predict its eventual rupture, which is most likely if the Peronists lose the fall elections.

On the economic front, a government-union-industrialists pact would appear to be in the interests of all. For the unions, there is promise of a return to free collective bargaining next year. For industrialists, political stability, labor peace, and continuity of the government's industrial strategy would create a more favorable climate for investment.

For the government, concessions to unions could mean support from a major faction of the Peronist movement for a series of structural changes that the Radicals want to push through. They need another term of office to do so.

These changes include: reforming the financial system, opening up the economy to improve export competetiveness, consolidating economic integration plans with Brazil, and constitutional reform to create a prime ministerial style of government.

The last will require a two-thirds majority in Congress, which can only be obtained by forging an alliance with an important sector of the Peronists.

Alfons'in is widely rumored to have his sights set on being the country's first prime minister, leaving a lesser party figure to perform a president's time-consuming ceremonial functions. The ball has been set rolling, and the Peronists, who oppose the new arrangement, have not showed signs they can prevent it.