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Commies, Inc.: cornered by a wretched economy, Argentine leftists look to entrepreneurship and branding. Yes, branding.

In a shack made of scrap wood outside Buenos Aires, a man and four women make bizcochos. Flour, nuts and sugar are mixed, molded and then baked in a brick-and-mud oven. Once cooled, the crunchy cookies are wrapped and delivered, mostly on foot, to kiosks and markets. Each package sells for US$0.35.

Small change, but the cookie operation is the heart of a merchandising effort that includes more than 400 mini-enterprises in this and other slums across Argentina. They make everything from ashtrays to bandanas, pasta, perfume, sneakers and stools. And they have a brand name: MTL.

Movimiento Territorial Liberacion, the Land Liberation Movement, is a group of piqueteros, protesters from Argentina's jobless underclass. A main mission of the 20,000-strong movement, other than taking over land, is to use government welfare benefits to turn the jobless into bakers, carpenters and weavers. "The only way out of poverty is to revive a working culture, and then get to work," says Alberto "Beto" Ibarra, leader of MTL, which is aligned with the Communist Party.

Government trade policy during the 1990s made it hard for Argentine products to compete against cheaper foreign goods. Huge public debt later forced economic collapse. More than half of the country's 36 million now live in poverty.

With banks on the ropes, and likely uninterested in micro-financing anyway, welfare payments provide start-up capital for protesters-turned-capitalists. Every month, Argentina's government pays two million jobless workers $53 each in exchange for four hours of labor a day typically cleaning streets or painting hospitals. MTL pressured the government instead to turn over about 10% of its subsidies to its workers, who use the money to run their micro-firms.

The handouts are meager: A family of four needs almost five times the government dole to buy basic goods each month. But the money makes it possible for bread bakers, for example, to almost double their monthly income, says MTL organizer Jose Barrera. At the end of the month, each worker takes home $50 in personal profits on top of the original $53 subsidy payment, he says.

MTL also provides start-up cash, money it collects by taking 15% of profits from each mini-business. The system is voluntary but nearly every MTL collective takes part. It's not easy. Greed forced one collective to suspend its sneaker business; one of the workers thought he should take a larger portion of the profits. Production must be financed out of revenues, sometimes slowing work. and supplies can't be bought in large, discounted quantities. To expand, sales must increase or capital must be raised.

Sales talent, not surprisingly, is hard to come by. "We need natural salespeople," says Barrera. "It's hard for most of our guys. They go out, get turned down and then get depressed. They don't want to go back to make the sale. We need people who are persistent"

Ana Maria Taborda, a former social worker, makes MTL-branded lollipops in a brick bungalow a few blocks from the MTL bakery. Taborda's sales have quadrupled since January, she says, to 40 packages of lollipops a day at $0.70 a pack. For Easter, she branched out into chocolate eggs. Now her 10-person collective is talking of making other candies and chocolates. As modest as the operation is, Taborda expects to soon challenge candy giants like Argentina's Arcor and the U.K.'s Cadbury Schweppes, underselling them by 20%. "We want to sell not only in this community, but nationally," she says.

Branding might seem an odd turn for traditionally logo-loathing leftists, who recently blocked the entrance to a McDonald's restaurant to protest U.S. business practices and the Iraq war. But the MTL drive, launched in January, is designed to do more than sell more goods, says Ibarra. He wants to shake off a widely held perception that piqueteros are lazy, uneducated welfare-scroungers. "When we block roads, people call us radicals and they yell at us, 'Go to work,'" he says. "With the brand, we are showing them that we are working."
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Comment:Commies, Inc.: cornered by a wretched economy, Argentine leftists look to entrepreneurship and branding.
Author:Newbery, Charles
Publication:Latin Trade
Geographic Code:3ARGE
Date:Jul 1, 2003
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