In an interview this week with the Financial Times, Roberto Lavagna said recent occupations of hamburger restaurants and Repsol's head offices in Buenos Aires might adversely affect investment, and that "maybe it is time to use more actively what the legal system permits".

His main concern is that by undermining the security of private businesses, the actions will affect foreign and local investors' willingness to commit funds to Argentina. Although foreign direct investment has yet to recover from Argentina's catastrophic default and devaluation 2½ years ago, local investment has been growing vigorously and has helped the economy expand more than 10 per cent in the year to the end of March.

So far President Néstor Kirchner has adopted a gentle approach to the demonstrators - known as piqueteros - even though actions such as regular road blocks in Buenos Aires and other cities have become a source of increasing irritation. Indeed, government social programmes such as a P$150-a-month handout to unemployed workers have helped finance the piquetero movement.

Mr Kirchner, who took office in May 2003, is also mindful of how the killings of two piquetero demonstrators two years ago by police became something of a cause célèbre for opponents of his predecessor Eduardo Duhalde.

However, the extension of the protests to private companies could be leading to a change of tack. Radical piqueteros plan to step up direct action against international companies to secure food and other supplies for soup kitchens in poor urban areas.

Raúl Castells, leader of the hard-left Independent Movement of Unemployed and Pensioners, told the Financial Times this week that he was preparing a list of new potential targets from the 50 biggest foreign-owned businesses in Argentina. "If the government can't provide for the needs of the people, then multinational companies have to help," he said.

As part of efforts to isolate Mr Castells, government ministers including Alicia Kirchner, the president's sister, spoke at a rally last weekend to launch a more moderate piquetero faction that has pledged to work with the government.

Moderate leaders said they would support the president "in Congress, in the media and on the streets".

Government supporters also accused Mr Castells of acting on behalf of Mr Duhalde, a rival leader in the faction-ridden ruling Peronist party.

Mr Lavagna said that the piquetero protests reflected a difficult social situation and persistently high unemployment, despite government success in job creation. He said 2m jobs had been created in the last year and a half but "we still have to create between 1.5m and 1.8m more".

Even so, some groups were taking a more aggressive approach and were aiming to "make political points", said Mr Lavagna. "It is proving difficult to negotiate with them because maybe they are thinking the worse it gets the better.

"The whole society has to try to use more actively the instruments that we have. Some of the laws on the books [have been] applied in slow motion."

Ref:  http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373253966&p=1012571727102