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ARGENTINA
Beyond the breaking point
5/23/2002
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Losing its European flair to the crisis, Buenos Aires becomes just an ordinary Latin American city.

Anyone who visited Buenos Aires for the first time just four months ago, when the capital was immersed in crisis but still retained its European flavor, today would find just an ordinary Latin American city.

They would find the traditionally reserved residents, who used to hold themselves apart from the rest of the country’s impoverishment, in a state of upheaval and protest.

According to sociologists, the massive street protests of Dec. 20 — which led to the resignation of then-President Fernando de la Rúa (LP, Jan. 14, 2002) — marked the breaking point between the old Buenos Aires and the new.

Sociologists and economists agree that those events revealed the fragility of Argentina’s political system and, especially, the failure of the neoliberal economic policies originally promoted by former President Carlos Menem (1989-99).

Today, Buenos Aires is a reflection of the country: a large city with little street life, where shops and supermarkets are closed or serve just a handful of customers, where banks and private businesses — which most benefited from the neoliberal policies — have put bars over their facades after protesting crowds smashed their windows and threw their furniture and computers into the street.

One only has to walk the streets to feel the sense of crisis.

According to the government’s National Institute of Statistics, during the first four months of this year, the number of subway riders decreased by 14.6 percent, bus riders by 19 percent and urban train riders by 52.7 percent compared with the same period last year. Argentines have reduced their telephone use by 12.2 percent and their consumption of fuel and electricity by 12.7 percent.

National indicators for the first quarter of this year demonstrate the crashing end of a decade of neoliberalism that the International Monetary Fund and World Bank imposed on the region. Argentina had been considered a shining example of such policies.

According to the Argentine Federation of Chambers of Commerce, 32,000 retail businesses and small industries have closed. Last year, 122,000 jobs were lost in the country’s three largest cities, Buenos Aires, Córdoba and Rosario, 24,000 of them in the last week of December alone. According to the Ministry of Labor, another 89,000 disappeared between January and April.

Despite a ban on layoffs until June, in the first two months of the year the number of companies seeking permission to lay off workers tripled, with 174 filing requests, compared to 59 during the same period last year.

Unemployment stood at 18.3 percent in October. By April, it had risen to 22.4 percent. According to the Economy Ministry, 3.1 million Argentines are currently unemployed.

Accumulated inflation for the first four months of the year reached 21.1 percent, although the real rate was 31.3 percent for the poorest 20 percent of Argentines and 14.2 percent for the wealthiest 20 percent. For the poor, the difference was due to food costs, which represent nearly half their monthly expenses. Food is among the items that have most increased in price. Wealthier Argentines, meanwhile, have reduced their high consumption of luxury goods and services, whose prices have risen the least.

The price of the basic market basket of goods has had a major effect on families’ budgets. Between January and April, the price of cooking oil rose by 136 percent, flour by 121 percent and chicken by 113 percent, according to the Consumer Defense Association (ADELCO).

According to the Economy Ministry, nearly 18 million Argentines, 49 percent of the population, now live below the poverty line, which is considered to be a monthly income of US$136 for a family of four.

In dollar terms, wages have fallen an average of 60 percent, while the average annual per-capita income fell to $2,607. In 1997, Argentina ranked first in the region with a per-capita income of $12,013, according to the UN Development Program. Now it stands behind Uruguay, Chile, Brazil, Mexico, Venezuela, Panama and Costa Rica, virtually tied for eighth place with Peru, where annual per-capita income is $2,610.

More and more companies are lowering wages, especially for employees earning mid-level or high salaries. About 30 percent of businesses cut salaries last year, and another 20 percent said they would do so this year. While it is illegal to force employees to take pay cuts, companies have found a way around the restriction by filing a formal document with the Labor Ministry in which the employee agrees to accept the lower wage.

Unlike other critical times in the country’s history, the breakdown of the economic model has caused Argentines to react as a group, rather than individually. Some debate in neighborhood assemblies or take to the streets in protests that sometimes turn violent. Others have joined together to take over bankrupt companies, engaged in community activities, or turned to an "economy of solidarity" that includes bartering or neighborhood gardens, which used to be a recourse for those marginalized from the economic system (LP, May 21, 2001, and May 3, 1999).

Since the end of December, neighborhood assemblies — with the slogan, "Que se vayan todos," roughly translated, "Throw them all out" — have provided a forum for residents to agree on actions and identify their enemies in the financial sector and international agencies.

Although some ideas that have arisen in the assemblies, such as a boycott of private businesses and some media, have failed, the assemblies have been a political success. The public "outing" of party leaders identified with the failed model has made it difficult for most government functionaries and legislators to walk the streets without drawing public ire.

"So great is the repudiation of the leadership that made this model of exclusion possible that assembly participants generically reject politics without noticing that what they’re doing is, in fact, political," sociologist Alcira Argumedo said. "And when I say assembly participants, I’m speaking of society as a whole, not just the people who meet in the streets and parks."

Social analysts are watching the phenomenon with both enthusiasm and caution. Federico Schuster and Fortunato Mallimaci agree that "Que se vayan todos" expresses both people’s sense of being fed up and their lack of trust in political leaders.

Mallimaci, however, calls it "simplistic, because it fosters a lack of belief in politics and excludes union leaders, businesspeople and church leaders who are part of the system and who could lend themselves to a rebirth of authoritarianism."

Schuster considers the slogan "fair, understandable, justifiable and all-encompassing," adding, "It’s not likely to be used by the type of authoritarian leaders we’ve seen in the past."

Observers agree that the protests are putting an end to the old order, but say that they will not necessarily lead to a new alternative. Many ask where new political leadership is likely to emerge — from protest movements, social organizations, neighborhood assemblies, educational centers or party youth movements?

For the moment, no one has the answer.

 


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Crisis has dimmed Buenos Aires
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