Life in Argentina's free-fall economy
How three families in this once-rich country are dealing with the financial crisis
(Page 3 of 5)
President Duhalde is a Peronist whose populist rhetoric and appointment of his wife "Chiche" to oversee social programs have reminded many of the original Perón. But with the country desperate for international funding to survive, the path the government will take remains unclear.Skip to next paragraph
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Back at the salesroom, Guichané insists that "plastics has a future, that's not the problem," offering a post-modern variation of the famous line from "The Graduate." "It's this government that could do us in."
He pushes a hand through his gray hair and pulls an electricity bill out of a stack of unpaid invoices: 330 pesos for energy consumed, total bill 962 pesos with taxes and charges rolled in. Then a water bill calculated not on consumption - the factory uses very little - but on the business's square footage. "That's just an example of how we in Argentina got where we are," he says.
The political failures behind Argentina's collapse are many, but the central problem that has left the country bankrupt only a half-decade after achieving international "model country" status is government spending, says Felipe Noguera, a political consultant here.
"The 90s were a decade of huge inflows of cash, but empty coffers and a crushing debt" - $142 billion - "are what the government has to show for it," Mr. Noguera says.
As the 80s' hyperinflation was mastered and economic growth zoomed higher, tax revenues soared. Argentina also carried out one of the world's largest privatization plans, bringing in billions of dollars. With the country seemingly doing so well, private and public international lenders were happy to join what is now simply called "la fiesta" - the party.
But as the Argentine economy surged, government spending doubled. And with weak checks and balances, no regulatory agencies to accompany the privatizations, and a civil society with little means to ensure accountability, "la fiesta" benefitted only a few, and poverty grew.
Thomas Scheetz, director of the small watchdog group Citizen Power, says most Argentines know the story of a $600 million fund established for the Province of Buenos Aires in the mid-1990s when President Duhalde was governor. Among its goals was to solve severe drainage problems.
"It's emblematic of the mess we're in," Mr. Scheetz says. "The money was spent, it's gone, but none of the infrastructure work was ever done, and recently we had flooding that wiped out crops and farm incomes that should have been safe with the envisioned project," he says. "Now people are demanding to know where the money went."
Like many Argentines, Guichané knows about the public works fund, which he calls the tip of the iceberg. What worries him most is that a government he completely distrusts could end up making him lose livelihood and house.
"It's why we're demonstrating in the streets," he says. Argentina is a wealthy country "that hasn't known how to turn that to the benefit of the majority," he adds. I hope that with this hard hit, we can change that."
But the Guichané children are less sanguine. Daughter Ana Laura, an architecture student, says she is tempted when her friends discuss their dreams of leaving Argentina for Spain, Italy, the US. One recent poll showed that almost half of those surveyed said they would leave Argentina if they could.
"Sure, we're with our parents in this. I go to the marches, too," she says. "But we have even less hope in the future than they do."
Younger brother Gonzalo, who left school because he saw no benefit from it, says he's ready to "fight" for the only future he sees for himself: the family business. But in order to succeed, "Everything about Argentina - the way the politics and economic system are run - has to change," he says. "We Argentines have learned we can't expect anyone to do these things for us," he adds, "I just don't know if we can change things ourselves."
Despite such doubts, the fact that Argentines are in the streets, attending neighborhood assemblies to fight unpopular decrees, and loading the Internet with protest ideas and calls to action, has some observers cautiously optimistic that the civil society a post-crash Argentina needs is in the formative stages.