Word spread
fast through the vast urban slums ringing Rosario. There
was food on the freeway - and it was still alive. A
cattle truck had overturned near this industrial city,
spilling 22 head of prime Angus beef across the windswept
highway. Some were dead. Most were injured. A few were
fine.
A mob moved out from Las Flores, a shantytown of trash
heaps and metal shacks boiling over with refugees from
the financial collapse of what was once Latin America's
wealthiest nation. Within minutes, 600 hungry residents
arrived on the scene, wielding machetes and carving
knives. Suddenly, according to accounts from some of
those present on that March day, a cry went up. "Kill
the cows!" someone yelled. "Take what you
can!" Cattle company workers attempting a salvage
operation backed off. And the slaughter began.
"I looked around at people dragging off cow legs,
heads and organs, and I couldn't believe my eyes,"
said Alberto Banrel, 43, who worked on construction
jobs until last January, when the bottom fell out of
the economy. "And yet there I was, with my own
bloody knife and piece of meat. I felt like we had become
a pack of wild animals."
The desolation of that day, neighbor versus neighbor
over hunks of meat, suggested how profoundly the collapse
has altered Argentina. Traditionally proud, Argentines
have begun to despair. Talk today is of vanished dignity,
of a nation diminished in ways not previously imaginable.
Argentines have a legacy of chaos and division. In search
of their "workers' paradise," Juan and Eva
Peron declared war on the rich. During the "dirty
war" of the 1970s, military rulers arrested tens
of thousands of people, 15,000 of whom never resurfaced.
And when then-President Carlos Menem touted New Capitalism
in the 1990s, the rich got richer - many illegally -
while the poor got poorer.
Yet some things here never really changed. Until last
year, Argentines were part of the richest, best- educated
and most cultured nation in Latin America. Luciano Pavarotti
still performed at the Teatro Colon. Buenos Aires café
society thrived, with intellectuals debating passages
from Jorge Luis Borges over croissants and espresso.
The poor here lived with more dignity than their equals
anywhere else in the region. Argentina was, as the Argentines
liked to say, very civilized. Not anymore. Argentines
have watched, horrified, as the meltdown dissolved more
than their pocketbooks. Even the rich have been affected
in their own way. The tragedy has struck hardest, however,
among the middle class, the urban poor and the dirt
farmers. Their parts of this once-proud society appear
to have collapsed - a cave-in so complete as to leave
Argentines inhabiting a barely recognizable landscape.
With government statistics showing 11,200 people a day
falling into poverty- earning less than $3 daily - Buenos
Aires, a city once compared to Paris, has become the
dominion of scavengers and thieves at night. Newly impoverished
homeless people emerge from abandoned buildings and
railroad cars, rummaging through trash in declining
middle- and upper-class neighborhoods. People from the
disappearing middle class, such as Vicente Pitasi, 60
and jobless, have turned to pawn shops to sell their
wedding rings. "I have seen a lot happen in Argentina
in my day, but I never lost hope until now," Pitasi
said. "There is nothing left here, not even our
pride."
Late last month, on the eve of the 50th anniversary
of Eva Peron's death, thieves swiped the head of a new
statue of her. Nothing, really, is sacred here anymore.
Ads by concerned citizens appear on television, asking
Argentines to look inward at a culture of tax evasion,
incivility and corruption. But nobody seems to be listening.
Food manufacturers and grocery stores are raising prices
even as earning power has taken a historic tumble. A
large factor in both the price rises and the slump in
real wages is a 70 percent devaluation of the peso over
the last six months.
But the price of flour has soared by 166 percent, canned
tomatoes by 118 percent - even though both are local
products that have had little real increases
in production costs. Severe hunger and malnutrition
have emerged in the rural interior - something almost
never seen in a country famous for great slabs of beef
and undulating fields of wheat. In search of someone
to blame, Argentines have attacked the homes of local
politicians and foreign banks. Many of the banks have
installed steel walls and armed guards around branch
offices, and replaced glass windows decorated with ads
portraying happy clients from another era. Economists
and politicians differ on the causes of the brutal
crisis. Some experts blame globalization and faulty
policies imposed by the International Monetary Fund.
But just as many blame the Argentine government for
runaway spending and systematic corruption. The one
thing everyone agrees on, however, is that there is
no easy fix. Statistically, it is easy to see why.
Before 1999, when this country of 36 million inhabitants
slipped into recession, Argentina's per capita income
was $8,909 - double that of Mexico and three times
that of Poland.
Today, per capita income has sunk to $2,500, roughly
on a par with Jamaica and Belarus. The economy is
projected to shrink by 15 percent this year, putting
the decline at 21 percent since 1999. In the Great
Depression years of 1930-33, the Argentine economy
shrank by 14 percent. What had been a snowball of
poverty and unemployment has turned into an avalanche
since the default and devaluation in January. A record
number of Argentines, more than half, live below the
official poverty line. More than one in five no longer
have jobs.
"We've had our highs and lows, but in statistical
and human terms this nation has never faced anything
like this," said Artemio Lopez, an economist
with Equis Research. "Our economic problems of
the past pale to what we're going through now. It's
like the nation is dissolving."
Every Argentine, no matter the social class, has
a crisis story. Amalia Lacroze de Fortabat, 80, one
of the country's richest women, was forced to offer
up paintings by Gauguin, Degas, Miro and Matisse at
a Sotheby's auction in May. For many of Argentina's
well-to-do, the sale was the ultimate humbler, a symbol
of decline in international stature. Those suffering
most, however, are the ones who had less to begin
with. On the morning of her 59th birthday, Norma Gonzalez
woke up in her middle-class Buenos Aires home, kissed
her husband on the cheek and caught a bus to the bank.
There, before a stunned teller, the portly redhead,
known by her family and friends mostly for her fiery
temper and homemade meat pies, doused herself with
rubbing alcohol, lit a match and set herself ablaze.
That was in April. Today, Rodolfo Gonzalez, 61, her
husband, keeps a daily vigil at the burn center where
his wife is still receiving skin grafts on the 40
percent of her body that sustained third-degree burns.
She had no record of mental illness, according to
her family and doctors, and has spoken only once about
that morning. Argentina long had the largest middle
class, proportionally, in Latin America, and one of
the continent's most equitable distributions of wealth.
Much of that changed over the last decade as millions
of middle managers, salaried factory workers and state
employees lost their jobs during the sell-off of state-run
industries and the collapse of local companies flooded
by cheap imports.
Initially, Rodolfo Gonzalez was one of the lucky
ones. An engineer for the state power company, he
survived the early rounds of layoffs in the early
1990s when the company was sold to a Spanish utility
giant. His luck changed when the company forced him
out in a round of early retirements in 2000.
He was 59 and had worked for the same company for
38 years. Yet he landed a part-time job, and with
his severance pay safely in the bank, he and his wife
thought they could bridge the gap until Gonzalez became
eligible for social security in 2004. Then came "El
Corralito." Literally translated, that means
"the little corral." But there is nothing
little about it.
On Dec. 1, Domingo Cavallo, then the economy minister,
froze bank accounts in an attempt to stem a flood
of panicked depositors pulling out cash. Most banks
here are subsidiaries of major U.S. and European financial
giants that arrived with promises of providing stability
and safety to the local banking system.
But many Argentines who did not get their money out
in time - more than 7 million, mostly middle- class
depositors, did not - faced a bitter reality: Their
life savings in those institutions, despite names
such as Citibank and BankBoston, were practically
wiped out. Virtually all had kept their savings in
U.S. dollar- denominated accounts. But when the government
devalued the peso, it gave troubled banks the right
to convert those dollar deposits into pesos. So the
Gonzalez family's $42,000 nest egg, now converted
into pesos, is worth less than $11,600.
As the family had trouble covering basic costs, Norma
Gonzalez would go to the bank almost every week to
argue with tellers and demand to see a manager, who
would never appear. As prices rose and the couple
could not draw on their savings, their lifestyle suffered.
First went shows in the Buenos Aires theater district
and dinners on Saturday night with friends. Then,
in March, they cut cable TV. Around the same time,
the Gonzalezes' daughter, Paula, 30, lost her convenience
store. Separated and with two children, she turned
to her parents for support. The Gonzalezes had been
planning for 18 months to take Norma's dream vacation,
to Chicago to visit a childhood friend. After the
trip was shelved as too expensive, she seemed to break.
"I can't explain it, and maybe I never will
be able to," Rodolfo Gonzalez said. He added:
"But maybe you can start to figure out why. You
have to wonder: Is all this really happening? Are
our politicians so corrupt? Are we now really so poor?
Have the banks really stolen our money? And the answers
are yes, yes, yes and
yes."
MORE
ON ARGENTINA CRISIS
August 11,2002.
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