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Despair in Once-Proud Argentina

Wages Fall, Prices Rise

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 166 percent, canned tomatoes 118 percent -- even though both are local products that have had little real increases in production costs.

In March, slum dwellers competed for meat from an injured cow after a cattle truck overturned on a highway in Rosario. "I felt like we had become a pack of wild animals," one participant said. (Enrique Rodriguez-La Capital - Reuters)

_____Graphics_____
Nation in Collapse: A look at poverty, unemployment and the price of food in Argentina.
_____Outlook_____
Argentina, Shortchanged: Former World Bank economist Joseph Stiglitz explains why the once-prosperous country is in economic meltdown: because it followed the advice of the International Monetary Fund.
_____News from Argentina_____
Uruguay to Inaugurate Leftist President (Associated Press, Mar 1, 2005)
Argentina Completes Debt Restructuring (Associated Press, Feb 25, 2005)
Nadal Ousts Third Seed Canas in Acapulco (Reuters, Feb 25, 2005)
Calleri, Puerta Gain Mexican Open Semis (Associated Press, Feb 25, 2005)
Stomach Injury Sidelines Gaudio (Associated Press, Feb 24, 2005)
More News from Argentina

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 Mexico's 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 January's default and devaluation. 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."

The Suffering Middle Class

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 previous record of mental illness, according to her family and doctors, and has spoken only once about that morning.

"She just looked up at me from her hospital bed and said, 'I felt so helpless, I just couldn't take it anymore,' " Gonzalez said. "I can't understand what she did. It just wasn't Norma. But I suppose I can understand what drove her to it. It's this country. We're all going crazy."

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.


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