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Despair in Once-Proud Argentina

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.

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

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."

Scavenging Urban Trash

"There is not enough trash to go around for everyone," said Banrel, one of the participants in the cattle massacre. Rail-thin, he normally passes his days combing the garbage-strewn roads around the Las Flores slums in Rosario, a city of 1.3 million residents 200 miles northwest of Buenos Aires and long known as "the Chicago of Argentina."

If Banrel finds enough discarded plastic bottles and aluminum cans -- about 300 -- he can make about $3 a day. But the pickings are slim because competition is fierce. The misery villages, as shantytowns such as Las Flores are called, are becoming overcrowded with the arrival of people fleeing desperate rural areas where starvation has set in. About 150 new families arrive each month, according to Roman Catholic Church authorities.

With more people in the slums, there are fewer plastic bottles to go around. Banrel said he was getting desperate that day when he joined the mob on the highway.

His family of three -- his wife is pregnant with their second child -- had been surviving on a bowl of watery soup and a piece of bread each day. He earned at least $40 to $60 a week last year working construction. With that gone, and with food getting more expensive, he said, "You can't miss an opportunity, not around here."


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