Argentina Economy Recovers From Meltdown

A luxury cruiser is anchored at Buenos Aires Port as another one is tugged off, Jan. 17, 2007. Five years after a financial meltdown forced Argentina to unlink it's peso from the dollar, this is one of Latin America's fast-growing economies. (AP Photo/Natacha Pisarenko) (Natacha Pisarenko - AP)

BUENOS AIRES, Argentina -- Five years after Argentina's economy melted down, triggering food riots, supermarket lootings, devaluation and debt default, Maria Elena Lopez is still scavenging in the streets for recyclable paper.

But today there's less competition and it takes less of her day to amass $5 worth of junk, pushing a creaky wooden cart through an upscale Buenos Aires suburb in search of paper, cardboard and anything else she can sell.

Lopez, 34, is at the bottom end of a remarkable economic recovery that is generating jobs, boosting exports and reviving businesses. But it still has a long way to go. "Five years later, it's definitely better," says Lopez, wearing a baseball cap and sweating. "But it's not great."

Today the ranks of the scavengers, or "cartoneros," have thinned as South America's second largest economy rebounds at a blistering pace, growing more than 8 percent year after year.

Lopez now has time to earn extra money baby-sitting, while two brothers idled by the crisis have gone back to low-paying jobs, one in a car wash, the other in a tire repair shop.

It's now rare to see desperate families Dumpster-diving for rotting vegetables, and those classified as poor have gone from more than 50 percent of the population of 37 million to about a third.

Argentina has posted 47 months of uninterrupted growth and has already renegotiated repayment of $100 billion of public debt after the largest default the world has known.

The biggest South American farm nation after Brazil, Argentina exported its way out of the crisis, registering a record $46.5 billion in sales led by soybeans, corn and wheat from the fertile Pampas in 2006.

The Argentine peso was pegged 1-to-1 with the U.S. dollar for more than a decade until the recession and mounting debts sparked a run on banks by depositors in 2001, setting up the currency's freefall.

Today, the government pegs the peso at three to the dollar to boost tourism, exports and construction. The cheap exchange rate also keeps prices lower in dollar terms, and some fixed costs like utility rates remain frozen by the government at 2002 prices.

President Nestor Kirchner, elected in March 2003 after four others were toppled by the crisis in the space of just three weeks, also strong-armed creditors worldwide, forcing them to accept repayment of less than 30 cents on the dollar. And he made early repayment of some $9 billion owed the International Monetary Fund, using tax dollars reaped from the export windfall.

Kirchner is a friend of Venezuelan President Hugo Chavez and the Argentine's election was seen as another win for a resurgent Latin American left. He is heavily favored to win-relection in October if he decides to run.