Once Again, Argentines Feeling on Edge

Strikes, Economic Worries Eating Away at Confidence

BUENOS AIRES -- Today's Argentina is not gripped by crisis. It's gripped by the fear of crisis.

Several strikes by farmers, furious over government policies, have sparked concerns about lasting damage to the economy. Many Argentines have been exchanging their pesos for dollars, forcing the government to dip into its surplus to keep the currency stable. Consumers, told that their government faces a shortage of natural gas, are bracing for blackouts.

It's enough to fundamentally change the character of daily life for a lot of people here, from the swankiest boardrooms to the humblest street corners.

Driving through the streets of this city, taxi driver José Luis Baldini, 60, voices a bleak notion that has become conventional wisdom for many here: Good times never seem to last.

"Argentina is like a kid who makes a really good sand castle at the beach, takes a lot of care in building it just right, then steps on it himself," Baldini said. "Things have been good recently. Now we have to put a question mark on everything."

Argentines have seen much worse than what they're seeing today. In late 2001, the economy here collapsed, plunging millions into poverty. Many here also remember social turmoil that boiled over into military coups at least once each decade from the 1930s to the 1970s. Such memories are fueling the current anxieties, which now have many people asking whether this crisis of confidence could degenerate into the real thing.

An 'Irrational' Face-Off

In a top-floor office in this city's priciest stretch of real estate, Issel Kiperszmid can look out his window and see construction cranes sitting atop another skyscraper rising on the banks of the Rio de la Plata.

With international investors eager to capitalize on Argentina's low prices, business has boomed in the neighborhood in the last couple of years. But Kiperszmid, the president of one of the country's top development firms, Dypsa International, said things have changed in recent weeks. Foreign investors are now playing wait-and-see.

"I think people are shocked, because three months ago there was absolutely no reason why anyone would predict this tragicomedy that is happening now," he said. "It could have been avoided so easily."

For a few years now, some economists have been warning that Argentina's bubble might burst. When inflation began to rise faster than the government wanted to admit, it shook the faith of many of the people who had supported President Néstor Kirchner and his wife and successor, President Cristina Fernández de Kirchner.

In March, Fernández de Kirchner levied a sharp tax increase on soybean and sunflower exports to generate more government income and help control inflation. The farmers protested angrily.

The issue now is about much more than simply taxing agricultural profits -- it's a symbolic battle over the general direction of the country. For the Kirchners and their allies, the tax is an emblem of their spread-the-wealth populist approach to governance, while their opponents view their reluctance to repeal the tax as a distillation of an increasingly authoritarian government. As the issue takes on more meaning, both sides seem less willing to bend.