Jose Carlos Villaverde says he never wanted anything more than to work hard-- spending long hours each day in his television shop, forgoing weekends off and vacations--to hoard his earnings and invest them in small properties so that when he reaches age 50 he can "live tranquilly and be in peace with my family."
Now, at 48, after what he says is "a life of working and preparing," Villaverde's hopes for economic security in Argentina have been ruined. "I had apartments in the city, and property in the country. But what happens? The prices become ridiculous, the people don't have money, I have to close my shop, I can't work anymore. I have to sell everything I have just to eat."
And so, Villaverde says, he is taking his wife and three children and "getting out--going somewhere where my work will count for something, where I can live in peace." He has joined the thousands of middle-class Argentines who for months have been lining up in record numbers outside embassies to emigrate. They want to leave behind the economic crisis of a country that long had been at the forefront of Latin American development.
The manifestations of dire problems can now be found in almost every Argentine economic index. Inflation, at 180 percent for wholesale prices, is said to be the highest in the world. Government officials put unemployment at 5 percent, but other analysts, counting underemployment, set the rate at 13 to 16 percent. Industrial production is reported to have dropped 15 percent during the past year and the total economic product by 5 percent.
Businesses have been failing at the rate of six a day, banks at nearly one a week, and the country's woeful currency unit, the peso, has fallen 456 percent in value against the dollar within 11 months.
The disastrous state of the economy has become the principal focus of public opposition to the military government that seized power in 1976. It had pledged to rescue Argentina from the long period of economic stagnation with a conservative, free-market approach similar to that adopted by military rulers in neighboring Chile.
The manifest failure of that policy has dragged the military through a tumultuous year that ended with the ouster of Gen. Roberto Viola as president and vociferous demands all through Argentine society for a return to civilian rule.
The military's experience has shown how difficult it can be to implement the new conservative economics taken up in much of South America when the society is accustomed to a vast state industrial sector and state controls on everything from the exchange rate to the price of meat and potatoes.
The country's new president, Gen. Leopoldo Galtieri, a staunch believer in conservative economics, has now reapplied a free-market program considered even tougher than that first forced on an unwilling country by the armed forces in 1976.
But, with opposition erupting on a large scale to both conservative policy in general and to some of the particular stabilization measures-- including a freeze on the pay of about 4 million state workers and pensioners--politicians and economic observers here are predicting that if the military's new program does not work soon, the free-market philosophy may be renounced in Argentina for a long time.
The political tumult and despairing lines outside emigration offices often are caused by collapse of businesses and layoffs by industry, which is reported to be operating at only 40 percent to 50 percent of capacity.
A relatively underpopulated country of 27 million people, and as large as the United States east of the Mississippi, Argentina is used to inflation and traditionally has enjoyed close to full employment. There are no benefits or services for the approximately 1.5 million persons now out of work. "Half of our factory was laid off," said a middle-aged woman who works in a textile plant outside Buenos Aires. "Many of them are women, and so now they are working as domestics . . . or whatever they can find for a few hours."
Many of those who still have jobs line up in front of opposition union and political party offices to protest two- and three-day weekly suspensions of work at heavy industrial plants and the new wage freeze, imposed at a time when housing and food prices are still rising rapidly.
The opposition politicians, pointing to failing industry and the rise in foreign debt from $5 billion to $32 billion since 1976, are saying Argentina will soon lose all hope of independent economic development if the crisis continues.
"If the general tendencies of the last few years continue for much longer, Argentina will find itself one of the poorer Latin American countris," a local newspaper editorial warned recently.
What has brought on the current economic failure and the gloom accompanying it is variously attributed to the unsuitability of conservative economics in Argentina, incompetent administrators, or the unwillingness of all but a few faithful inside and outside the government to support the past programs.
From the point of view of the military government, whose arguments tend to be supported by the international banking community, the economic program initiated in 1976 failed because it did not go far enough.
The plan launched then by economics minister Jose Martinez de Hoz was meant to remove Argentina from a long period of stagnation and inflation by opening up its marketplace to free competition after decades of state protection and subsidies for industry, and by reducing the massive state sector by selling off some of the hundreds of state companies.
Martinez de Hoz--whose name soon became a rallying byword of the political opposition--did reduce inflation to about 85 percent with selective wage and price controls and by pegging the peso at an artificially high exchange rate, thus reducing the prices of imports and forcing national firms to compete.
At the same time, however, the government had little success in reducing the state's control over its 60 percent of the economy. Not many large firms were offered for sale. Fueled in part by a military arms buildup, the state budget continued to run huge deficits.
Early last year, as foreign competition and triple-digit interest rates began to wipe out businesses and unemployment began to climb, Martinez de Hoz was replaced by Lorenzo Sigaut, who effectively reversed much of Martinez de Hoz's policy. Sigaut tried to bring down interest rates and stimulate industry by devaluing the peso--thus lowering the relative price of domestic goods against imports.
The devaluations were also meant to discourage a wave of speculative dollar-buying that had helped raise interest rates. But each time the peso was devalued, thousands of people rushed to their banks to change pesos into dollars in anticipation of further devaluations. Inflation soared.
The rapidly accelerating crisis led in December to the replacement of both Sigaut and Viola. Now the economics minister is Roberto Alemann, a well-known economist who carried out a stabilization program for a previous civilian government.
Alemann has begun by attacking what he says was the principal cause of both the immediate crisis and the long-term decay of the economy --the state deficit. "The government is overspent--way overspent," Alemann said in an interview. Without the great monetary expansion of the past year, he said, "they would have had a very severe recession still, but very short, and they would have come out of it by now."
The government's new program seeks to halt the issue of new currency for government debts by mid-year. Hence the wage freeze, a new tax on exports--said to be a temporary measure to bring in needed revenue--and major cuts in state spending. Even trims in the military budget are promised.
At the same time, Alemann has at least temporarily slowed the collapse of the peso. The government is attempting to allow the market to determine the currency's worth against the dollar while intervening enough to keep the change gradual.
Alemann says inflation should come down significantly by the middle of the year, when the government should be well on its way toward finishing the tasks it believes Martinez de Hoz left undone. A major study is under way of how to denationalize such key state industries as transportation, steel, and oil, despite what Alemann describes as "lots of hysterics and myths in the past" over such measures.
Choosing to attack inflation rather than recession, Alemann acknowledges that the first effect of his new policy will likely be to deepen the hardships for wage earners and the unemployed.
As a result, even those who believe the government's new approach is necessary have doubts whether it will succeed. "This is exactly what should have been done, but it should have been done six years ago, when people were behind the government," one Argentine businessman said.
Opponents of the free-market approach, meanwhile, who include a united front of the country's five major political parties and some elements within the military, contend that the Alemann program will be a disaster for the same old reasons.
"What they are doing is taking the wealth of the country from the control of the people and turning it over to a small minority," said Mario Campora, a leader of the majority Peronist movement, whose governments created much of the state structures and protections that the military is now trying to dismantle. "And it can't work because no one trusts what they are doing, and an economic policy doesn't work without public confidence."
As an alternative, the parties have issued a separate economic program that is the direct opposite of the military's--wage increases, benefits for the unemployed, and new state incentives for national industry. The program, which appears likely to be followed by a future civilian government, calls for a familiar Argentine formula of developing and protecting national industries and workers' wages first, with inflation a secondary concern.
"This country needs any number of convinced free-market people," said an Argentine analyst. "But they don't have that. The vast majority are still the developmentalists--and it's going to be hard to hold out very long against them.