BUENOS AIRES -- The pedestrian shopping mall along Florida Street in the heart of downtown still glitters, its store windows chock-full of fine leathers and furs. But at night, long after the stores are barred with metal grates, young children come to Florida to pick through the garbage cans for food.
The Recoleta district is still a slice of Paris, with sun-dappled plazas and graceful promenades. But the imperious waiters at the sidewalk cafes now must devote much of their time to shooing away beggars.
The close-in enclave of Palermo Chico is still the city's most exclusive address, home to television stars and millionaires. But a stone's throw away, across a nearby railroad yard, hundreds of families huddle in a shantytown of one-room shacks.
Argentines have long considered their nation a middle-class society and their capital the most elegant and European city this side of the Atlantic. In recent years, however, a decline that began decades ago has accelerated. Argentina now confronts a level of poverty that many find shocking.
A nation that never thought itself part of the Third World has had to face statistics that say otherwise.
An estimated one-third of Argentina's 31 million inhabitants live below the poverty line. About 40 percent live in substandard homes, many without running water or basic sanitation. According to U.N. figures, 18,000 children die each year before reaching their first birthday, most from malnutrition and preventable diseases.
And increasingly, extreme poverty is not a phenomenon of remote areas such as the rural north but of Buenos Aires itself. The capital is ringed by a widening belt of shantytowns, called villas miserias, or "miseryvilles," where the homes are cobbled-together huts and the sewers are open ditches.
President Carlos Menem, whose tough inflation-fighting economic policies have made life even more precarious for the poor, is often criticized for being callous. He and his aides deny that the situation is as critical as the numbers indicate.
"The figures have no relation to reality," Menem told U.S. reporters last month, adding that the existence of a huge "underground" economy makes official statistics on employment and income virtually meaningless.
"I cannot say we are living in paradise," Menem said, "but we are not living in hell."
Around the turn of the century, Argentina was one of the 10 richest countries in the world; now it has fallen out of the top 50, and continues to drop. Buenos Aires built an infrastructure of roads, bridges, subways and port facilities that was once the envy of the Spanish-speaking world; now all are antiquated and crumbling, and the government has no money to replace them.
Debate over when the decline began is almost a cottage industry. But there is general agreement that it accelerated during the past decade, through bouts of inflation and hyperinflation, and that Menem's tight-money policies have made things at least temporarily worse for those at the bottom of the economic scale.
"Yes, the adjustment is hitting the poor like crazy," said Moises Ikonicoff, Menem's secretary of planning. "We will need many years of effort and sacrifice. People will have to reduce their standard of living. This is inevitable."
The respected economic think tank FIEL estimated this month that an average family of four living in a low-rent apartment needs at least 2.28 million australes a month to scrape by -- more than $425 at current exchange rates. But the average construction worker takes home only around 1.66 million australes, FIEL said. An entry-level government worker doesn't even make enough to pay for the apartment, to say nothing of other costs.
After years of providing services such as electricity at cheap, subsidized rates, the government under Menem has increased its utility charges sharply. A family that paid $37 a month for utilities in January now must pay $94 for the same services.
The overall result has been a sharp decline in consumption, which has helped deepen an already-deep recession. Retailers reported recently that sales are down at least 30 percent compared with last year. Supermarkets have seen a drop of at least 20 percent.
The gap between income and expenses also has spurred the growth of the shantytowns, where squatters live rent-free in filthy and crowded conditions.
Most of the shantytowns are miles from the neighborhoods where upscale residents of Buenos Aires live, work and play. But the squatter settlements became the subject of renewed public debate last July when shantytown residents tried to rob a high-ranking provincial official.
Carlos Alvarez, government minister for the province of Buenos Aires, was driving along one of the freeways that radiate like spokes from the city. When he reached the point where the road is flanked by the sprawling shantytowns of Azul and Itati, home to about 50,000 people, men began pelting his car with rocks. It is a common robbery technique, designed to get the motorist to stop so he can then be surrounded and robbed.
The following day, two radio reporters went to the shantytowns to report on what had happened to Alvarez. They were held up at gunpoint and their jackets, watches, billfolds and tape recorders were taken from them.
A bit further out from the city, in a district called Monte Chingolo, is another villa that has no name and no particular notoriety. One recent afternoon it looked like just another dirt-poor, hopeless community of the kind one sees around Sao Paulo, Lima, Santiago -- any of the megalopolises in a continent so stuck in economic malaise that, overall, its people consume 13 percent less than a decade ago.
This particular villa is a triangular patch hemmed in by major thoroughfares and an army compound. Not far away lies a vast, smoldering dump, where men and children squat day and night picking through the detritus in search of the salvageable.
The unnamed villa is home to around 300 families. The more fortunate ones live in two-room dwellings made of brick; others make do with smaller homes pieced together with corrugated metal and cast-off plastic. There is electricity but no sanitation. A stinking ditch runs alongside the meandering footpath that leads from house to house.
Perla Saucedo has lived in the shantytown for 10 years. Her husband works odd jobs and brings home enough for the family to eat, she said, but no more -- right now the family cannot afford clothes, toys for the children, anything not of urgent need. The house is one jumbled room, with a kitchen area in one corner and a bed in another.
On the subject of Menem's government, the family is divided.
"I argue with my husband," Saucedo said. "He says Menem has defrauded us all. I say that we have to wait a while, that in a year you can't do everything. If only we could see some progress, some improvement." A friend who was passing the idle hours with her, Olga Luna, agreed that the situation is bad, but said her family at least can afford to eat. During last year's worst inflationary spiral, she said, they went hungry.
"My 12-year-old son has been lost for two weeks," she said in a voice that betrayed no emotion. "We can't afford to place an ad to try to find him."
Ikonicoff, the planning minister, said that the government's demands of sacrifice by the poor are painful but necessary and that he is surprised there has not been more public protest. He compared today's Argentina, after its years of economic mismanagement and rampant reverse development, to the bombed-out cities of Europe after World War II.
"We are in a postwar era," he said. "The difference is that we were not destroyed by someone else. We destroyed ourselves."