NY Times: clueless on Argentina

Louis Proyect lnp3 at SPAMpanix.com
Fri Nov 24 09:31:43 MST 2000



NY Times, November 24, 2000

With No Hope for Economy, Many Argentines Are Leaving

By CLIFFORD KRAUSS

BUENOS AIRES, Nov. 19 — Half a century or more ago they came here by the
hundreds of thousands. They were immigrants lured from Italy, Spain and
other European countries by a vast new land that symbolized hope and
offered dreams of boundless pampas graced by fat grazing cattle, and of
cities with bustling factories and lively tango clubs.

Now many of their descendants, worn down and shorn of that optimism, are
thinking about going back.

This year, thousands of young Argentines of Italian descent have lined up
at the Italian Consulate in downtown Buenos Aires seeking passports to
return to the place once left behind by their ancestors.

In the first six months of this year, the Italian Embassy here gave
Argentines 7,000 passports, the same number as in all of 1999. And the
lines for visas at the Spanish and United States Embassies are getting
longer all the time.

"I don't see the same future that my grandparents saw when they came here
after World War II," said Estanislao Hernández, a 20-year-old accountancy
student at the University of Buenos Aires. "There is no work. Politicians
are corrupt and can't manage the economy. Worse still, you can't walk the
streets anymore without getting assaulted."

The preparations for a reverse tide underscore the foul mood and collapsed
hopes here in Argentina. Psychologists say their patients are growing
increasingly anxious over job uncertainty and the rise of cutthroat
competitiveness in the office. Waiting lists for appointments at public
mental health clinics are climbing, as incidents of suicide, drug addiction
and family violence rise. Church attendance is up.

When Argentines worry, they stop buying. Apartment prices have dropped by
10 percent in Buenos Aires in the last year, as sales in shopping centers
have been reduced by 14 percent. Anxious consumers are buying less shaving
cream and shampoo, washing their hair and softening their whiskers with
soap instead, according to recent market surveys. Sales of cars and other
durable goods are down, depressing the manufacturing sector.

Farmers are leaving large tracts of land fallow, believing that world
commodity prices will not revive anytime soon.

Many economists say such behavior is only natural in times of economic
stress, as unemployment has edged up from an already high 14 percent at the
end of last year to nearly 16 percent today. The economy this year is
projected to grow by at most 1 percent, after dipping 3 percent last year,
in a performance well behind that of neighboring Brazil and Chile.

Government officials and some business executives are beginning to say this
funk is self-fulfilling, and they blame it for the country's inability to
recover from its deep two-year- old recession. With foreign trade a mere 9
percent of the economy, these experts note, Argentina depends on the
spending of its own consumers to grow.

"We are in a trap of pessimism that is stopping the economy," said Eduardo
Elsztain, chairman of IRSA and Cresud, the country's largest real estate
and farm companies.

In a recent speech trying to rally public opinion to support his economic
policies, President Fernando de la Rúa spoke of the crisis of confidence as
a product of "adolescent hysteria."

Thomas Reichmann, a senior official at the International Monetary Fund, was
recently quoted in an I.M.F. publication as characterizing Argentina as a
country that is "totally unable to lift the sentiment of its own people."
"That is something that in my tool kit," he added. "We don't know how to
deal with that kind of social psychology."

A nationwide survey of 1,303 people conducted by Mora y Araujo Asociados
last month showed that 32 percent of the population believes that they will
be worse off in a year than they are today, compared with 19 percent who
believe things will get better for them. The finding was almost exactly the
opposite found by the same polling group only six months ago.

"The future looks very grim," Cecilia Desimo, 57, a housewife in northern
Jujuy Province, said the other day. She added that her husband, a worker in
a sugar factory, had not been paid in two months because his company is
going bankrupt.

Mrs. Desimo was standing among a hundred protesters blocking a major
highway leading into the city of San Pedro. They were burning tires while
listening to doleful tango cassette tapes, and they demanded that the
government nationalize the La Esperanza sugar plant.

"My family has given up beef for cheese and bread, and my children have to
leave high school to find work to help our family survive," she added.

Roadblocks by unhappy farmers and unemployed workers have sprung up around
Argentina in recent weeks and may yet have a serious impact on the economy.

"From what I see on television, everything is bad," said Daniel Salvador
Gutiérrez, an 18-year-old field hand at a dairy farm in Los Noque, a
village in the northern province of Salta. "The politicians promise the
world, then don't do anything."

Polls show that the pessimism ranges across class and age lines. But the
sector of the society that feels most negative, according to the recent
Mora y Araujo poll, is the lower middle class.

"Historically, Argentina has been a country in which every generation
believed that the next would be better off than the last," noted Graciela
Romer, a leading political consultant. "But the middle class is now
suddenly faced with great limitations. That is creating a general sense of
dissatisfaction and pessimism."

There is plenty of self-criticism, and recent interviews with dozens of
people around the country reflected a broad sense that Argentina is a
nation that somehow has never been able to fulfill its potential. Many
older Argentines said the optimism they felt when civilians replaced the
military government in 1983 has long since wilted, and some even talk
longingly of a return to authoritarianism.

Spirits picked up at the end of last year with Mr. de la Rúa's landslide
election, after he promised to create jobs and end the corruption of the
previous government of Carlos Saúl Menem. But President de la Rúa's poll
numbers have since plunged — 72 percent registered their disapproval of the
president in one recent survey — especially after a Senate bribery scandal
led to the resignation of his vice president and a shake- up of the cabinet
last month.

The general anguish seems strange in a country with the region's highest
rates of literacy and life expectancy. But cheap Brazilian imports are
flooding local markets and Bolivian and Peruvian laborers are migrating
here and taking jobs away from Argentines.

"It's a rich country, but we just don't know how to exploit it," said Jorge
Oscar Fillia, 55, a shoe factory worker who lives just outside Buenos
Aires. In recent months Mr. Fillia's factory has come under enormous
pressure because it is unable to compete with Brazilian footwear, and so
his employers have cut his salary but made up some of the difference by
paying him in shoes.

"I used to go to the movies and buy a pizza on Friday night, but now I
can't even afford to go to the corner," said Mr. Fillia, who, in typical
Argentine fashion, still manages to project a sense of well-being by
wearing an ascot and knit beret.

Short on money, Mr. Fillia takes shoes from his factory and takes them to a
barter market known as a trueque club in the town of Bernal, 15 miles south
of Buenos Aires, where he exchanges the footwear for everything from bread
to laundry service.

"If the country was in good shape, I wouldn't be standing on this line,"
Lucia Sastre, 51, a public health clinic administrator who lost her job two
years ago, said as she waited for the trueque club to open its doors so she
could sell her homemade meat pies. "We have so much land, so many minerals,
so much of everything, and yet we are going down, down, down."


Louis Proyect
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