More on Argentina's ruined middle class

Louis Proyect lnp3 at
Thu Apr 5 15:49:58 MDT 2001

The Washington Post, April 03, 2001, Tuesday, Final Edition

Argentina's Economic Woes Devastate Its Middle Class

Anthony Faiola, Washington Post Foreign Service


In a dusty colonial quarter of south Buenos Aires, Eduardo Medina takes a
deep breath before lifting the receiver of a public phone for a weekly call
to his elderly parents in the countryside. Then the 38-year-old unemployed
law clerk starts to lie.

He lies about the new job he never found, the one in a posh downtown law
office that does not exist. About the apartment he no longer has. He says
anything but the truth: that he has found himself reduced to living in a
dingy, overcrowded homeless shelter.

"The truth would kill them," said Medina, still dressed impeccably in a
woolen sweater and preppy pinstriped shirt five months after moving to the
municipal shelter filled with the economic refugees of the world's
10th-largest metropolis.

The truth is that Medina lost his $ 2,500-a-month job at the Justice
Ministry during government layoffs in 1999. And that six months ago he lost
a part-time job as a waiter. And that he faced eviction from his apartment
across town before resorting to the shelter to keep a roof over his head.

"If I tell my parents, it would force me to accept it as well," he said.
"I've told myself this is just a brief setback. But then I look at the
other guys here, and I wonder if I'm not lying to myself, too."

Medina's story is emblematic of a tide of homelessness sweeping Latin
America's showcase city. Massive unemployment from a 33-month recession and
large-scale downsizings during a decade of U.S.-backed free market reforms
have wreaked havoc on the lives of residents here, especially as the once
large middle class tumbles down the ladder of prosperity.

Although its grand boulevards and belle epoque neighborhoods have long
given Buenos Aires pretensions as "the Paris of Latin America," the city
today recalls New York during the Great Depression. The number of indigents
in greater Buenos Aires -- the poorest of the poor who live on less than a
$ 1.60 a day in a metropolitan area of 12 million people -- rose to 921,000
people in 2000 from 324,810 in 1991, the year then-President Carlos Menem
embraced the free market reforms that swept across much of Latin America in
the 1990s.

"We have never had to cope with a homeless population this large and
diverse before," said Silvia Coralini, head of the city's Program for
Families in Crisis, begun in 1997 to deal with the swelling tide. "And it's
not like you can just go tell these people to get up and find a job. There
are no jobs."

Two government surveys on the homeless -- taken in 1997 and 2000 -- show
the population living in city shelters or on the streets has almost doubled
in three years, to 5,718 from 3,172 within city boundaries, where 3 million
live. Aid groups place the actual figure far higher, arguing that the
government does not count people living in shantytowns called "misery

At the same time, thousands of "afternoon homeless" pour into the city each
day on boxcars attached to commuter trains from poor suburbs and the
Argentine interior. Most stay on the streets for a few nights, some
standing in employment lines that snake for blocks. Others come to scour
trash cans in search of aluminum cans and discarded morsels.

The genteel middle-class neighborhoods that were the city's heart and soul
-- and which long separated Buenos Aires from most other Latin American
capitals, where islands of wealth sit among seas of poverty -- are rapidly
being transformed into pockets of dilapidated buildings, empty storefronts,
rising crime and beggars. Meanwhile, the very rich have retreated to gated
communities, exiting for work in high-rise office buildings and shopping in
designer boutiques in upscale parts of town.

In other words, Buenos Aires is starting to look like the rest of Latin
America. This is taking a toll on the psyche of a city that has always
fancied itself a First World enclave in the developing world.

"We are facing a social breakdown in Argentina, and though we are trying to
cope with the problem, Buenos Aires is reflecting the national crisis,"
said Daniel Figueroa, the city's secretary of social services. "The middle
class is slipping badly, sometimes slipping straight to the bottom. Buenos
Aires has become like a boat taking on water. We are helping as many
homeless as we can, but there are more and more. We keep on bailing, but
the boat is sinking."

Argentina, a nation of 36 million, has suddenly become the new focus of
Wall Street jitters following the financial meltdown in Turkey. As a
result, President Fernando de la Rua is being pressured to cut the deficit
by slashing expenses. At the same time, foreign creditors are encouraging
Argentina to embrace reforms even more, privatizing some of the last
remaining state-run institutions.

The 1991 reforms at first helped stabilize the economy, eliminating runaway
inflation and generating growth spurts. They also sparked badly needed
modernization, eliminating most government dinosaurs and making utilities
such as telephone and electricity service more efficient. But privatization
and the collapse of local businesses unable to compete in a globalized
marketplace have kept unemployment above 15 percent for almost a decade.
Underemployment has hovered between 40 and 50 percent.

Many here blame what they call U.S.-style "Darwinian economics." But others
contend that it is Argentina, and not the reforms, that is to blame. For
some economists, this nation has become a case study on how the benefits of
the free market can veer off course because of corruption, weak government
and a failure to overhaul labor laws and enforce tax collection on the rich.

Whatever the reason, the effect on Buenos Aires has been severe.

Hector Aguilera, 40, leaned on a metal cane as he limped to the back of the
Monteagudo homeless shelter in a downwardly mobile middle-class
neighborhood. Aguilera, formerly a phone company worker, was transferred to
a subcontractor in 1994, a job that did not offer health benefits.

His bone cancer was diagnosed in 1998. By then, the public health system in
the city was so overwhelmed that Aguilera feared his sickness would advance
while he sat on waiting lists for treatment. He spent his $ 35,000 savings
on chemotherapy at a private hospital, becoming so ill during the treatment
that he lost his job.

Aguilera was evicted from his three-room apartment in 1999. He moved into a
boarding house, supporting himself on borrowed money and odd jobs until
last year.

"I'm 40 years old and defeated," he said. "You try applying for a job in
Buenos Aires these days with a bald head and a limp from cancer. You don't
get very far."

Homelessness is not a new problem here. Even 80 years ago, when Argentina
was one the world's 10 richest nations, homeless people dotted the
expanding industrial cityscape.

But today, the homeless population is not only at historic highs, but the
profile of the homeless has substantially changed. Once more likely to be a
population of alcoholics and the mentally ill, the homeless now are more
likely to be well-educated, middle-class and moderately poor individuals
and families. Most have employment problems or have fallen through the
cracks of the social system, government officials and homeless advocates say.

Alejandro Arrieta, a well-groomed, soft-spoken 62-year-old, was laid off as
a telephone operator at the Buenos Aires Children's Hospital during a wave
of cutbacks in 1993. He lost his family home in an upscale neighborhood to
creditors in 1999. He had hoped to receive his government pension of $ 350
a month by then to help pay his bills. But a year earlier, the government
extended the benefits age to 65 in an attempt to reduce its deficit.

On the day the creditors came to auction his apartment and belongings,
Arrieta packed a black plastic bag with dog-eared photographs of his
parents, who had bought the place in the 1940s. He slipped down the stairs,
said a quiet goodbye to the doorman and lived on the streets for the next

Eleven months ago, he was picked up by authorities, interviewed and taken
to a homeless shelter. Like so many others here, he is receiving
psychological counseling after falling so far, so fast.

Traditionally, individuals and families in dire need would have been
supported by extended families. But the economic situation has become so
tight that siblings, parents, aunts and uncles find it difficult to take in
unemployed relatives.

Monica Noemi Laveglia, 34, lives in a city shelter for families with her
husband, Jorge, and their two children. They moved in with her mother when
her husband lost his job at a pie factory that closed in 1991.

The arrangement lasted for two years, but the financial and personal strain
on her mother forced them to move into a cheap hotel in 1998. The $ 200
rent proved too much for the $ 275 monthly salary her husband earned
driving a taxi 16 hours a day, forcing the family into the shelter last

Louis Proyect
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