Argentina's Agony

Looting in Argentina, Argentina's Financial Crisis
Looters in a suburb of Buenos Aires, Dec. 19, 2001 (Photo: AFP).

While others were busy ransacking a multinational chain supermarket here during the recent popular uprising against President Fernando De la Rúa's economic policies, a 20-year-old man stuck his face right into the lens of Buenos Aires' Channel 13 news TV camera and snarled, "Look man, I've got two children, one five, and one two years old and I've been out of work for two years."

Another equally media-conscious pillager made a horrible face and then blurted out: "We're doing this for you, Cavallo. If you'd only listened five months ago this wouldn't have happened." Neither Economy Minister Domingo Cavallo nor President Fernando De la Rúa listened. Both were ousted by unprecedented popular protests sparked by the government's Spartan budget cuts aimed at attempting to pay an unpayable US$135 million foreign debt.

Bare-chested looters pile stolen goods into carts and bags. Desperate slum dwellers fight like dogs to receive food packets thrown from delivery trucks. The owner of a small Chinese grocery store cries inconsolably, "Where are the police? They can't do this to me!" Young men and women hurl stones, bricks, and debris of all kinds at shops. A man happily wheels a stolen freezer in a shopping cart. TV cameras capture it all, beaming images of the chaos into living rooms across Argentina and the world. The images, in turn, feed the chaos here.

Argentina's crisis might perhaps be expressed in the words of a gynecologist here, who muttered: "We've lived through the repression of the dictatorship, the robbery of the Menem administration and now the ineptness of De La Rúa. Who is to blame? We are. What awaits us now only God knows."

The solution is to leave the country. There is no future here.

The anger of a mob is not a rational affair. But there was a heartbreaking logic to one disconsolate father's explanation: "I'm not stealing, I'm just getting food for my family." To the 45 percent of the Argentine population who live beneath the poverty line, or to the 20 percent who are unemployed, to the beggars who line the streets chanting "a coin for the love of God," or, simply, "I'm hungry," this father's explanation would make perfect sense.

And there is much about the current crisis that defies logic. Speaking to reporters on Dec. 14, Peronist leader Eduardo Dualde echoed the question many Argentines are asking: How is it that in Argentina, which produces so much food for export, so many people are hungry?

De la Rúa was not a dictator. He was elected by popular vote two years ago on the promise that he would clean up vice and corruption and bring the country out of recession. Once elected, he spent most of his time "putting out fires," as he himself confessed shortly before being forced to step down. Although heading a coalition of center-left political groups, he confided only in a closed circle of intimates and became increasingly removed from the reality of the people around him.

His inability to see reality—a disease that commonly afflicts Argentine politicians—together with his hard-headed insistence on paying the foreign debt at any cost, led his own supporters to fill the streets on Dec. 19, beating frying pans, honking horns, and shouting "go home!" Earlier that day, a government spokesmen had assured the press that talk of a social uprising was "exaggerated."

In a brief, poker-faced TV address, De la Rúa appealed for order, accusing a violent minority of disturbing the peace, and announcing that he was imposing a state of emergency. The streets began to sound like an enormous outdoor symphony. Housewives, slickly dressed men, workers, and youths all converged in a gigantic protest, at first demanding the resignation of the Economy Minister Cavallo, and then that of the President De la Rua himself.

The response of the police guarding the Presidential Palace enraged the country. Rarely, even under the 1976-82 military dictatorship, had there been so much blood spilled in Buenos Aires' central Plaza de Mayo. 25 people were killed in the ensuing chaos as riot police opened fire on protesters, beat them with clubs, pulled them by the hair, hurled tear gas bombs, and charged after them on horseback. As the warm summer sun filtered through the square's tall palm trees, and the dark smoke of the protesters' bonfires mixed with the tear gas thrown by the police, well-dressed, middle class protesters gave way to brawny youths armed with stones and sling shots, accompanied closely by the Madres de Plaza de Mayo and other human rights activists willing to risk their lives to end the state of emergency.

Many on the front lines of the protests were leftist militants, or piqueteros— protesters from slums who in the past have blocked roads and burned tires to demand food or jobs. But it would be a serious mistake to say they acted without the almost universal support of the population. Mothers applauded as youths shouted "You idiot, shove the state of emergency up your ass!" Others looked for handkerchiefs to wipe the tear gas from their eyes. From more distant street corners, removed from the tear gas and the gunfire, the incessant roar of banging kitchen pans and the drum-like clapping of palms filled downtown Buenos Aires.

Many observers gave some credence to the theory that De la Rúa had fallen into a trap set by the Peronist opposition. Whether or not the theory is true-and it is difficult or impossible to ever know-the ex-president certainly helped to dig his own grave. Instead of rectifying his dogmatic economic austerity program, he became increasingly entwined in it. What was a recession turned into a galloping depression. His popularity fell to an all-time low and in recent by-elections the Peronist opposition won a majority of seats in Congress. Despite these clear signals from the electorate De la Rua insisted on maintaining zero-deficit, reducing salaries for government employees, slashing retirement payments, so that the government could continue to make interest payments on Argentina's debt. The result was a speedier economic contraction at home and the widespread impoverishment of the population.

Despite internal divisions, the Peronists began to exert political pressure. The Supreme Court, stacked with justices appointed by former president Carlos Menem, cleared him of charges that he had profited from the arms smuggling during the 1999 war in the Balkans. More significantly, the weakened De la Rúa administration accepted the nomination of Peronist Ramón Puerta in the Senate as next in line should he die or step down. Soon after, Peronists in the Senate began to talk openly about forcing the president to resign. When the government announced curbs on cash withdrawals, the opposition began rubbing its hands in glee. When looters began ransacking supermarkets, the dam finally broke.

The worst looting began in the province of Buenos Aires, governed by Peronist Carlos Ruckauf. At least three people died when shop owners tried to defend their property in the total absence of police. Later, when the situation got out of hand, a rumor spread that the governor was thinking about deploying the armed forces. Ruckauf later denied the rumor, and, indeed, no soldiers were deployed.

A government has been overthrown. Will the new administration be able to manage the crisis better than De la Rúa? At least it will have more popular support. But it must devalue Argentina's currency will probably need to officially default on debt payments. Curiously enough, even important international finance institutions like the International Monetary Fund (IMF) have come to look favorably on both moves. Very likely, despite its pledges not to do so, the new government will attempt to turn dollar debts into pesos as it devalues the peso by 40 or 50 percent. This will soften the burden on the middle class, although it is likely to make the poor poorer until the economy begins to grow again. Banks and privatized government companies are sure to strongly object to this policy because their assets are in dollars. Many will likely question foreign investors' interest in bringing capital and know-how into a country still economically and socially on the drift.

After an unseemly debate over who should lead, the Argentine congress called on Peronist Rodríguez Saá, then governor of the San Luis province, to lead an interim government until March, when new elections will be held to decide who will finish ex-president De la Rúa's term. Saá's first statements indicate that the interim government will keep the peso pegged to the dollar, default on its debt payments, and use the money thus saved to provide emergency assistance to the roughly 7.4 million Argentines without a job. Saá, a caudillo known for a combination of populist and orthodox economic policies, has managed to govern his province longer than any other provincial leader—although his political opponents also accuse him of dirty dealings and corruption.

In the meantime, Argentines continue to lick their wounds and the future looks dim. Rubén Perez, a technician and actor, put it this way: "The solution is to leave the country. There is no future here."