Appreciating Argentina
It
used to be called the ''Paris of the South'' - and there is no doubt
that Buenos Aires is a beautiful city with a very European feel. To
the outside observer, it does not even appear to be in a developing
country, not least because the resident population is almost completely
dominated by relatively recent European migrants of the past century
and a half. Indeed, Argentina is still much richer and more developed
than most countries in the world, and in Buenos Aires the evidence of
past splendour still dominates in the wide boulevards and imposing classical
architecture that fill the centre of the city.
Yet
the grandeur is a little faded - and perhaps is all the more charming
for that reason, like a newly impoverished dowager holding on graciously
(if a little anxiously) to the signs of previous elegance and prosperity.
For all of its tumultuous recent history, especially in the past half
century, the city seems to be drawn towards a more distant, stylish
past. It is evoked in the spacious central squares, including the famous
Plaza de Mayo; in the wonderful 19th century opera house; in the modish
cafes dotting the landscape around the imposing Recoleta Cemetery where
all the famous people are buried; in the gloriously decadent old tango
halls where young and old people still come to watch, learn and perform
this most disciplined of erotic dances.
Of course there is much more to it, because at another level the city
is another of the huge urban conurbations that are becoming more and
more prevalent in the developing world in the 21st century. While the
central city has around 3 million residents, another 9 million or so
are in greater Buenos Aires, making it a large city even by Latin American
standards. (Of course Sao Paulo in Brazil and Mexico City, with well
above 20 million inhabitants each, are still far ahead.)
In much of this larger city, nostalgia is actually a thing of the past,
as typically 20th century high-rise housing and 21st century malls compete
for attention and Portenos (as the local residents are called) face
the usual preoccupations of contemporary life such as finding and keeping
jobs. Every so often, just to prevent the apparent signs of prosperity
from misleading, it is possible to see groups of adults and children
on the streets engaged in the what is currently the most dynamic urban
informal sector occupation: picking through the garbage bags to find
and take away whatever of the contents can be recycled.
All this is the culmination of a very complex set of volatile and extreme
political and economic changes over the past half century. In Argentina
today, the legacy of Peronism is not much talked about, despite the
fact that it is the Peronist Party which currently rules the government.
Literature and media have ensured that the world remembers the glamour
of Evita and the populist and often perverted machismo of General Juan
Peron as the most significant features of that time. But there is also
a significant economic legacy, which enabled development in the 1940s
and onwards by setting up the industrial base in what was a dominantly
agricultural economy. It also recognised workers' rights in a systematic
way, creating one of the first welfare states of the developing world.
The millitary coup of the 1976 brought in one of the most vicious dictatorships
of the 20th century, brutal and destructive even by Latin American standards.
The ruling junta did not simply destroy all the existing democratic
opposition: it used the most sadistic forms of physical and psychological
torture to drive people out of the country and prevent any new opposition
from emerging. The generals and their cohorts also looted the country,
driving the economy into deep debt which financed their own luxury expenditures
and capital flight. The dramatic debt crisis of Argentina in the 1980s
reflected borrowing which had been mostly misused by the military regime,
very little of which actually translated into productive expenditure.
As in Chile, the transition to democracy in the 1980s was perforce made
on the basis of what has been described by Chilean social theorist Manuel
Riesco as ''a hideous pact''. Effectively, the generals and other perpetrators
of the ghastly crimes of the military period were exonerated from any
possible punishment, and neoliberal economic strategies were maintained
in both countries. The democracies that emerged were therefore necessarily
constrained from putting into place policies that would directly benefit
the people. It did not help that they came into being at a time of economic
crisis, when unsustainable external debt payments combined with domestic
hyper inflation to force all these countries into the standard IMF stabilisation-cum-adjustment
package.
In Argentina, the neoliberal economic policies pursued in the 1990s
made things worse because of the obsession with restricting inflation
and impetus to privatise almost all public assets and service delivery.
A supposedly permanent link of the Argentine peso to the US dollar caused
deflation at the same time that financial liberalisation led to financial
fragility despite the stringent monetary policy.
The resulting financial crisis in 2001 was extreme even by Latin American
standards, with a collapse of the peso and of the domestic credit system
and very deep economic slump, with a 20 per cent fall in GDP in the
subsequent year. Income distribution worsened sharply and poverty rates
doubled within a few months. All this also led to severe political instability
- as the locals put it, history was being doled out by the day. There
were six governments within the space of a few months, complete turmoil
in civil society and the breakdown of banking institutions and other
forces that normally keep capitalism running.
Yet from the wreckage something could and did emerge, and it has created
the basis for one of the more successful economies in Latin America
at the moment. The Peronist government led by Nestor Kirchner has proved
to be both more stable and more quietly progressive than could have
been imagined when he first took over the reins of government.
Kirchner's own background should not be ignored - he and his wife, the
recently elected Senator, were both Monteneros, part of the Resistance
movement against the generals, and many of their friends were among
those who ''disappeared'' to be tortured and killed by the military
regime. His government has emphasised social spending, including unemployment
benefits, and avoided further cuts in basic government expenditure.
The imposition of export taxes (up to 25 per cent of value of export
of primary goods) in early 2002 proved to be a great boon as international
commodity prices have been increasing, agricultural export values have
gone up and contributed more to the government exchequer. There has
also been a revival of the import substituting industries that had collapsed
in the 1990s, and new forms of export, such as software, have emerged.
As a result, the economy has grown by 9 per cent per annum for the last
three years, and the unemployment rate has fallen from 23 per cent in
2002 to less than 14 per cent currently.
A major achievement of the government was the renegotiation - or effective
default - of the Argentine external debt in 2004, whereby international
creditors had to accept a deal that wiped out around 65 per cent of
the face value of the debt. This was managed in the teeth of IMF opposition,
and provides a powerful example to other highly indebted developing
countries. Argentina has also repaid its loan to the IMF ahead of time,
so as to avoid continuous interference in domestic economic policies.
The recent changes in Argentine economy and polity are complex and not
easily categorised, but they are indicative of wider changes taking
place across the subcontinent, pointing to a wider range of progressive
possibilities for people across the developing world.