It is the 10th anniversary of the 2001 financial crisis in Argentina and we managed to get some of the best books and documentaries gathered in this financial crisis material round up to make you an expert on the subject. Check it out!

Documentaries:

‘Memoria del saqueo’

This documentary creates a timeline between the military dictatorship of 1976 until the beginning of the protesting in December 2001.

It reports 25 years of economic, financial and social problems because of the countries exorbitant debt as well political and financial corruption in government sectors.

This documentary is a complaint of the plundering of resources by multinational corporations with the complicity of the national government.

According to the director Pino Solanas, little has changed in Argentina since 2003: “the looting goes on.”

Director: Pino Solanas. Countries: Argentina/France/ Switzerland. Duration: 120 minutes. Year: 2004. Language: English and Spanish

‘The Take’

In the beginning of the Argentine economic collapse of 2001, former employees of the newly shut Forja plant in a suburban area of Buenos Aires, take over the factory as a part of a new movement that encourages workers to occupy bankrupt businesses to create jobs in an attempt to recuperate their means of living.

Locking themselves inside and with no bosses, 30 former auto-parts workers start running the once silenced factory and refuse to leave.

This act has the power to shake the basis of the whole globalization debate.

The president of the new worker’s co-operative, Freddy, and the head of the Movement of Recovered Companies, Lalo, know that their struggle is only beginning. Having to face a bureaucratic rampage amongst going to courts, dealing with cops and politicians, they know their success is far from secure. Their future is uncertain: they can either be granted legal protection or be evicted from the factory.

The presidential elections sets the background, having Carlos Menem – known as the main responsible for the crisis – as the front-runner. Menem’s supporters are the factory owners, who will get the factories back from the workers if their candidate wins.

Now the workers have to fight their bosses, the bankers and the whole economic system that do not really care about all the lives they affect by shutting down plants.

Directors: Avi Lewis and Naomi Klein. Country: Argentina/ Canada. Duration: 87 minutes. Year: 2004. Language: English and Spanish

‘The Argentina Experiment’

Greek documentary film maker Yorgos Avgeropoulos was living and working in Argentina between 2001 and 2002, during the crisis. He now returns to the country to re-examine the economic, political and social situation of Argentina and how it is handling the consequences of the collapse it faced ten years ago.

The documentary  creates a parallel of what happened in December 2001 and what is happening now in Argentina ten years later.

According to the documentary, the ending of the neoliberal economic model in Argentine economic calamity of 2001 left 39 people dead – murdered by the police and bank securities – 30,000 collateral damages (suicides, heart attacks and strokes) and over 50% of the population submerged in poverty and misery.

Director: Yorgos Avgeropoulos. Country: Argentina. Duration: 100 minutes. Year: 2010-2011. Language: English, Spanish and Greek

Books:

‘Broken Promises? – The Argentine Crisis and Argentine Democracy’

Editors Edward Epstein and David Pion-Berlin have brought together an impressive group of Argentine and American experts to contribute to in this book. This is considered to be the first comprehensive account of the 2001 Argentine economic collapse.

The book shows insights of the role of the police and the military, as well as the analysis of the behaviour of the population and politicians as the economic crisis develops.

It also portrays the Argentina emerging from the crisis and the complexities of contemporary Argentine democracy.

Editors: Edward Epstein and David Pion-Berlin, 296 pages. Publisher: Lexington Books. First edition: March 2008. Language: English

‘History of The Argentine Crisis’

According to author Mauricio Rojas, “there are countries which are rich and countries which are poor. And there are poor countries, which are growing rich. And there is Argentina.”

Rojas’ book explains in a summary the journey and the reasons that lead Argentina to its economic and financial crisis in 2001.  The text is written in a simple and accessible manner, perfect for the lay in Argentine politics or the ones that want to understand the crisis but not in depth.

Explaining the Argentine golden age between 1860 and 1930, which the country growth increased astonishingly, there came 70 years of stagnation as well as political, economical and especially social issues.

It sets the scene for the beginning of the 20^th century, when the country was richer than France, Italy and Sweden and its long and hard fall into bankruptcy.

The book also talks about the Perón years and its importance to Argentina, besides all the corruption, populism, nationalism and protectionism.

After years of inflation, aborted reforms, regional conflicts and political scandals, the country finds itself in a delicate political and financial situation.

Originally published in Swedish and later translated to English, Spanish and Portuguese, this book is highly recommended if you want to read a short but profound text to understand how such a powerful and country fell into financial failure.

Author: Mauricio Rojas, 130 pages. Publisher Cadal / Timbro. First edition: December 2003. Language: English, Swedish, Spanish and Portuguese

‘The Crisis of Argentine Capitalism’

Author Paul H. Lewis begins his book describing the development of the Argentine industry, emphasizing the period after World War II, in which Argentina had become the most industrialized nation in Latin America.

Lewis considered Perón and his military colleagues responsible for the end of the evolution of Argentine economy aiming dynamic capitalism.

He also describes the political disputes amongst peronists and anti-peronists between the years of 1955 to 1987 and points out how the post-Perón governments failed to incorporate the trade union movement in their list of priorities, causing – amongst other things – economic stagnation and an increase on the levels of violence.

This book is ideal for people who want a deep study on the roots of the Argentine instability and decline in the times before the crisis – or how Lewis calls “the politics of political stagnation” -, as it describes Argentina’s entrepreneurial classes in relation to foreign capital, labour, the government and the military.

It also differs from previous studies because it does not focus on parties or governmental institutions, but in pressure groups and their organization, development and political activities.

Author: Paul H. Lewis. 594 pages, Publisher: The University of North Carolina Press. First edition: February 1992. Language: English

‘And the money came rolling in (and out)’

Author Paul Blustein managed to expose in his book the flaws of the financial system worldwide and shows Argentina’s efforts in the 90s to become one of the developed countries – even being praised by the IMF, the World Bank and Wall Street.

Blustein – who also wrote a book about the IMF called “The Chastening”- gathered in “And the money came rolling in (and out)” hundreds of interviews with politicians, economists, stock market investors as well as parts of internal documents showing how the IMF ignored the vulnerabilities in the Argentine economic policy.

The narrative of the rise and fall of Argentine economy is very clear and makes the reading flow, being considered by many top publications such as The Economist and New York Sun to be a “page-turner”.

Author: Paul Blumstein. 304 pages, Publisher: PublicAffairs. First Edition: March 2005. Language: English

Eduardo Duhalde as President in 2002 (from Wikipedia)

Eduardo Duhalde was Argentina’s fifth president in the space of a fortnight when he was appointed by the Legislative Assembly on 2nd January 2002 to see through the remainder of Fernando De la Rúa’s term.

During the uprising of the 19th and 20th December, people had died while delivering a message to the country’s political leaders: “que se vayan todos” (“get out, all of you”). Yet Duhalde was no newcomer. He had played a leading role in the political scene in the 1990′s first as Carlos Menem’s vicepresident and then as the powerful governor of Buenos Aires province, the country’s most important and one of the worst affected by the policies of that decade.

It was not a promising start to the new era that was demanded by a public that had lost all faith in politics and politicians, after decades of helplessly seeing their living standards deteriorate under the yoke of the “new world order” that was imposed on them. Protests were frequent in the first few months of Duhalde’s term, as the social costs of the recession and devaluation reached their peak, but with strong party support, he survived the early transition.

However, Duhalde’s presidency -and his aspirations to run for a full term in elections scheduled for October 2003- was cut short as the worst example of the old politics soon resurfaced. On the 26th June 2002, a piquetero protest was violently suppressed and two protesters, Maximiliano Kosteki and Darío Santillán, died at the hands of the Buenos Aires police (also known as the ‘maldita policía‘), one of the most conspicuous symbols of corruption and decadence of the previous decade.

The elections were moved forward to April 2003. The five main candidates were again made up of familiar faces, including former peronist presidents Carlos Menem and Adolfo Rodríguez Saa (in office for one week in December 2001), and two dissidents from the devastated UCR party, Elisa Carrió and Ricardo López Murphy.

The fifth candidate—Duhalde’s choice—was Néstor Kirchner, a little known peronist governor from the southern province of Santa Cruz, who came second with 22% of the vote. Although he faced a run-off with Menem, the ex president, anticipating a heavy defeat, withdrew from the race leaving Kirchner to take office on the 25th May 2003. The age of kirchnerismo began, a model initially developed under Kirchner and still evolving eight years on as his wife Cristina Fernández de Kirchner begins her second term.

Kirchner takes charge in Congress in 2007. (from Wikipedia)

A New Era of Politics?

Few people would question the fact that the arrival of Kirchner marked a turning point in the country’s political history. But how much of the spirit of 2001 lived on in this new political scene? Is kirchnerism a direct consequence of 2001? Did they all “go away”, as demanded?

As president, Kirchner was quick to differentiate himself from his predecessors by attacking some of the more evident symbols of the “old politics”. Despite some initial doubts regarding his capacity to take the reins of the country (La Nación published an editorial comment before he took office stating: “Argentina has decided to give itself a government for a year”), the president showed his strong leadership style by confronting powerful corporations and corrupt institutions. One of his first measures was to reform the Supreme Court and to replace some of its judges -who were accused of corruption- with prestigious jurists. He also took on the military, and in 2003 Congress annulled the so-called “impunity laws” that had pardoned officers from the last dictatorship for its crimes against humanity.

At the same time, in terms of the party political system, changes were minimal. In the midst of the crisis, the demands of the mobilised masses were transmitted in the formation of the so-called “popular assemblies”, groups of residents, overwhelmingly in Buenos Aires and its surrounding suburbs, coming together to practice grass-roots politics. However, these only lasted for a few months as they were unable to institutionalise themselves and produce the policy programme and leadership necessary to survive in the long term and to aspire to obtain political power. The dominance of the traditional parties, and especially of peronism, of which kirchnerism is an offshoot, was never truly challenged.

Since 1983, Argentina has had a national two-party system dominated by the Justicialist and Radical parties (PJ and UCR, respectively). The national prevalence of these parties has never been called into question, although smaller third parties have emerged from time to time. A few of these were, and still are, confined to specific provinces and some of them have become powerful in their own districts, often winning provincial elections (the classic example is the Movimiento Popular Neuquino in the province of Neuquén). Some of them have attempted to transcend those limits and become viable options at the national level (the more succesful of these has been FREPASO who got to power in an alliance with the UCR in 1999). More recently, the centre-right PRO and Socialist party have been successful in Buenos Aires and Santa Fe respectively, but they tend to lack the territorial strength and ability to expand geographically without resorting to alliances with one of the “big two”.

Indeed, both peronism and radicalism have extensive political networks and localised grass-roots activist groups built over decades of political activity and relations of patronage, which are the base of their power. In the case of peronism, this set-up tends to strengthen the power of the governors, thus explaining the prevalence, to this day, of conservative caudillos in many provinces, which hinder the emergence of renewed leaderships.

As political scientist Andrés Malamud, one of the authors of the recently released book ‘La política en tiempos de los Kirchner‘ (‘Politics in the Kirchners’ years’, Eudeba) points out, rather than weakening this structure, the kirchnerist years have produced a “recharged two-party system”. The electoral reform introduced by President Fernández in 2009 will likely deepen this bipartisanship.

President Cristina Fernández de Kirchner in 2010. (from Wikipedia)

The Memory of 2001

Political institutions are only part of the picture, however, and even though it is clear that they have not all “gone away” as the people demanded, it cannot be denied that the political culture in the last decade has simply not been the same as in previous decades.

Both in speech and in action, the Kirchners have put politics back on the agenda. The authoritative central role regained by the state, after being relegated by “the market” for too long, is a testament to this.

The neoliberal ideology that dominated in Argentina for 25 years is not only an economic policy, but a way to understand and to exercise politics. It proposes technocratic governments whose job it is to apply objectively formulated policies, leaving no room for debate and denying the conflicting nature of politics -and therefore, politics itself. The crisis of 2001 in Argentina showed that the supposed objectivity and neutrality of neoliberalism was false and that, after 25 years, there were clear winners and losers.

Kirchnerism, on the other hand, has based its political style and rhetoric around the notion of conflict. By doing this, it has recovered some traditional peronist forms of discourse, such as the building of an adversary, and an “us and them” dynamic. Much of this style borrows from the concept of “agonistic democracy”, a way of understanding democracy as an expression of dissenting points of view, whilst accepting that an absolute consensus is impossible to achieve. In this view, the main aim of the democratic system is to channel the hegemonic struggles within society -in order to avoid them being expressed through violent means- but without denying them.

Whilst some find this political style aggressive and violent, recovering the notion of conflict has given public debate a renewed vigour. Many political, economic and social debates which were unthinkable a decade ago have been put on the public agenda. These include the role of the state, the role of the corporations (economic and otherwise), minority rights, sexual, reproductive and gender issues, the role of the media, the country’s insertion in the global system, to name a few. Politics has been brought back to the centre of the stage -and that can only be good for democracy.

2001 also marked a generational change. The devastation brought about by the military dictatorship amongst the politically-engaged youth produced what is usually called “a lost generation” amongst those who came of age in the 1980s and 1990s. The social discipline imposed by economic hardship did the rest. The last decade, however, has seen the development of the generation who witnessed first hand, in 2001, the power of a mobilised society. While the continuity in the insititutional conditions means that this did not necessarily translate into the creation of new political parties, there is a new generation making its way from within the traditional political identities and through alternative social movements.

This engaged generation is arguably the most important legacy of the 2001 crisis, and a powerful constraint on the activities of the political class, as evident in the kirchnerist policy not to suppress political protests with force. In the last year, President Fernández has given a rising importance to the notion of generational change, both in her speeches and in her actions. The increasing influence of peronist youth group La Cámpora is probably the best example of how the new generations are being integrated into politics.

Traumatic events can often be cathartic and open the way to new and -sometimes- better things. They always leave traces in those who suffer them. The 2001 crisis became one of the most important events in the last few decades, in a country with an already turbulent history. We are only now beginning to see the mid-term effects of the crisis on the political system, and must not forget that deep, structural changes can take many years to manifest. Even though many negative aspects of everyday political practices have not been resolved, the capacity of the democratic system to adapt and to survive the 2001 crisis – something that would have been much less likely a few decades ago – is a good sign of maturity for a relatively young democracy.

When President Fernando De la Rúa was forced out of office on 20th December, 2001, Argentina was already deep in the worst economic, social and political crisis of its history. In the weeks that followed, the country defaulted on US$140bn of debt and devalued the currency by more than 300%, both global records at the time.

The magnitude of the collapse, and its devastating  consequences, took many by surprise, even though (and largely because) pressures had been building for years. In reality, the 2001 crisis was the ugly, mismanaged withdrawal from a decade of ‘convertibility’, where one peso equals one dollar, and the breaking point of an economic cycle that had begun in 1976 under military rule.

A New Economic Paradigm

José Martínez de Hoz as economy minister (1976-81)

For all the ghastly human rights abuses committed by the 1976-83 military dictatorship, it was its economic policies that would have a greater lasting impact on the country once democracy was restored.

On 2nd April 1976, just over a week after the military coup, newly appointed economy minister José Martínez de Hoz, launched a deep restructuring of the economy, based on the principles of neo-liberalism. In his landmark speech that day, he announced a fundamental move “from stifling state intervention to make way for the liberalisation of productive forces.”

In a short space of time, wages were frozen and new labour laws (in favour of companies) were introduced, the banking sector was deregulated, and obstacles to international trade and investment flows were eliminated. Decades of industrialisation were wiped away as domestic producers, for so long protected by the state, could not cope with the flood of cheap imports.

In the new economic reality, where borrowing was easy and financial speculation could reap big short-term rewards, there was little incentive to invest in long-term production.

It became known the era of plata dulce (sweet money) and deme dos (give me two), as those who benefited in the new model—typically large private companies and influential individuals with close links to the military regime—enjoyed a sharp rise in living standards. But as wealth and power became highly concentrated, many other social indicators declined dramatically. Real wages slumped by 40%, while unemployment, poverty, and child mortality, areas in which Argentina had long been an example for Latin America, all rose dramatically.

Just one year into the dictatorship, acclaimed writer and journalist Rodolfo Walsh wrote in his famous open letter to the military junta: “the economic policy of this government, rather than a justification for its crimes, is a greater atrocity that punishes millions of human lives with its planned misery.”

The Burden of Debt

Despite Martínez de Hoz’ pledge to reduce state involvement in the economy under the slogan “to minimise the state is to maximise the nation,” government spending remained high, focused primarily on infrastructure, defence and security. As finance for this expenditure, the country’s external debt rose from US$8bn in 1976 to over US$43bn by the time democracy was restored seven years later. A significant part of that increase was absorbed by the state after a decision by the Central Bank, in late 1982, to nationalise the debt of stricken banks and companies.

At the same time, the global era of cheap borrowing and petrodollar recycling was coming to an end, and as interest rates rose, Argentina, along with many other developing countries, was burdened with external debt and interest payments that it could barely afford.

From that point, international creditors—represented by the IMF—would exert a major influence on domestic policy, often demanding measures that ran contrary to the needs of the majority of the local population. In the most explicit demonstration of this problem, Bernardo Grinspun, the flamboyant economy minister from 1983-1985 who tried to take a hard line with foreign creditors, once declared to the head of the IMF’s mission in Buenos Aires: “If you want me to pull down my trousers, I will!” and proceeded to turn around and do just that.

By the time Domingo Cavallo was appointed economy minister in 1991, external debt had swelled to US$61.3bn and the government owed almost US$3bn a year in interest payments alone. Cavallo had experience with this debt: as president of the central bank for a short period in 1982, he played an important part in the nationalisation of corporate obligations. Now under the presidency of Carlos Menem, he embraced the so-called ‘Washington Consensus’—a standardised economic package prescribed for indebted developing countries by the IMF and World Bank—and embarked on a new phase of neo-liberal reforms that Martínez de Hoz would later claim went far beyond his own.

Domingo Cavallo launches convertibility in 1991

Convertibility

Alongside a another wave of deregulation, trade liberalisation and privatisations, one of Cavallo’s first and most important policies was to peg the Argentine peso at 1:1 to the US dollar, and make both currencies legal tender. The ‘convertibility law’ was brought in to combat another of Argentina’s constant economic ills: inflation. Many previous administrations—both democratic and military—had resorted to printing money to finance its spending programmes and cover budget deficits. By stipulating that every peso in circulation had to be matched by a US dollar in the central bank’s reserves, the government effectively tied its own hands in order to make the currency peg credible.

Inflation did fall in the first years under convertibility, and a new influx of investment from abroad helped spur a period of economic growth between 1991 and 1994. But the benefits were once again enjoyed disproportionately by a small section of the population, whose prosperity masked growing structural problems. Local industry was once again decimated by foreign competition, and the number of unemployed and those living in poverty rose to historically high levels.

Unable to print more money under the terms of convertibility, the government borrowed heavily to finance its budget deficits, which increased as economic activity waned and joblessness rose. To cover interest payments that were due, the government hurried through its privatisation programme, selling key strategic industries, including oil company YPF, at suspiciously low prices and often directly to those creditors awaiting payment. External debt soared, almost doubling to US$110bn by the time Cavallo resigned in 1996 amid growing reports of corruption in the Menem administration. His successor, Roque Fernández, continued the deepen the model, ignoring the economic downturn and adding another US$35bn to the debt pile during his three years at the economy ministry.

Endless Recession

By the end of Menem’s term in 1999, a series of financial crises and currency devaluations in emerging markets, including Argentina’s neighbour and main trading partner Brazil, had tipped the country into a recession from which it would not emerge until 2003.

At that point it was clear, to some at least, that Argentina could not sustain the convertibility model and pay off its debt. Investors, banks, and large businesses began moving money out of the country, and financial markets punished the country’s high risk profile with exorbitant interest rates that made it almost impossible to borrow more.

IMF headquarters in Washington D.C.

Despite these warnings, Fernando De la Rúa won the 1999 elections using the slogan “conmigo, un peso, un dólar”(with me, one peso, one dollar) and, despite generating strong expectations for change, stood by convertibility. The public support for the currency peg, which had become a straight jacket for policymakers, is now put down to fears of a return to inflation and belief that it was the rampant corruption in the Menem government that was to blame for the country’s social problems.

De la Rúa’s support quickly faded, however, after his government approved major tax increases (impuestazo) to try and reign in the budget deficit, and was then rocked by a political scandal over the alleged use of bribes in Congress to pass a controversial package of labour reforms (Ley Banelco). By the end of 2000, De la Rúa’s approval rating had plummeted, his vice-president had resigned, and his own Radical party was distancing itself from him.

Still, the IMF, which had held Argentina up as the poster child for economic reforms during the 1990s, gave its support as lender of last resort, rewarding the government for the impuestazo and Ley Banelco by agreeing a US$40bn credit line—el blindaje (the ‘armour’). De la Rúa announced the deal to the country in December 2000, in a speech that  sounded more like a plea to foreign investors and creditors. “[the IMF credit line] is a guaranteed fund so large that it clears any doubts or threats over Argentina’s future…Argentina has no more risk, Argentina is safe and transparent, and can now grow in peace…2001 will be a big year for Argentina”.

The End Game

In the space of a few months, it was obvious that 2001 would be big for all the wrong reasons.  The country’s recession was only getting worse as the government continued to cut spending in compliance with the rigid terms of the IMF loan. In a desperate move to restore confidence, De la Rúa brought back Cavallo to the economy ministry, a man favoured by the markets and big business and seen as a pillar of strength in an otherwise weak government.

Cavallo, who was given extraordinary powers to push through new measures, acted quickly to try and save the convertibility model that he had created. A patchwork collection of new taxes, spending caps, debt swaps, and cutbacks (including a 13% in pensions and some social payments) only deepened the country’s social problems and turned more people against the De la Rúa government.

The end of convertibility was now inevitable, with the question more about how to minimise its impact on the economy and society. Yet Cavallo refused to accept that his model was exhausted, and was once again backed up by the IMF, who despite serious private concerns about the minister’s actions, agreed to add another US$8bn to the blindaje, including a payment of over US$5bn on 10th September, 2001. It would be the last support Argentina received.

On 5th December, the IMF officially pulled the plug, declaring that it would not release any more funds for Argentina. Its reasoning was that the government had failed to meet its targets for deficit reduction in 2001 and could not find support for the proposed 2002 budget, which contained another $6bn in austerity measures, in a Congress now controlled by the peronist opposition.

Anger at banks in 2001 (Photo: Thomas Locke Hobbs)

With the country almost out of money, two days earlier, Cavallo had implemented the infamous corralito, a $250 weekly limit on the amount that could be withdrawn from banks. Individual savers and small businesses were most affected, and began staging protests outside their banks to demand access to their money. The banks themselves, many of them foreign-owned, had already transferred huge sums abroad, including $143million on 30th November, the last working day before the corralito came into effect.

With the middle class now directly affected, many more people joined the protests that the unemployed (18.3% of the working population) and labour unions had been organising for months. The economy was in ruins, and desperation drove more social unrest. Something had to give, and on 19th December, when De la Rúa declared a state of emergency, it struck the death knell for his government, for convertibility, and for 25 years of poorly-managed economic policy based on neo-liberal thinking.

Perhaps more importantly, the catastrophic policies of a model that had should have been withdrawn many years earlier united the popular classes against the establishment, and for the first time since 1976, the majority – Argentina’s ’99%’ – remembered that it too had the power to shape the destiny of their country.

The streets of Buenos Aires exploded on 20th December 2001 with police repression to the protestors who took to the streets starting the night before. The financial collapse and the extreme loss of wealth shocked the system. People were beaten, fired upon with water cannons, rubber bullets and eventually lead bullets, leaving to 39 dead. President de La Rúa fled the Casa Rosada by helicopter prompting a government collapse that saw the country welcome four new presidents in less than two weeks.

Ten years on, the memory still burns bright. Demonstrators, organized by Quebracho, marched along Av. de Mayo from 9 de Julio, ending at Plaza de Mayo. Vandals set the government Christmas tree on fire, burning the decorations down to the metal frame. Photographer Patricio Murphy shares his photos from both 2001 and 2011.

A lone cyclist comes upon a row of riot police, 20th December 2001

Protestors bang pots and pans through the streets of Buenos Aires - 20th December 2001

The Casa Rosada in Plaza de Mayo - 20th December 2001

Police move through the crowd at Plaza de Mayo - 20th December 2001

An injured man is escorted through the streets by members of the PFA force - 20th December 2001

Mounted police stand guard - 20th December 2001

Mounted police patrol Avenida de Mayo - 20th December 2001

Debris burns on the streets of Buenos Aires - 20th December 2001

The crowd in the streets of Buenos Aires is framed by a large print of the Argentinazo on display - 20th December 2011

Protestors march through the streets of Buenos Aires to commemorate the dead of the Argentinazo - 20th December 2011

Quebracho set fire to tires blocking the traffic along 9 de Julio during the march to commemorate the dead of the Argentinazo - 20th December 2011

Vandals set fire to the large Christmas tree in Plaza de Mayo at the end of the march - 20th December 2011

‘The Worst End’. That is how national daily Página 12 described President Fernando de la Rúa’s resignation on 20th December 2001.

President De la Rúa fleeing the Casa Rosada by helicopter on 20th December 2001 (Photo: Walter Astrada)

At the premature end of his presidency, the country witnessed the worst state violence since its return to democracy in 1983. In total, 39 people died throughout the country, including five at the hands of police in the very centre of Buenos Aires.

The iconic image of the president ‘fleeing’ by helicopter from the roof of the Casa Rosada shortly before 8pm would become a powerful symbol of the demise of the government, and the chaos Argentina’s political class found itself in.
But it was the last few hours of De la Rúa’s 740 days in office that would remain imprinted in the minds of those who lived through it.

“It seemed like something was going to happen,” says Damián Neustadt, at the time a 25-year-old freelance photographer living in Caballito.

Like many in Argentina, on the morning of the 20th, Nuestadt woke up expectant. In Buenos Aires, the unprecedented protests of the previous night had unleashed a new social force, as exciting as it was unpredictable. With the cry of “El pueblo, unido, jamas será vencido” (The people, united, will not be beaten) at doors of the Casa Rosada, the public had defied the state of emergency and forced Economy Minister Domingo Cavallo, the architect of convertibility and the corralito, to resign.

At the same time, the aggressive police response, using rubber bullets and tear gases to clear Plaza de Mayo in the early hours of the morning, had left an air of tension as the new day began.

Nuestadt had joined the masses and taken photos of the police response. “I returned home at 5am, slept a little, and then went back to the Plaza in the morning with extra rolls [of film],” he says. Sensing that something big was about to occur, he also took a radio with him, so that he could find out quickly if a coup d’etat had taken place.

Soon after arriving, at around 9:30am, he witnessed the first of many acts of police brutality that day, which he would document in some 250 photos.

Madres versus the police at Plaza de Mayo on Dec 20, 2001

The Repression Begins

When Neustadt arrived, groups of protestors—some still remaining from the night before—were mingling in the square. Among the most conspicuous were the Madres de la Plaza de Mayo, who gathered as they had for more than two decades for their weekly Thursday vigil in remembrance of those disappeared during the last military dictatorship.

This particular day, the Madres, who defied a murderous military regime, were also out to protest against the state of emergency decreed by the president the night before.

Virginia Lattanzio, 60, who had stopped on the Plaza de Mayo as she made her way to work in the city centre, witnessed what happened next.

“Around mid-morning, the mounted police came and rode their horses right over the Madres without a care. It was terrible,” she recalls, still incredulous almost ten years later. “There wasn’t any provocation that they [the police] responded to, they ran directly over people who were sitting down with a mate.”

The documentary ‘Argentina: Ahora o Nunca’ by Canadian Brian Hunter, who was living in Argentina during the crisis, also captured the police repression.

“I remember the helpless feeling of seeing an 80-year-old woman being beaten by a mounted police officer,” says Neustadt, pointing to one of his most memorable photos from that day – the white headscarf of a Madre in the foreground facing down eight policemen on horseback.

“I realised this was a breaking point; not just another day. And the public began to perceive it too: they saw the violent repression on the tv and came to the square with their arms held up to show that they were not doing anything.”

An Absent Government

As the square was filling with people, the government was engaged in a last ditch attempt to reach out to the peronist opposition — which held a majority in both legislative houses — and broker an agreement to exit the crisis. Following Cavallo’s lead, the entire cabinet had offered its resignation as a gesture to the peronists; clearing the protests from the emblematic Plaza de Mayo was another key prerequisite to opening negotiations.

Stories from inside the Casa Rosada that day tell of an increasingly isolated president, left powerless and indecisive as his government disintegrated around him. One particularly striking anecdote included in journalist Lucio Di Matteo’s book ‘El Corralito’ is that of President De la Rúa sat alone in his office watching cartoons as the violence outside escalated in the early afternoon.

The political chaos of that day has left unclear who was ordering the police to use such brutal force against peaceful protesters. De la Rúa maintains that he was not responsible, stating in a recent interview with La Nación that he only found out about the deaths in the city centre an hour after leaving the Casa Rosada.

A trial due to begin in June of next year will assess the responsibility of high-ranking members of the government in the violence and murders of that day (De la Rúa was cleared of criminal blame by the courts in November 2010). Neustadt has been called to testify due to his proximity to the police throughout the day.

Soon after the first outbreak of violence against the Madres, he witnessed the conversation between a federal judge and the police officer in charge of operations in the square – Jorge Palacios, who would later be charged with political espionage soon after being named chief of the newly-created Buenos Aires Metropolitan Police by Mauricio Macri in 2009 – in which the forces were ordered to retreat and allow people to voice their protest.

The order was ignored, however, and protected by the national state of emergency, the police launched new waves of attacks. A running battle ensued, with the police clearing the square with increasing force, only for the crowds of protestors to return. Without any government action, the violence intensified through the afternoon.

“I had never seen the police so out of control,” recalls Neustadt. As he took photos of Eduardo de Pedro, a friend and member of human rights groups H.I.J.O.S being bundled into a police car (where he was beaten and threatened with death), an officer put a shotgun in his face and advised him to stop and leave. At another point, when Neustadt was left isolated after the square had been temporarily cleared, he received a heavy blow from a police baton: “now that you are alone, what are you going to do?” jeered the officer.

“They [the police] were not worried at all about the photos – I was right in their faces, you could see their ID number. They were more annoyed that I was there taking photos than about the photos themselves,” adds Neustadt, describing the impunity with which the police operated that day.

Lead Bullets

The worst of the violence occurred between 3pm and 5pm. By that stage, more hardened protesters were hurling rocks at police, who were no longer responding with just gases and rubber bullets, but firing live rounds directly into the crowds. In clashes near Av. de Mayo and Tacuarí, three protestors – Gastón Riva (30), Diego Lamagna (27), and Carlos Almirón (24) – received fatal wounds.

An injured man is lead away by police (Photo: Patricio Murphy)

The president’s final speech, soon after 4pm, in which he appealed once more to the Peronist opposition to form a unity government and failed to mention or condemn the police aggression, only fuelled the violence.

“It all exploded after the speech,” says Lattanzio. “People were hoping and expecting the president to take control of the situation [...] But he said nothing, just threw the blame [at the Peronists] and played the victim.”

Soon afterwards, a fourth victim, Gustavo Benedetto (23), was shot in the face after protestors on Av. de Mayo and Chacabuco were fired upon by police and security guards sheltering inside the HSBC building at the corner. Benedetto’s mother and sister, who were watching the events unfold on television, saw him being loaded into an ambulance, bleeding heavily and unresponsive.

The End

It was only when news that De la Rúa had resigned circulated, around 7pm, that calm began to return to the streets. Even then, there was time for one more killing: Alberto Márquez (57) was gunned down by police as he sat with other protesters on 9 de Julio. Unlike the other deaths, where the shooters have never been identified, four individuals from the Internal Affairs department of the Federal Police are on trial charged with Márquez’ murder.

Around that time, Neustadt returned home after developing his photos, some of which were published in newspapers around the world the next day. “I didn’t know about the killings; I found out when I returned home. And then I had a bit of a panic attack for having been so close, especially as I had a one-year-old daughter.”

Despite that, he says is glad he went and was able to document the events of that fateful day.

“I had the feeling that I needed to be there, taking photos that might be of use later [...] For me, the difference that day with other historic moments in Argentina is that the public were out on the streets for real, for themselves, without any direction. It’s clear that some later exploited the events for their own gain, but at that moment, for those two days [19th and 20th December], that’s how it was.

“I don’t think a country has many moments like that in its history.”

Lead image by Sub Coop

@marcdrogers

Cacerolazo in the streets of Buenos Aires (Photo: Sub Coop)

Shortly after 11pm on 19th December, 2001, residents of Buenos Aires began streaming out of their homes, blocking streets in their neighbourhoods and marching towards the Plaza de Mayo. Soon, the banging of pots and pans—a form of protest coined as a cacerolazo—could be heard throughout the capital.

Street protests were nothing new in Argentina at the time. With the economy in its third year of recession and unemployment approaching 20%, piqueteros (picketers) frequently cut streets to demand government support while labour unions had called regular general strikes. The situation had deteriorated since the beginning of December, when Economy Minister Domingo Cavallo imposed restrictions on cash withdrawals from banks, leaving many angry clients unable to access their savings.

But this night was different.

Moments earlier, President Fernando de la Rúa had called a national state of emergency in a televised address. The measure was designed to put a stop to the unrest and looting that had for days been escalating in the impoverished outskirts of the city, turning increasingly violent. Instead, in a spontaneous display of collective anger and defiance, the public—significantly, the middle class—took to the streets with a simple message for the political leadership: “que se vayan todos“ (get out, all of you).

It was the point of no return for De la Rúa, who had become a political pariah, even within his own party. The president would leave office at 7pm the following day, departing ignominiously by helicopter from the roof of the presidential palace as police violently suppressed the street protests below, killing five people in the city centre. In total, 39 people lost their lives in two days of unrest.

Yet this was more than just the removal of an unpopular government. The uprising of the 19th and 20th—later known as the Argentinazo—represented a rupture between the Argentine people and the discredited political establishment. There were no partisan banners or chants in the protests, just a collective rejection of the ruling class and the economic paradigm that had been implemented 25-years earlier with the military dictatorship and intensified during the neo-liberal frenzy of the 1990s.

In the chaotic fortnight that followed, the country had four different presidents who, between them, enacted both the biggest debt default and currency devaluation in global history. As the rebuilding process began in 2002 under President Eduardo Duhalde, half of the population lived under the poverty line; among the other half, many chose to emigrate. The damaged – but not broken – democratic institutions faced a new social reality, with a intolerant public that had, temporarily at least, put aside class distinctions to combine and magnify the impact of the piquete and cacerolazo.

Young men fight against the police on 9 de Juilo in December 2001 (Photo: Sub Coop/Nicolas Pousthomis)

Ten years later, the immediate effects of the crisis are now barely noticeable, but its legacy lives on in today’s policies, social movements, and local attitudes.

In the coming month, The Argentina Independent will revisit this historic turning point in a series of articles ten years on from the crisis. In part one, starting tomorrow with testimonies from the protagonists of the Argentinazo, we will hear the personal stories of those who lived through those days, and analyse the role of the key players – both inside and outside of the country – who led the country into the abyss.

In the second half of the series, we will examine the Argentina that emerged from the ruins: the popular assemblies, bartering clubs, and recuperated factories that typified a new era of social activism and participation; the political hole that would be filled by kirchnerismo; and the resurrection of the internal market as the pillar of the economic model.

The reconstruction of the State, the evolution of social movements, and the search for justice are complex and unfinished processes, even a decade later, and we cannot aspire to cover all aspects of the ’2001 effect’ or answer all the questions that remain from those fateful days. Neither is our intention to condemn or romanticise the path that the country has taken on its ongoing recovery.

However, as the paradigm of free market capitalism and corporate-led politics comes under strain in the developed world, a better understanding of the new Argentina – including all of its flaws and idiosyncrasies – can only enrich the contemporary debate.

This is what we hope to provide, and encourage you, our readers, to participate with your own comments, questions and experiences.

Update: below are the links to the articles in this special series.
2001-2011: The Day That Changed Argentine History
2001-2011: The Making of a Crisis
The Indy Eye: December 2001 and 2011
2002-2012: Kirchnerism and the Rebuilding of the State
2002-2012: The Social Movements that Re-imagined Argentina

@ArgentinaIndy @marcdrogers