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

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

Chancellors of the Union of South American Countries (UNASUR) met this Wednesday in Buenos Aires to discuss commercial policies proposed by the South American Economy and Finance Council, in hope of tackling the effects of the international financial crisis on the region.

The council , which is made up of economy ministers and heads of central banks throughout UNASUR member countries, approved the development of a multilateral currency exchange system. They also agreed to create a bank for regional development, as well as creating a reserve fund.

Diplomats finalised plans to create an Electoral Council, which would analyse and keep tabs on different electoral processes in member countries.

Story courtesy of Agencia Púlsar, the AMARC-ALC news agency.

The Argentine economy is flying. Since the country’s debt default in 2001, GDP has grown by 79.5%. This growth has been fuelled by increasing commodity prices and strong trading relations with other high-performing economies such as Brazil and China.

On a national level this is all very well. And the government has increased its public spend (as a percentage of GDP) by 6.9% over the last three years. But this has not resulted in tangible benefits for all the population. Most of this additional spend is in the form of subsidies – mainly energy and transport – rather than investiture in infrastructure and industry, so that overall production remains at a low level. In addition, the level of inflation (officially 9%, but widely recognised as being 25%-30%) is now among the highest in the world, making the day-to-day lives of the population extremely difficult.

In light of this imbalance, the Argentina Independent hit the streets of Buenos Aires to find out what the economic reality looks like to the people who live within it day by day.

Photos by Shane Korpisto

Oscar, Buenos Aires, Businessman

Things are better but a lot is still missing. We still do not have enough work in Argentina and inflation rises and rises. If your salary increases by $500, prices increase by $1000. Inflation is much higher than what the government claims. I think Argentina’s economic future is highly uncertain. The faces are different but the process is the same. I am sure that every ten years we will have a crisis here!

Marlene, Buenos Aires, Singing teacher

I think our economy still does not do extremely well. Life here is very expensive but wages remain low. I have no fixed salary as a singing teacher and it is difficult. The situation in this country has obviously improved, but it is still very complicated. My circle of friends barely reaches the end of the month. It is difficult to make a living as an artist here. I am teaching to survive, so I barely get to play or sing on stage. Besides, I think that money is badly distributed here. And the income of the government is not well spent. Housing and education should be the number one priority. But, I do think that the economic situation here is going to improve more and more, I am a believer!

Ernesto, Buenos Aires, City Employee

Development in Argentina is generally very limited. It is a step by step development, sometimes more and sometimes less. Argentina has the same development as every other Latin American country. Very unstable, everything depends on the dollar and foreign economies. Argentina’s heyday has passed a long time ago. Besides, the economic growth is uneven in the provinces and the Capital. The interior of the country is still extremely underdeveloped.

Medine, Buenos Aires Province, Cleaning Lady

I experience every day how prices in Argentina are rising but our salary does not. The dollar continues to rise and it has an effect on us. I work as a cleaning lady. Nowadays my salary is not even enough to pay my expenses anymore. On the weekends when I am going to the market, everything is unbelievably expensive. That was different before. Rent is a problem, too. Before you paid $200-$300, now you pay $500. Sometimes my salary only covers my rent. I am single but I imagine having a family to be impossible at the moment, because I would not know how to sustain it. Even going out to dinner once is almost impossible. The amount of money I would spend on one lunch in a restaurant, I usually need to live off for a minimum of two days.

Hernando, Buenos Aires, Entrepreneur

The Argentine economy does not favour me at the moment. As a tradesman and business owner, I suffer a lot from inflation. A huge part of my income goes to the government and social expenses. Because of the unions, salaries are high, which in my opinion is not fair, because much education is not required for the positions. A bus driver earns $7000 and an employee in a factory earns $10,000. That is too much money for a position like that. As a business owner, you cannot raise prices more than 25% to stay competitive, but wages rise and rise. Now the employee earns the same as the business owner here in Argentina. Many people are better off, but we business owner not. I am not happy with the situation, but at the same time do not see a better solution.

Victoria, Buenos Aires, Student

Argentina’s economy always rises and falls. Nowadays we clearly have more work in this country and that is great. The downside is the inflation: prices rise and wages do not. Even groceries are so expensive now. However, the economic situation in Argentina is stable now. I do not think we will have another crisis.

Teachers’ Unions will meet Buenos Aires’ minister of education, Esteban Bullrich, to discuss salary rise after last Saturday’s failed attempt. And if an agreement fails to be reached, classes will not start next Monday. “If we don’t reach an agreement there will be conflict”, warned Eduardo López, UTE-CTERA’s (teachers’ union) vocal. Teachers demand a 30% salary rise and Bullrich offers a 20%.

Discomfort escalates amongst teachers, particularly after hearing Santa Fe’s government proposal. López argued they had offered a 27.5% rise. “As the city of Buenos Aires’ teachers representative, if I fail to obtain an equal percentage to that of Santa Fe, there will be conflict for this city is the wealthiest of the country and teachers cannot earn less than in other jurisdictions”, he protested.

López accused the city of Buenos Aires’ government of going against public education. “I have to discuss salary rise with people who didn’t attend to public school and whose children certainly aren’t educated in the public system. Meanwhile, the city is running out of teachers”.

The strike threat is looming on a national level as well. Unions will meet national minister of education, Alberto Sileoni, to discuss wage minimums. “We believe the government has an improved political will to dialogue. We expect a decision for Wednesday”, Union sources stated.

La Rioja, Neuquén, Chubut and Salta have already closed their agreements. The same will presumably happen in Tierra del Fuego, Misiones and Santa Fe.

Youth from the area attack a Prefectura truck (Photo: Kate Sedgwick)

Over five thousand settlers, whose occupation of Parque Indoamericano lead to scenes of violence and unrest in Villa Soldati, have now deserted their camps.

The mass exodus, completed yesterday morning, came after an agreement reached between the city and federal government to create more social housing.

Clashes between the people trying to find housing in the area in the south of Buenos Aires, neighbours and police forces left three people dead and a fourth to be confirmed.

This localised incident highlights a desperate lack of investment in social housing and overcrowding across the city.

Timeline of Troubles

Settlers first started moving into the park land, which is owned by Corporación Sur, on Sunday 5th December. Two days later, federal and metropolitan police attempted to evacuate 200 settlers by force following a court ruling and by the end of the day two people had been killed in the clashes.

The Federal police have denied their culpability in the deaths, saying that they only fired rubber bullets.

President Cristina Fernández de Kirchner spoke out calling for an end to the violence. Aníbal Fernández, head of the national government cabinet, said: “This government does not accept that any member of the security forces can raise a fist against someone that is protesting.”

On Wednesday police forces around the park were overwhelmed as thousands more settlers set up tents and shacks leading to widespread discontent among local residents.

Residents gather by highway (Photo: Kate Sedgwick)

By Thursday local residents had taken to the streets, angry about the vacillations of the city and national governments and afraid that the settlers would stay there, hemming them in with another villa - there are already three in and around the neighbourhood.

On Friday, with more people settling on the land, security forces in absentia and public bickering between Mauricio Macri, mayor of Buenos Aires, and the president’s administration – residents marched into the park vowing to evict the settlers themselves.

With a minimal police presence scenes soon got out of control. Residents claim that their protest was infiltrated by barrabravas – violent hooligans affiliated to certain football clubs, including Club Atlético de Huracán.

The Bolivian community in Buenos Aires claims that a fourth person was killed in the violence. Witnesses say that the ambulance carrying him away was overwhelmed by violent crowds who dragged him outside and shot him dead. These allegations have not been confirmed by the authorities.

While area youth shoot fireworks and throw rocks at the Prefectura, they fire tear gas to disperse them (Photo: Kate Sedgwick)

With events spiralling out of control police moved back into the area on the weekend, creating a human barrier with riot shields across the Escalada and Castañares, and eventually sealing off the park.

Sebastian, a resident who grew up in the neighbourhood, described the scenes, with violent youths throwing rocks and missiles at police who retaliated with tear gas and water cannons.

He says that what started as a peaceful protest was overrun with violent packs of youths that weren’t from the neighbourhood. “They were sent there by someone – that’s what everyone thinks – maybe a political group. We aren’t stupid, something  strange was going on.”

The suspicion was echoed on a national level, with President Fernández de Kirchner saying that the violent clashes in the south of the city “didn’t just get out of hand”; they were “sponsored by someone”.

The following day a degree of calm was restored to the area, with police blocking off access to the park and preventing further clashes. A census was taken to record details of the settlers. As water, chemical toilets and food was brought to the park, local residents began gathering to voice their unhappiness.

Residents’ Reaction

It is understood that the people occupying the park initially came to Villa 20 from the provinces and suburbs of Buenos Aires, having paid money to groups who promised them accommodation in the city. Upon arrival people living in the villa turned them away and consequently they moved to the parkland nearby.

Alejandro, who has been living in Villa Soldati for over 20 years, spoke from a residents’ meeting at the bottom of Escalada on Tuesday: “What they’re demanding is legitimate but it isn’t legal. It’s illegal because this is public land. Both the national and city government have abandoned us and we, the residents, are trying to do what we can.

“Every day we’re meeting here between 7pm and 9pm – people are coming together to stop people just settling wherever they like. We don’t have a political agenda – we’re just families that live here,” he said.

Social Housing Crisis

According to Buenos Aires Sin Techo (Homeless Buenos Aires), a report published earlier this year by the Comisión de Vivienda de la Legislatura de la Ciudad, there are over 100,000 suitable buildings standing empty in the city.

Buenos Aires Homeless (Photo: Captain Victor)

Despite this, some 12,000 people live in 150 asentamientos (unofficial settlements), 170,000 live in 16 villas and 110,000 in unsafe buildings. According to the report, there are also thousands living in homeless shelters, and hostels, as well as the untold numbers who sleep on the pavements.

One of Macri’s election campaign pledges dealt with the issue of social housing – he pledged 1,600 new homes in Villa 20 alone, according to Alejandro Salvatierra, a delegate from Villa 15.

There is a lot of frustration amongst citizens about the reality of evicting people from overcrowded housing without counterbalancing it with investment in social housing to solve the shortage.

Macri’s response has been that there is no money to build houses. But Sebastian speaks for a lot of people when he says that the mayor wasted budget money on gimmicks like the metropolitan police force instead of his promises about more social housing.

“The metropolitan police is completely useless – it was the expensive whim of a capricious little rich boy who wanted a police force for other rich people, we never see them around here. People started throwing stones at them and they fled – I feel sorry for them,” he said.

City-National Government Dynamic

Although Macri has taken the brunt of the blame for the violence, the inability of the city and national governments – whose policies are often polar opposites – to work together has made the handling of this crisis even more difficult.

After a series of meetings, public mud-slinging, letters and name-calling, emergency talks were held on Friday night as scenes in Villa Soldati turned ugly. Macri met with Aníbal Fernández – the head of the cabinet – and representatives from the neighbourhood. The cabinet chief later said that the national government had agreed to act as a “guarantor” in negotiations with the settlers.

Juan Carlos, a nearby resident said that while the national and city governments are squabbling publicly, the residents – who he says started a peaceful protest and then got caught up in the violence – are in the middle.

“At this moment individual politics is irrelevant, we all need to work out as citizens of this city how we are going to resolve this… Everyone is doing what they can for now because the state isn’t here. At the moment we feel abandoned,” he said.

Macri has been publicly accused of xenophobia by the Bolivian embassy and Fernández following a statement he made blaming the national government’s immigration policy for the housing crisis in the city in an attempt to shirk blame.

“It seems that Buenos Aires has to look after all of the neighbouring countries and this is unfeasible. Every day between 100 and 200 people arrive in the city and we don’t know who they are, brought here by delinquency and drug trafficking,” said Macri at a press conference.

“The deaths have nothing to do with the evictions in the city – it’s because of insecurity and immigration,” he added.

An embassy spokesman said: “Macri’s comments are creating a climate of xenophobia against the Bolivian community – stigmatising those who are supporting the development and the economy of Argentina.” His comments were echoed by Hebe de Bonafini, leader of the Mothers of the Plaza de Mayo, and other human rights organisations.

Prospects

While the park has been evacuated after the agreement reached between the city and national governments, many of the key points of the accord have yet to be defined.

The city government has been given 120 days to present a plan to the national government, and a working table has been set up between various organisations including Banco de la Ciudad. It has been stated that one of the prerequisites to apply for any housing will be two years of residency in the capital, and both parties have emphasized that the housing will not necessarily go to those who took the park, but to those who are most in need. Further details have yet to be made public.

Many more eyes will now be watching to see if the governments can fulfill their promises to address the social housing crisis. But with an election year around the corner, the suspicion remains that the handling of the situation was an attempt for both sides to gain political points off one another. But with a toll of three – or possibly four – deaths and staunch criticism off residents in much of the south of the city for their handling of the situation, it seems like there have been no winners over the past two weeks.

Photo by José Ribeiro Junior

Capitalismo

In Europe or in the US, if we took a poll to find out what the biggest concern was, many people would immediately reply: the credit crunch. But the response would be slightly different in Latin America and especially in Argentina where the economy has not been hit quite so hard. One question remains: why has the country escaped the worst of the financial crisis?

When we look back over the last two years, we realize how deep and severe the financial crisis was. By mid-2009, the world economy had already seen the collapse of big institutions like Lehman Brothers, a sharp rise in unemployment and many governments pumping money into the banking system.

But as the HSBC chairman, Stephen Green, forecasted in June 2009, there was no light at the end of the tunnel yet: “We are almost two years into a financial and economic crisis which is far from over. We cannot even say we are past the worst,” he said. This sentence highlighted the seriousness of the financial turmoil. Many economists agreed, saying that this was the worst recession since 1929.

Today, people who were looking forward to seeing the world economy back on track face a rude awakening with the plunge of the Greek and the massive amount of debt continuing in developed countries.

Thus, in February 2010, the UK office for national statistics revealed that the UK national debt – which is the total amount of money the British government owes to the private sector and other purchasers of UK gilts – was up to £848.5bn (US$1,305bn) and corresponded to 59.9% of Gross Domestic Product (GDP).

This is a pattern that is reflected across the developed world – other European countries, such as France and Germany, have debts that are up to more than 70% of GDP, according to the International Monetary Fund (IMF). Even more extreme, Italy’s debt is around 115% of GDP. In the US, the debt rose up to more than US$ 12 trillion in December 2009, according to the US treasury. This corresponds to 83% of GDP.

“The financial system is almost non existent”

Consequently, it looks like Argentina puts up a slightly better show than Europe and the US, with its 49.1% of debt to GDP in 2009. Obviously, the economic situation still looks precarious, and the level of inflation remains particularly high: 15% in 2009, according to economists.

Photo by Rosalie Smith

Daniel Heymann, an economist from the Economic Commission for Latin America and Caribbean (CEPAL).

Of course, the country has faced some repercussions of the financial crisis, but nothing that compares with the credit crunch in many developed economies. Contrary to their US and European counterparts, the Argentine officials didn’t have to take the controversial decision of pumping money into banks.

“There was no banking crisis in Argentina in 2008. The most obvious reason comes from the fact that the financial system here is almost non-existent,” said Daniel Heymann, an economist from the Economic Commission for Latin America and Caribbean (CEPAL), in Buenos Aires.

Unlike the developed economies and their complex financial instruments, Argentina sticks to the basics such as credit cards, short-term loans and deposits. Additionally, the Argentine banking system remains extremely prudent, keeping its lending particularly low. “The ratio of bank loans to GDP is around 12.5%. This means that the level of lending is very low. So, basically, if you don’t have credit, you don’t have a credit crisis,” explained Heymann.

“Very low” is the least we can say. As a point of comparison, the level of bank loans to GDP in Brazil was up to 44.6% in February 2010, according to the US TV channel Bloomberg.

At first sight, the gap between the neighbours looks huge. Why does Argentina record a much lower level of lending than Brazil? “It’s a questions of confidence. People don’t trust the financial system and this situation is directly linked to the country’s history,” Heymann explains.

Photo by Beatrice Murch

Economics Editor Alfredo Zaiat, Página 12

A history of political uncertainties in Argentina lead people from the upper class to send their liquidities abroad. The fact that this segment of the population preferred foreign banks to the local ones had a direct repercussion on financial institutions. “Between 1976 and 2001, the succession of economic crises prevented Argentina from developing a proper financial system. In 1978, there were 800 banks in the country. Today, this number is down to 100 and among them, only ten banks get 70 to 75% of the total credits and deposits,” explained Alfredo Zaiat, Página 12’s economics editor.

Also, during the economic crisis in 2001, the situation kept deteriorating. Many people, seeing that banks couldn’t afford to give them their money back, decided to close their bank accounts. “After the 2001 crisis, the demand for credit was very small and banks have been particularly affected. But we have seen an amelioration in the banking system in the past few years. It’s slowly evolving. However, it will take a while for the system to start lending again,” added Heymann.

The Economic Crisis in 2001

Economists agree that the economic crisis that Argentina faced in 2001 was a real shock while the international financial turmoil in 2008-9 had only a few repercussions.

Photo by Jorge Gobbi

Monedas Argentinos

Since 2003, the local economy has recorded steady growth, which allowed the country to save money in order to refinance its debt. Contrary to the US or other countries in Europe that have adopted a fiscal policy based on the logic that you can spend much more money than you really have, Argentina gave priority to savings. “Argentina faced a massive fiscal crisis in 2001. The IMF agreed to pump money into the economy. So the country had to assume its responsibilities and refinance its debt. In any case, Argentina could have afforded to have a level of expenses higher than its level of savings,” said Zaiat.

By the end of 2005, President Néstor Kirchner and his government vowed to pay the Argentine public debt to the IMF in a single and anticipated disbursement. In order to do so, US$9.5bn was used from the Central Bank’s reserve. These reserves had been accumulated since 2002 and the repeal of the convertibility law. Since then, one of the missions of the Central Bank has been to buy dollars from the market to keep control of the exchange rate, which is currently around $3.95 to the dollar. Thus, in 2008-9, the country faced the financial crisis with a reserve of US$48bn. This was an advantage for Argentina as Central Bank’s reserves aim to face unexpected events. Thanks to its reserve, a Central Bank can pump money into financial institutions that are suffering from bankruptcy for instance.

A Drop in Exports

But this was not sufficient to escape unscathed. “Many people thought that emerging markets wouldn’t be affected because they had accumulated large reserves. In fact, every region and more or less, every country in the world has been affected. In 2009, the industrial production, the construction and the agricultural sector had to face a recession,” explained Heymann.

Photo by for a brighter tomorrow

Buenos Aires Shipping Docks

The biggest consequence of the crisis was the drop in exports. Argentina saw its exports plunge from US$70m in 2008 to US$55.7m in 2009. Although an overvalued exchange rate of the peso remains an advantage for Argentina as it leads to lower import prices, it’s also, a drawback for the exports. Exporters lose price competitiveness and market share, which damages profits and employment in some sectors, notably manufacturing industries.

As a consequence, some Argentine manufacturers asked the government to get a weaker peso in order for them to be more competitive and to increase the level of exportations. But the economy minister, Amado Boudou, said that there would be no leap in the exchange rate in 2010.

Argentina may not have suffered in quite the same way as the US and Europe. Obviously, its economy is not as reliant on the banking industry and thus the concept of ‘credit crunch’ was not as evident. However, the depression affected the entire world as demand for products and services from other countries lessened. Argentina was unable to remain competitive in this field as developed countries were able to offer more at a lesser price. After this slowdown, the biggest challenge for Argentina will be to increase its level of exports in 2010. The figures published by the beginning of 2011, will reveal if it has been successful or not.

Over 80 businesses in Venezuela have had their electricity cut off today, for failing to comply with a government order to reduce their consumption by 20%. The companies, which range from pubs and Chinese restaurants to the country’s official distributor for Sony, will be without power for 24 hours. The government drive to reduce electricity use in Venezuela is a consequence of massive energy shortages resulting from a severe drought, which has left the country’s main hydroelectric power plant functioning at half capacity.

The decision to cut off the companies’ electricity was announced by the vice president, Elías Jaua, who said that the move was intended to send a clear message about the importance of complying with energy regulations. A government document announced that if companies continue to use too much power, next time they will lose electricity for three days, and then indefinitely.

Electricity rationing was first announced by President Hugo Chávez on 8th February, when he declared an “energy emergency” across the country and said that “high level” users would be obliged to drastically reduce their consumption.

The energy crisis follows the worst drought the country has seen in over 60 years. Dry weather has a severe effect on the nation’s ability to produce electricity, because over 60% of the country’s power comes from a hydroelectric plant, which requires high levels of water to function to full capacity.

The government maintains that energy shortages are entirely the consequence of the natural phenomenon El Niño, which has caused extreme heat and reduced rainfall across the country. However, opponents have accused Chávez of worsening the crisis through mismanagement. Yolanda Valery, a correspondent for the BBC, reported that critics have said he failed to make the necessary investments to ensure that the country’s energy supply remained consistent.

Chávez responded to accusations in a newspaper column, writing: “This [opposition] campaign has, of course, one single aim: declare Hugo Chávez guilty of everything, even the drought. Indeed, I would love to have the powers I’m accused of by the opposition to defeat this situation which not only hurts Venezuela but the whole world as a result of the destructive voracity of the capitalist system.”

Electricity shortages have led to protests and social unrest across Venezuela. Polls have also shown Chávez’s approval ratings have dropped significantly as a result of the issue.