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Amid Economic Worries, Argentina's Living Standards Decline - 2002-01-16

Argentina's continuing economic crisis has hit the country's vast middle class especially hard. Once the envy of its Latin American neighbors, Argentina's middle class has seen its living standards decline dramatically and some members have even fallen into poverty.

Nellie Maria works as a translator because her pension of about $80 a month is not enough to make ends meet. But despite working, she said she has seen her living standards - and those of her middle class neighbors - decline because of the economic crisis.

"Little by little you have give up a lot of things: to think twice if you go to a restaurant. Not to go to the cinema except for one day in the week when it is very cheap, or not going at all. And a lot of things that you could buy, you could afford to buy but now you say 'no, I can't afford to buy it because I don't what is going to happen tomorrow' or because you don't have the money. You have to [make] priorities," he said.

Ms. Maria's comments reflect the feeling of most Argentines, who even before their currency was devalued earlier this month had seen their standard of living deteriorate. The peso, which had been pegged to the dollar at a one-to-one rate since 1991, has lost more than 40 percent of its value - a development that will make life even harder for Argentines.

Argentina was once the wealthiest country in Latin America and can still boast of having higher social indicators than many of its neighbors. The average Argentine completes almost nine years of schooling, compared to less than five for the average Brazilian. In a country of 36 million people, there are 268 doctors for every 100,000 Argentines while in Brazil there are just 127.

But a recession that has lasted almost four years, uncontrolled borrowing, economic mismanagement, and corruption have taken their toll. Atilio Boron of the Latin American Social Sciences Council in Buenos Aires says unemployment and poverty are at record highs.

"The unemployment rate today is six times as big as it was during the first 80 years of the [last] century," he explains. "So you have the average of the first 80 years, from 1900 to 1980 is three percent, and we are now at an 18 percent. Poverty. Argentina was a country in which poverty was always a marginal issue very few people were poor in this country, nothing like the traditional poverty of rural Brazil, for instance. You had some pockets in the isolated provinces in the northwest, but nothing like of this sort. Today we have almost 40 percent of the population living under the poverty line."

The decline of Argentina's per capita income is another indication of how living standards are falling. In 1998, at the start of the current recession, the per capita income of Argentina's 36 million people was $8,300. By 2000, it had fallen by $700 to 7,600 and $50 per person.

Sports journalist Daniel Perazzo has personally experienced this. Among the unemployed, he says everything he has worked for all his life has been lost.

We Argentines, Mr. Perazzo says, are sunk in misery, in anguish and in a situation in which we don't see a future for our children. We're in a bad way, and we feel bad, he says, and impotent especially in the face of the politicians.

Mr. Perazzo's anger with Argentina's politicians is common. Many blame them for bringing the country to the verge of economic collapse. It was this anger that prompted many middle class Argentines to take to the streets last month banging pots and pans in protest, in actions which some analysts say forced the resignations of two Presidents within a two week period in late December.

President Fernando de la Rua, who was elected in 1999, was the first to go when he stepped down on December 20. Political analyst Felipe Noguera says the middle class protests of the preceding day were a decisive turning point.

"This was a wave in which the urban middle classes went out first into their balconies and backyards banging their pots and pans, and then they went out on the streets and then they went down to the public squares and meeting places," says Mr. Noguera. "This was de la Rua's electorate, and that was the end of de la Rua. When the people who had voted him, that had supported him, that identified with his party and went out in this initially spontaneous protest, the media immediately jumped on the bandwagon and reported yes that people are banging pots and pans and they showed them on TV and more people went and this, of course, becomes a sort of reinforcing cycle but once that happened it was over for de la Rua, that was it."

A similar protest more than a week later against the policies of interim President Adolfo Rodriguez Saa was one of the factors that led to his resignation on December 30.

Since then, middle class protests have diminished somewhat. But a great deal of frustration remains, fueled by continuing government restrictions on bank withdrawals aimed at preventing a collapse of the financial system.

Argentine president, Eduardo Duhalde, is well aware of this frustration and anger over the country's dismal economic situation and with Argentina's political class. Speaking to foreign journalists earlier this week, the former senator and governor described his country as being just "one step away" from anarchy. However, in an interview with CNN later, Mr. Duhalde said with his government experience and the support of all sectors of Argentine society he can lead the country out of its current crisis.

In this, the role that Argentina's middle class will play is likely to be decisive.