Posted on 11/12/2001

Argentina Needs Money

As the country hurtles into bankruptcy, its people are suffering stress,
panic attacks and a wave of suicides

Sophie Arie, Buenos Aires, Sunday December 9, 2001, The Observer

Andrea Pena is 33 but she wears a brace. So does her partner. Otherwise
their teeth would not fit the moulded gadgets Argentine dentists provide to
stop the grinding that was keeping them awake at night. 'I am lucky this is
the only physical symptom I have because of stress,' said Andrea, a graphic
designer at a Buenos Aires bank. 'Other people have gastritis,
hypertension, panic attacks, whatever. Everyone is living in permanent fear
because no one knows what the future will be.'

Argentina's economic crisis, almost four years long, reached fever pitch
last week as the International Monetary Fund appeared to be pulling the
plug on the cash-strapped country, withholding a vital $1.26 billion loan
and leaving Argentina hurtling towards the biggest bankruptcy in history.
To stop people yanking their savings out of the country, cash withdrawals
were rationed to $1,000 a month, leaving many stranded and worried in a
culture in which most day-to-day transactions are still made in cash.
'People are taking this as if the country were going to war,' said Dr
Humberto Gobbi, of the Association of Argentine Psychiatrists, adding that
psychological complaints had tripled in a week.

A 26-year-old local authority worker and an antique furniture-maker, 55,
committed suicide last week because of crippling debts. Both men said in
parting messages that the latest phase of the economic crisis had pushed
them over the edge. A total of 356 more people killed themselves in 2000
than in 1999, according to government figures.

While most drugs sales have slumped 10 per cent over the past year,
pharmaceutical companies say Argentines have bought 13 per cent more
anti-depressants and 4 percent more tranquillisers. Corner shops and
lampposts carry flyers for group therapy and anti-stress massages while
national newspapers are scattered with adverts for bankruptcy litigation
and sexual impotence cures. 'Nobody knows if they will have a job tomorrow
or when they will be paid. People are almost paralysed by fear and a sense
of impotence. There is a sense that the country is in free fall,' said
Jacquie Lejbowicz, a psychologist in Buenos Aires.

Crises are something of a way of life in this once prosperous country in
which no two consecutive governments have survived a full term since the
first military coup in 1930. Portenos, the inhabitants of Buenos Aires, are
a melancholy, anxious breed, partial to the films of Woody Allen and
producing more psychoanalysts per capita than any other country. But the
current crisis, which began in mid-1998, has brought the nation to its
knees. 'Argentina has chronic political and economic crises every seven or
eight years,' said political analyst Rosendo Fraga. 'But this is the worst
social crisis we've ever had.' Unemployment has risen from 16 per cent to a
record 18.4 per cent during the past three months and, according to
independent pollster Equis, every day another 2,000 people are falling
beneath the poverty line - living on less than $4 per day. Of the 14
million Argentines now living in poverty, half belonged to the country's
large middle class only five years ago.

Economy Minister Domingo Cavallo insisted the panic was premature and said
in a televised press conference, 'There is no need to worry. I realise
people are worried but there is no need to be alarmed.' But, as he headed
for Washington in a final attempt to pull on the heartstrings of the IMF,
he admitted Argentina would default on its debt this week without the IMF's
help. Years of lavish public spending and reckless borrowing have built up
the colossal $132bn debt that threatens to sink the country. A $2.2bn
interest payment is due on Wednesday.

With the brutal military regime of 1976-83, the humiliating defeat in the
1982 Falklands War and the crippling hyperinflation of 1989 still fresh in
the collective memory, many say Argentines are so crisis-hardy they will
weather the looming storm and recover quickly. But last week, many
complained the emergency cash rationing was undemocratic and 'worse than a
dictatorship'. Small groups of protesters gathered in the centre of Buenos
Aires last Thursday, throwing eggs at the Central Bank and accusing Cavallo
of 'economic genocide'. Public discontent has been simmering with protests
most days and angry piqueteros blocking roads across this vast country for
months. Unions are planning a national strike on Thursday. The rebel leader
of the General Confederation of Workers (CGT), Hugo Moyano, who called for
'civil disobedience' during a recent protest, has promised the strike will
be peaceful. Most Argentines swallowed the latest pill with nothing more
than verbal protest, as they have the last seven rounds of austerity
measures over the past year, including 13 per cent cuts in pensions and
salaries. 'There is always a feeling that however bad things get now, there
could be something worse around the corner,' said Fraga. 'But if you have a
default that means the collapse of the financial system, and you are sure
to get social violence.'

Many say President Fernando de la Rua, whose ratings are at rock bottom and
who is criticised for being weak and indecisive, could be a casualty of the
looming financial collapse. But Argentines are not disappointed only in
their President. In the October legislative elections, a record 40 per cent
of voters chose to cast blank or spoiled votes rather than support any of
the candidates. Eighteen years of democracy have been marred by rampant
corruption and political profiteering that have left many with the sense
their politicians are a bunch of robbers who have sold the country. 'We
were better off under the military,' said Pedro Cuelho, 53, a taxi driver,
who says his earnings have dropped 40 per cent in the past week. 'At least
back then there was some kind of order.'