Monday, July 11, 2011

Don't Cry for Me Argentina

What collapse looks like...

Marcela Ricca lives in a small agricultural town west of Buenos Aires which is now reaping the financial benefits of the boom in soya production.

But 10 years ago, she says, many people only survived thanks to government work programmes and by setting up their own networks of barter, known as Redes de Trueque.

"You'd offer whatever you had," remembers Marcela. "You might repair a washing machine and get six eggs for it. Or do somebody's accounts and they'd fix your car."

The scheme engendered great solidarity and only fell apart when the political parties hijacked it, Marcela says.

"I want my dollars back": Many Argentines saw their lives turned upside down She also remembers the proliferation of alternative currencies in circulation.

The devaluation of the peso meant there were not enough bank notes to meet demand so some provincial governments printed their own.

The most widespread was the Patacon which was printed by the Buenos Aires provincial government.
Retailers would post signs on their shop windows advising shoppers which currencies they accepted.

Employees would arrive at work to find the gates padlocked and that the owners had fled, often stripping the workplace of anything they could sell.

With no alternative, some took control of the premises and set up workers' co-operatives, many of which survive and flourish today.

The most high profile is the Bauen hotel, formerly owned by the Argentine military, in the heart of downtown Buenos Aires.

The workers hold regular meetings, the management rotates and the chambermaids and waiters all have an equal say in the running of the business.

There are also glass and confectionary producers, shoemakers, balloon manufacturers and more.

They work with one another in a framework forged during their formative years but now operate, some more successfully than others, within the more traditional, capitalist system.

The Bauen hotel, for instance, is in a constant legal battle with the original owners who fled when times were tough but now want to recuperate a prime site in the heart of the bustling city.

Mr MacDougall says the biggest losers in the crisis, who have still not fully recovered, were the main political parties which lost their way and became fragmented, and the lower-middle classes who often lost everything.

Argentina's economic recovery has been helped by high commodity prices A popular story circulating at the time of the crisis was that one of the bigger shanty towns in Buenos Aires put up a large sign reading "Welcome to the Middle Classes".

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