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Tuesday, 5 February, 2002, 06:11 GMT
Anxiety grips Argentina
People wait in line to buy dollars at Buenos Aires' Banco Nacion
Many Argentines are broke as a result of the crisis
By the BBC's Peter Greste in Buenos Aires

A new survey provides a telling glimpse of the way Argentines feel about their economy in the wake of Sunday's release of the government's economic recovery plan.


All I know is that I am not making any sales... I can't help worrying that it's all gone badly wrong

Cafe owner on the recovery plan
The survey, published in the Clarin daily newspaper, said 46% of people now prefer to hide their money "under the mattress" rather than deposit it in the bank.

The startling figure reveals not just a lack of confidence in the banking system, but a lack of confidence in the future of the economy.

The pessimistic outlook could be felt on the streets of central Buenos Aires.

The usually bustling pedestrian avenue, Florida Street, was sprinkled with a few businessmen ambling to work and tourists taking advantage of the depreciated peso to snap up cheap souvenirs.

No mood for shopping

But it had none of the usual vibrancy, and most shops were empty of customers.

Javier Muro runs a leather store, selling high-quality jackets to Argentina's middle and upper class shoppers. He leant forlornly against his counter, arms crossed, and shook his head.

"I don't know when this is all going to end," he sighed. "But unless things get better within the next month or two, I will have to close. I've been here for the past seven years, and out of that we've had four years of recession.

Argentines protest against bank curbs in Buenos Aires
No major demonstrations for now, but significant bitterness
"Things were pretty good in the beginning, but we've seen it only spiral down since then and now I'm at rock-bottom. I don't think I'll be able to hold on much longer, because nobody has any money."

A critical problem is the lack of money now circulating. The government declared a bank holiday for Monday and Tuesday, to head off a run on banks after the Supreme Court last week ruled that restrictions to cash withdrawals were unconstitutional.

But after a weekend of shopping for routine supplies, few people now have any spare money in their pockets left to use in the shops.

Eduardo Cornide was equally forlorn. His café usually does a brisk morning trade with businessmen on their way to work, but because most of his sales are too small for credit cards, he too has found that his cash-paying customers have vanished.

"It's hard for me to understand these new measures that (Economy Minister) Jorge Remes Lenicov spoke of last night and to work out how it is going to affect my business. It doesn't look too bad, and I think he's the most honest and responsible economy minister we've had for a long time.

"But all I know is that I am not making any sales. That is probably because of the bank holiday now, but I still can't help worrying that it's all gone badly wrong," he said.

Poor penalised

Economist Eric Calgano agrees. He believes the government had no choice but to convert the entire economy to pesos, but he argues that the way it was done benefits the wealthy with US dollars in off-shore accounts.

An Argentine woman holds her 10 month-old daughter outside their makeshift house in San Miguel de Tucuman
A four-year recession in Argentina has already caused rampant poverty

"We can't get the economy going by helping those who don't need help," he said. "The only way is to give money to people who will spend it, and those are the poor people.

"The only solution is for the government to honour its promise to spend $1bn on job-creation programmes, and then we might see some hope. But if they don't then I think we are in for some real pain."

And any further cuts are likely to spark even more violent street protests from a public at the end of its tether.

Unusual calm

The good news for now is that for the first time in weeks there have been no major demonstrations. That may be because Argentines are broadly satisfied with the government's performance so far.

But there is still significant anger and bitterness at the government and its political institutions.

"They're all thieves," said one shopper who did not want to give her name. "I don't trust any of them.The only thing is for them to all resign and for us to start again. I'm ready to protest again when we know how bad the budget will be, because the only way out is to get rid of them all."

It is a widely felt opinion, but hardly a solution. Even so, it indicates just what the government has to cope with if it is to get the public backing that is central to any economic solution.

See also:

04 Feb 02 | Business
Argentina unveils crisis package
02 Feb 02 | Americas
Argentina 'on brink of anarchy'
30 Jan 02 | Business
IMF tells Argentina to cut spending
02 Feb 02 | Media reports
Press attacks supreme court decision
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