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Last Updated: Friday, 19 December 2003, 09:49 GMT
Argentina's threadbare recovery

Elliott Gotkine
BBC South America Correspondent

Piqueteros in Buenos Aries
Demonstrators gather daily to vent their anger at the government
Two years on from Argentina's worst-ever economic crisis, the economy is growing strongly again.

But are ordinary Argentines feeling the benefit?

On a Wednesday night, the Dandy tango bar in the Buenos Aires suburb of San Telmo is packed with ageing aficionados of Argentina's most popular dance.

From the ornate chandeliers to the gramophone sitting on a wooden cabinet, everything here appears to have been plucked from a bygone era: namely the 1930s, when Argentina's wealth rivalled that of France.

Today, Argentina is not even as wealthy as neighbouring Chile.

Smart footwork

But for people like Lina Acuņa - who runs a small guesthouse for tango tourists - the economic crisis has been a boon.

Two months before it struck, Lina's ex-husband, a keen watcher of the economy, warned her to withdraw her money from the bank to protect her savings.

She followed his advice and took her money out in dollars.

When the peso was devalued - after being pegged at one-to-one with the dollar since March 1991 - guest house owner Lina found herself significantly wealthier than before.

"I had six months worth of reservations, in dollars," she recalls.

Lina Acuna
Lina was lucky to take her cash out of the bank before the crash
"So for me it was very good, because the exchange rate went from one-to-one to one-to-3.5, but prices didn't rise. They only went up a little, so I could buy three-and-a-half times as much."

Lina was lucky, for when the economy crashed the government imposed restrictions on bank withdrawals.


Furious middle class savers took to the streets on 19 December 2001, banging casserole dishes to show the government they had no food.

A day later, the protests turned violent. The police moved in and 25 people were killed.

That same day President Fernando de la Rua was forced to step down.

Within a few weeks, three more presidents came and went.

Argentina defaulted on its debts - the largest default in history - and the peso was devalued. There are now roughly three pesos to the dollar.

Struggling to survive

Melisa Raddi is just one of millions of middle class Argentines who now struggle to make ends meet.

The 22-year-old has repeatedly postponed her studies in order to help support her mother, Nora.

Melisa works as the personal assistant to the director of a loan company serving people who have trouble getting credit with the banks. It is a growth area following the crisis.

Melisa Raddi
Despite working for a loan company Melisa is struggling herself
Working from 10 hours a day, five days a week, Melisa earns 500 pesos ($165) a month.

After payments on her mother's debt from a previous flat, and a loan she had to take out to make sure they were not thrown out of their current home, Melisa is left with just 40 pesos ($13) a month.

"We were never a rich family or anything like that," she says.

"But we were a family that could live normally, that could eat, that could clothe itself, that could do what it needed to do and that could give itself the luxury of falling ill and being able to buy medicine. Nowadays we're in a mess."

But not in as much of a mess as 19 million Argentines - half the population - who live below the poverty line.

A few blocks away from Melisa's office in central Buenos Aires a group of men seize bags of rubbish from a dump-truck while the bin-man's back is turned.

They run across the main road, throw their booty on the ground and begin furiously tearing at the bags like a pack of hyenas, in the hope of finding something edible.

Expansion hopes

But most experts are convinced that Argentina's immediate future is bright.

"Many people made a parallel between Argentina's current crisis and the USA's Great Depression in the 30s," says JP Morgan Chase's chief economist for Argentina and Chile, Vladimir Werning.

Although the economy is improving, poorer Argentines still suffer
""Things are pretty bad, but what has changed is the perception going forward. What Argentines had lost was hope, and the prospect that every year was a disappointment has now changed."

JP Morgan Chase expects Argentina's economy to expand by 7% this year, and 6% in 2004.

But try telling that to Argentina's piqueteros or pickets. These disparate groups of poor, unemployed or retired people gather most days of the week in central Buenos Aires, to vent their anger at the government.

With real unemployment believed to top 20% and half the population in poverty, it is little wonder that so many Argentines feel their country's economic resurgence is passing them by.

The BBC's Elliott Gotkine
"With the outlook so precarious no wonder so many Argentines feel the best thing they can do is dance away their sorrows"

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