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Last Updated: Wednesday, 17 March, 2004, 18:06 GMT
Argentina's uncertain recovery
By Richard Collings
BBC World Service business news editor

Nestor Kirchner president of Argentina
The Argentine people is backing Nestor Kirchner

The International Monetary Fund (IMF) believes Argentina has learnt the lessons of two years of severe financial belt tightening.

A top official recently said the IMF no longer needed to "lecture" the Argentine government on what measures needed to be taken.

And indeed, it increasingly appears that normal economic life is gradually returning to the country.

But most people still do not trust the banks or the government after losing most of their savings when bank deposits were frozen two years ago, and not everyone is feeling the benefit of this much vaunted turnaround.

We still can't be sure we're on the right track
Julio Piacars, former central bank chief
A tango bar in downtown Buenos Aires is one of the few areas of business which is doing well, but only because there are so many people looking for somewhere to drown their sorrows cheaply.

Muted protests

Many of the customers are former teachers and public sector workers.

Since losing their jobs following IMF-inspired government spending cuts, they are finding it hard to make ends meet.

Just across the street, a few hundred jobless Argentines protest against the Government's latest plans.

But although there is no doubting the enthusiasm of the protestors, these gatherings in the Plaza de Mayo, the main square in Buenos Aires, bear little resemblance to the angry and violent scenes which took place here when the financial crisis first erupted.

Then, most of the major banks found their branches looted as customers were told that they had lost almost all their savings.

Martin Murphy, who reports for the BBC's Latin American service, says there are clear signs of improvement.

police fire tear gas at rioters
Riots swept through Buenos Aires two years ago
"The reason why the middle class and the majority of Argentines are not on the streets like they were two years ago is that the economic situation is picking up.

"There is more employment, the banking system is starting to work again, people can sell their houses, and the currency is not going up and down - the economy is a lot more stable than it was two years ago", he said.

Most people acknowledge that President Nestor Kirchner has been central to the process.

His appointment followed arguably the most turbulent period in Argentina's history, with three presidents holding office in little over two weeks.

Political commentator Ari Palluch says there is a popular will for him to succeed.

"People now believe in the president, now people say give time to the president," he said.

One sign of normal life returning is the reappearance of gangs of workmen repairing the broken pavements and crumbling roads of Argentina's once proud capital city.

It's public works like these which the Government claims are creating jobs and improving everyday life.

Slow recovery

Julio Piacars is a former head of the country's central bank.

The truth is we haven't felt any change at all
Margerita Barrientos, soup kitchen volunteer
"There's certainly a recovery underway, but it's not enough to ensure that this turns into positive growth by 2005.

"I would say that we're still suffering, we're getting a little bit better, but we still can't be sure that we are on the right track," he said.

That caution is reflected at the Villa Soldati soup kitchen, only a few miles west of the capital.

Here, Margerita Barrientos and a group of volunteers prepare hot lunches for 1,000 people every day.

Most of them are unemployed - and some are only alive because of the handouts.

No change

Margerita says there's no sign of any economic recovery here.

"No, the truth is we haven't felt any change at all - on the contrary, people seem to be more in need than ever," she said.

"There are more young children abandoned in the streets, there are more people begging.

"Perhaps there is change in other areas - but as far as the social needs of this part of the city are concerned, we haven't seen any improvement," she added.

The IMF and the Argentine Government are keen to point to the country's newly found success.

Crude oil and soya beans are just two industries which are earning billions of dollars, but the continuing popularity of the soup kitchens show that very little has changed for many ordinary Argentines.

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