Search View Archive

Not Long Ago, Not Far Away: Argentina in the Aftermath of the New World’s Orders

The following article extends a series, published last year in the Rail, on Argentina in the throes of economic and political crisis. The previous pieces are available on the writer’s page at, where the present article is expanded to include comments on Argentina’s presidential elections.
With national elections pending in late April and ongoing negotiations with the International Monetary Fund (IMF) to eke payments on a crushing national debt, Argentina flounders in the aftermath of last winter’s brutal political collapse and economic default.

Though the situation there’s not grabbing many headlines in the USA, the confrontations driving it have striking relevance: money/finance obligations supplanting the needs of people; national interests neglected to secure international and corporate relations; an increasingly wealthy few maintaining a grip and lure over a populace behaving like it’s both desperate and bewitched. Though the future is uncertain for us all, for the Argentine people that patent uncertainty is compounded: their future has been thrust out to a very great distance. A stasis of contraction and suffering makes the present tense in Argentina a time that will be prolonged indefinitely.

The political machine continues to rattle along among the ruling Justicialista Party, the Peronists. With the opposition Radical Party discredited and swept aside (the previous president, de la Rua, only made it through half his term before being driven from office in December 2001), the presidential election now taking place is a farce of internecine factionalism among the ruling Peronists. The interim president, Eduardo Duhalde, won’t run but manipulates the process to scuttle former president Carlos Menem’s ambitions to return to office. Meanwhile, what few offers come from the international financial community are veiled in threat, with the service and balance of $130 billion of debt forged to the nation’s very identity.

Infant mortality spikes, malnutrition runs rampant. Over 50 percent of the population exists in poverty in one of the most abundantly endowed nations on the planet. Loss of capital is not the crucial loss currently draining Argentina. Argentina’s worst losses are its loss of brains, for emigration remains the viable option for Argentines with a level of preparation or aspiration with which to improve and grow. If they’re not allowed into Spain, those with career aspirations try France, or Italy. Real unemployment is around 25 percent at home, and sub-employment worsens the social impact. State-sponsored education and health care are being erased, kids without school or jobs turn to drugs and petty crime.

An impromptu conference was held in an auditorium near New York University in December, organized by concerned Argentines living here. Forced to start asking questions of each other, their hope is to construct a base of ideas and nurture a desire for change. Recognizing the hopelessly ineffectual political circumstances in their country, they know that ineffectual system sustains itself, breeding corruption and Mafia-esque connections (I know this about you, you know that about me). They also understand that it is buttressed by the judiciary, and that until Argentina can function by rule of law there is little hope of positive change. And that the Supreme Court will take at least a generation of concentrated struggle to change.

Their mission is to brainstorm now, and to send what aid and hope can be mustered (their website,, helps distribute clothes and other necessities). These discussions are honest in addressing a bleak outlook: attempts to sow seeds from which to grow opposition voices who might form parties that could one day compete in elections in Argentina and then may, one day much further along, begin to win those elections and wield power.

An unforeseen turn came in early March for Argentina’s current negotiations with the IMF, which seem based on the dual delays of debt management and of passing things on to the new government (the hope is that elections will somehow render it legitimate and effective). The Supreme Court ruled in favor of the province of San Luis in their dispute with the Central Bank, which wanted to return $270 million of deposits at peso value, about 30 percent of the principle. It’s unclear as yet whether the decision is in effect a redollarization; the ruling gives two months for the province and the nation to work out terms. The national government has suggested ten-year bonds, which would probably cause more riots.

However, the ruling is a major victory for institutions and individuals whose bank accounts (some $60 billion) were frozen for months last year while the peso was unhinged from its dollar peg, the policy of convertibility that checked inflation when introduced but was then maintained for a decade to secure foreign investments. With assets locked away for months, Argentines saw their value plummet daily then bottom out at a quarter of what had been in the banks. The recent ruling sets a standard for reclaiming those moneys; commentators estimate that some $10 billion is at stake, which is about what Argentina has in its national reserve.

This potential monetary obligation further complicates matters, as any ruling that makes the government liable to repay deposits at this renewed valuation flies in the face of IMF requirements. Financial austerity, service of the national debt; these guidelines result in social services being abolished, and the needs of the people being ignored in a time of deepening poverty. The provocation of such conflicting interests is violently divisive; it is what led the people to the streets a little more than a year ago, and led that elected government to the exits.

Last year, former president Menem spoke here at Fordham University while on an international leg of his latest presidential bid. Reciting a list of his administration’s accomplishments, he projected more of the same should he be re-elected, then blamed the nation’s hideous condition on the Radical Party. And he dodged disputation and criticism from the audience. The panel at Fordham’s business school served as a reminder of the quality of connection Menem maintains, and the fact that he’s viewed as the legitimate candidate because his track record of cutting deals and doing business.

His domestic influence is entrenched throughout the judiciary. While in office, Menem expanded the Supreme Court, placing four close allies in lifetime positions, securing legal assent for his policies and proclivities. Friendly with current President Bush, and houseguest of former President Bush, he’s clearly the favored candidate of the USA, a friend of American interests—a thin guise for ready business dealings.

The thin guise may be best seen in the person of Domingo Cavallo, former director of the Central Bank and Finance Minister under Menem. Architect of the neoliberal economic model that bubbled Argentine to prominence in the ’90s, Cavallo’s policies made fortunes for foreign investors while stripping protective tariffs and emptying the nation’s stock market. Trained at Harvard, he implemented U.S. business school models then kept them in place far beyond serviceability. Attempts to manage the tremendous debt incurred by that financial model paralyze any economic activity, while the alternatives of continued default or bankruptcy would entomb Argentina as an international pariah.

Under house arrest last year until investigations into his role in illegal arms trading ran out of steam, Cavallo arrived in New York City as soon as he was released. Employment awaited him at NYU’s Stern Business School, as distinguished visiting professor. That he makes his living here galls Argentines; it is salt in the wounds that his contract excuses him from actually lecturing (his area of expertise: emerging markets).

For, if exposed in classroom, Cavallo would be prey to escrache, where anyone can stand, interrupt and shout fury at him for the impact his policies had on their family members, their culture, their nation. Escrache is a last resort, a public confrontation that joins other home grown Argentine methods of social retaliation. Cacerolazo is another, where pots and pans were banged by marchers out after curfew who brought the previous government down; also the piqueteros, who blocked roadways with burning tires to protest unemployment and evaporating social services in a time of deepening need.

The Graduate Center at City University of New York held a winter lecture series on Argentina, entitled “Reform Amid Crisis.” The curriculum attempted “an in-depth examination of the roots of the crisis,” in an effort to address the situation’s fluctuations and volatility. The panel for February’s “The Costs of Crisis” included Larry Rohter, who has been reporting the nation’s economic dilemma for the New York Times. April’s concluding topics will be a post-election analysis, and a discussion of the military dictatorship, “Legacies of El Proceso, 1976-83.”

A vintage Ford Falcon rolls past the corner façade of the cab driver grill where Adrian Caetano’s recent film Bolivia gets played out. It’s an unmistakable flashback to Argentina’s dictatorship, as Falcons were used by plainsclothes abduction squads working for the military, who hauled Argentine citizens off for interrogation and, in tens of thousands of cases, for torture and death, or “disappearance.”

Bolivia tells the grim contemporary story of two days that an illegal immigrant spends in a Buenos Aires outskirt, working the grill so he can send money home to his wife and daughters in La Paz. Times are tough but where Freddy comes from things are even worse (La Paz made headlines here when the Bolivian military fired on the public in the streets, and the filmmaker’s native Uruguay teeters near economic collapse). Caetano’s grainy black and white film doesn’t flinch from the brittle despair of its principles. And it pulls no punches when showing xenophobia as an outlet for the locals’ frustration (the TV runs incessantly; the cabbies and street vendors stare at football, boxing and soft porn with equally hollow concentration).

Bolivia, which won festival awards in Europe and had its Film Forum run extended at Cinema Village, hits hard both in its ending and its aftermath (Caetano’s latest, A Red Bear, just screened at Lincoln Center’s New Directors New Films festival). The grinding sense of impending violence doesn’t lessen the sudden climax, and its denouement of futility and perseverance of habit simmers in the white chute of Buenos Aires’s daylight.

Even entertainments need to brave reality, as the issues facing Argentina also loom throughout the world today. Here in the USA, the middle class faces a new, economically measurable constriction that the current administration intends to make legally binding. It is a shock to remember that, though Argentina is in a shambles today, two years ago its middle class was the most developed in Latin American, prosperous enough to inspire as much envy as aspiration in neighboring nations.

That class is all but gone today.


Alan Lockwood


The Brooklyn Rail

APR-MAY 2003

All Issues