DEVELOPMENT-ARGENTINA: Plummeting into Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, May 10 2002 (IPS) - Argentina’s economic crisis has pushed 2.5 million people into poverty in just four months, and today nearly half of the country’s population of 36.2 million are poor, according to official figures.

The 14.5 million poor in Argentina in December – the month marking the eruption of the economic crisis and social and political protests that ended the Fernando de la Rúa presidency – now number 17 million, according to the latest study by the governmental National Institute of Statistics and Censuses (INDEC).

The country is on the verge of breaking its own record as far as the portion of the population living in poverty, which reached 52 percent in the late 1980s, an era of hyperinflation.

But the causes of poverty today are considered more structural in nature, and thus more difficult to change. During the period of hyperinflation, the government and the private sector alike had the ability to help the population keep up with high prices by boosting wages. No longer.

“We have never seen this confluence of negative factors: depreciation of the currency, inflation, high unemployment, declining income, financial crisis and political crisis,” stated Artemio López, director of the Equis consultancy, which is tracking poverty in Argentina.

At this rate, López told IPS, by year’s end, poverty will reach 57 percent of the population, and that is only as long as prices rise by only 50 percent the rest of the year, a prediction considered optimistic by several experts, who forecast inflation of 100 percent.

INDEC’s basis for calculating poverty is a family of four in which total monthly income does not exceed 160 dollars.

The evolution of the price of the basic monthly “food basket” for a family of four has had a big impact on household expenditures. Inflation was 21.1 percent from January to April, but in that period the price of cooking oil jumped 136 percent, of flour 121 percent and canned tomatoes 95 percent.

Meanwhile, the Economy Ministry reports that unemployment hovers at 24 to 25 percent, while the latest official figure available from INDEC dates to October 2001, when it was 18.3 percent.

“We don’t have enough food, donations have dropped off, and since November the government no longer grants us subsidies,” said Agustina Peña, in charge of a parochial centre that provides three meals a day and educational support to 70 poor children in Béccar, a town in the central province of Buenos Aires.

Peña, a social worker by training, commented to IPS that the deterioration in the standard of living of the children and their families she serves, and the increase in domestic violence, are the consequence of an extreme poverty that is unprecedented in Argentina.

“In the nearly 10 years we have been here, for the first time we have had to designate all donations to the food service” in order to provide meals for all who request them, “and it is still not enough,” she said.

The cafeteria system for providing meals to poor school-aged children in Buenos Aires province, the most populous in the country, today serves 3.8 million children and adolescents, though is designed to serve just 1.8 million, according to a local teachers’ union this month during a large street protest.

“The biggest problem in the schools today is hunger. The children arrive Monday after not eating Saturday and Sunday, and there is not enough food here. To make the food stretch we have to water down the milk or give them only bread and fruit, and that is the only food that many of them will eat all day,” said unionist Hugo Yasky.

The government provides the cafeterias 18 cents on the dollar for each meal, an insufficient sum because each portion is stretched to two.

Furthermore, food prices have risen dramatically and suppliers face delays of two or three months in receiving payment, which forces them to cut back provisions.

The Argentine government and the provincial administrations are bankrupt. Shrinking tax revenues and rising debts impede them from covering minimum expenditures, resulting in delayed outlays even for urgent needs, such as services for the extremely poor, for children and for pregnant women.

In 1989, when inflation surpassed 4,900 percent, unemployment stood at 7.5 percent, a proportion that permitted the negotiation of better wages.

The adage heard at the time was: “Prices go up using the elevator, wages use the stairs.”

Today, however, with employment affecting a quarter of the work force, it is common for employers to make wage cuts.

Public employee María Amelia Espósito told IPS that “with hyperinflation, at least you knew that if prices increased, wages would follow suit. But now, when prices rise we know that wages don’t go up, but down, they aren’t paid on time, and worse: you could be fired.”

Companies are not granting salary compensation, nor are they contemplating any increases in the short term, reported the privately run Labour Studies Society. And additional wage cuts are predicted. Thirty percent of private firms reduced salaries in 2001, and another 20 percent said they would do so this year.

The procedure – which if it were obligatory would be illegal – is formalised before the Labour Ministry, where the employee signs a document stating that he or she voluntarily accepts the salary cut.

This new situation, which is increasingly frequent among employees with middle to high salaries, is a far cry from their demands for salary hikes in the 1980s.

The televised images of the looting that occurred in December have given way to silent scenes that are equally desperate.

In a country where hunger in Argentina has not been mentioned by the media in years, television broadcasts daily include interviews of children and adolescents who say they have not eaten anything in several days. Schoolteachers say they feel powerless when faced with children who faint due to hunger.

Equis pollster López stated that 48 percent of the 1.3 million residents of Matanza, a city in Buenos Aires province 40 km from the capital, are poor.

The children are worse off because they are more numerous. Nearly 60 percent of minors in Matanza live in poverty, and 22 percent are indigent, according to the local authorities.

“With a population in which 46 percent face employment problems, 520 people in Matanza are falling below the poverty line each day,” said López.

He pointed to another grim statistic: four of every 10 children are born malnourished and remain hospitalised at least 10 days after birth.

DEVELOPMENT-ARGENTINA: Plummeting into Poverty

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, May 10 2002 (IPS) - Argentina’s economic crisis has pushed 2.5 million people into poverty in just four months, and today nearly half of the country’s population of 36.2 million are poor, according to official figures.
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