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Social Problems Collapse Argentian*

Economic Plunge Exacts Social Toll in Argentina

___ Desde Washington ___

Marcela Sanchez on the policies and debates that are shaping events in Latin America.

Desde Washington in English or Spanish.

By Anthony Faiola

Washington Post Foreign Service

Friday, November 9, 2001; Page A01

BUENOS AIRES, Nov. 8 -- The advancing leukemia makes her weak these days, but not weak enough to blunt the rage. Isabel Andres, 56, lives in the cozy house her grandparents bought when Argentina was as rich as France and had more cars than Japan. But she pounds her hands on the dining room table, caught between frustration and fear, part of a nation undergoing financial collapse. In her bankrupt country, there are no funds left for people like her.

A single woman fallen on hard times, dying of cancer of the blood, she is desperately in need of a new drug that costs $3,000 a month. Although her treatment was officially approved by the insolvent state health insurance system for the aged, she received a chilling reply from the woman at the counter when she went to collect her benefit: "There is no money," she was told, and the words became a litany for hundreds of other desperate people in line. "I'm sorry, but there is no money left."

"It is just not right," said Andres, her voice trembling. "No one thought it would ever come to this, ever. The country is broken. My God, please, I don't want to die too."

Andres is one face in the landscape of Argentina's dramatic economic slide. At the turn of the last century, Argentina ranked among the world's 10 wealthiest nations. Decades of military dictatorships and corrupt civilian governments tore the country down, but this vast land populated mostly by the descendants of immigrants from Italy, Spain, Germany, France and Britain was still Latin America's richest, with a standard of living akin to parts of Europe. It enjoyed relative immunity from the abject poverty and lack of services so common in other parts of Latin America.

After a rapid opening to the free market during the 1990s that was plagued by runaway public spending and corruption, Argentina's economy stalled during the wave of financial crises that hit East Asia, Russia and Brazil late in the decade. While other nations recovered, Argentina lingered in recession, failing to boost exports or create new jobs because of its relatively high cost structure and, in some cases, its still uncompetitive industries. At the same time, government overspending continued, financed with more and more borrowing.

The country has now reached its breaking point. After a series of failed measures to jump-start the economy, the government last week announced the largest national debt restructuring in history, which Wall Street bond-rating agencies say is tantamount to a default. Cut off from further international lending, the embattled administration of President Fernando de la Rua is trying to salvage what little status the country has left with creditors by complying with a strict zero-deficit target. But the ravages of recession have left little in government coffers, and people such as Andres are paying the price.

"The people have a right to complain; they have legitimate demands that are not being met," Economy Minister Domingo Cavallo said recently. "Nobody should fool themselves. . . . Argentina's loss of credit has to do with excessive spending . . . and the nation still has prolonged and unresolved problems. Poor administration of the social security and PAMI [health insurance for the aged] systems, oversized [government] organizations, excessive bureaucracy and high political costs -- those are the problems shared by both the nation and the provinces . . . problems that we have to set straight."

The social welfare system, meanwhile, is broke. Last week, pharmacies and private hospitals essentially cut off the more than 3 million subscribers to Argentina's PAMI system because the agency has not paid most of its bills for months. That is in part because the national treasury, to meet budget targets, has refused to prop it up.

Assistance programs for the poor are suffering, with food baskets arriving late, if at all. To reduce spending, the government has also slashed pensions and salaries for state workers. Many subsidies for the elderly and mentally ill are weeks or months late. State employees in some provinces have not been paid in four months; last week a group of workers in the state of Entre Rios attempted to burn down the local Economy Ministry. Impoverished disabled people cannot get replacement prosthetics. State assistance for funerals has been cut off.

"They talk about the dangers of default with foreign creditors, but the real problem is that Argentina has already entered into social default with its people," said Eugenio Semino, social services ombudsman for Buenos Aires. "We are seeing the genocide of the sick, the old and the poor. Things have been bad here before, but I tell you, never this bad."

About 85 percent of the clientele at the private Antartida Hospital in the declining middle-class neighborhood of Flores depend on the state welfare or PAMI systems. But after five months without payments, the hospital joined most other private institutions in cutting off care. About 70 percent of its doctors have been laid off; those who remain have not been paid for weeks. The situation for nurses and administrative staff is worse.

Only chemotherapy patients and those who are so ill that they are close to death or in trauma receive treatment. The hospital has turned to bartering with other private clinics for such supplies as film and gauze. All knee surgeries have been postponed indefinitely. The stark white halls, typically bustling with staff and patients, are largely empty. In contrast, public hospitals are now so overburdened that patients are spilling out the front doors of emergency rooms.

In the downward spiral here, problems seem endless. Carlos Lopez's farm, for instance, typifies a country that just cannot seem to catch a break. His ranch in the fertile Pampas is drowning under record floods that have, over the past month, wiped out thousands of farmers already stung by recession. He is hurtling toward financial ruin.

Lopez, 50, born and raised in the country, came to the city in a parade of pickup trucks this week to protest in front of the presidential palace -- the Casa Rosada, where Juan and Eva Peron once preached to the masses.

With 90 percent of his farm rained out, he has been forced to lay off his 18 employees and has lost dozens of cattle in the floods. His family is living off last year's stored food and supplies, but they are running out and he is bartering his remaining cattle for gas and potable water. The roads in his town "are now lagoons" because, he said, the government is too broke to dig drainage canals.

"This is Argentina, damn it!" fumed the stocky man with rough hands and a clean blue sweater. "My grandparents came from Spain to build a better life in a prosperous country, and now, what is left? Corrupt politicians! Bankrupt governments! Greedy foreign banks! They are foreclosing on our farms every day. They are putting us out of our homes, and there is no stopping it. What am I supposed to do now? Go back to Spain?"

Many Argentines are, in fact, heading back to the homelands of their forefathers, sparking a brain drain as the young and educated line up at the Italian, Spanish, German and French consulates, among others. It is not just the recession and 18 percent unemployment rate, they say, that makes them want to leave. Homelessness has doubled in four years. And crime is soaring. In Buenos Aires, a city once as safe as London, two banks are robbed each day on average. The murder rate in the capital and surrounding suburbs has risen 41 percent from last year, according to police statistics.

It has all taken a harsh psychological toll, especially in Buenos Aires, a fretting metropolis where Woody Allen is the most popular film director and there are more psychoanalysts per capita than anywhere else on Earth. But many movie theaters are empty these days; dozens have closed in the past several years. Many psychologists are waiting tables or cleaning floors to make ends meet.

Franco Pinocotto, who studied psychology for seven years at the University of Buenos Aires and whose private practice went bankrupt 18 months ago, is hawking used books on the streets of a grand town that was once compared to Paris, but now recalls New York during the Great Depression. "We have lost our pride," said Pinocotto, a father of five. "Life is about survival now, putting food on the table. There are no more dreams in Argentina."

The shock has been worse because Argentines believed in the spurt of rapid economic growth they witnessed during the 1990s, when the president, Carlos Menem, embraced capitalism and privatized almost everything from the post office to the subways. It heralded, they hoped, a return to Argentine glory.

But it all seems an illusion now. Menem is under house arrest on corruption charges. And even before the recession started, statistics show, the economic opening here was causing a massive widening in the gap between rich and poor.

Globalization is a frequent target in the search for something to blame. But many Argentines are also looking inward, at the corruption and weakness of the political class. They are also examining Argentine society itself. Many complain of an every-man-for-himself mentality, a lack of social responsibility and solidarity beyond the soccer field. In a country in which 40 percent of people are estimated to evade taxes, the government is running a series of advertisements begging Argentines to change their ways.

"There is a sense of national depression," Manuel Mora y Araujo, a noted political scientist, said in a recent interview. "There is a collective sense that we have somehow failed as a nation. That is the worst part."

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