Post by Bozur on Mar 2, 2005 18:29:38 GMT -5
Wednesday March 2, 9:15 PM
Social debt remains high as Argentina ends default
BUENOS AIRES, Argentina, March 2 (Reuters) - A few blocks beyond the fashionable waterfront steakhouses and hotels of downtown Buenos Aires lies a slum whose population grew fourfold in the three years since Argentina's economy collapsed.
This week Argentina turns the page on its crisis by
ending a three-year default on more than $100 billion in debt after persuading resigned creditors around the world to swap bad debt for new bonds at an unprecedented 70 percent loss.
In the default's wake, however, are millions who lost jobs, slid below the poverty line, settled in slums and still eat just one meal a day -- the price paid for Argentina's mistake last decade of borrowing too much money.
"Nobody in their right mind can recommend another country experience what Argentina did," Economy Minister Roberto Lavagna said in January amid concerns on Wall Street that Argentina's default could become a model for other nations.
A 10-minute walk from Lavagna's office and the presidential palace would land him in the Costanera Sur/Rodrigo Bueno slum, a symbol of decay in a capital that took pride in its European-style elegance and wealth.
"At the height of the crisis, 10 trucks arrived every Saturday and Sunday with families," said Orlando Fernandez, coordinator of the slum's fight to remain on the prime riverfront real estate. There are now an estimated 2,500 to 3,000 residents, up from some 700 in 2001.
One of the latest arrivals is cleaner Betty Roman, 27, whose dirt-floor shack is only accessible by a rickety walkway over the river muck. A perforated plastic soda bottle is the shower head on her illegal water connection.
"Squatter settlements in Buenos Aires have grown 100 percent since the 2001 crisis," said Sandra Bergenfeld, a local lawmaker who heads the city council housing commission.
STUCK IN THE SLUM
But the latest economic indicators show big improvement over the worst year, 2002, when the economy shrank by 10.9 percent and the portion of poor among the nation's 37 million people peaked at 57 percent from 31 percent in 1998.
Argentina's economy grew 8.8 percent in both 2003 and 2004 and the poverty rate last year dropped to 44 percent, while the jobless rate fell to 16 percent from a high of 25 percent.
In Bajo Flores, a rough neighborhood on the edge of the capital, the Sol Naciente soup kitchen sees better days but still feeds 700 children as it did three years ago.
"Before we were in an emergency and now we are in a difficult situation," said coordinator Lidia Hernandez.
Even with a victory on the debt restructuring and an impressive recovery for the economy, populist President Nestor Kirchner is careful not to sound too jubilant.
"Argentina still has a lot of work to do on the social front," his Cabinet chief Alberto Fernandez said on Tuesday after Kirchner told Congress the default was over.
The government will announce the official results of its debt swap on Thursday and analysts predict creditors holding 70 to 80 percent of the bad debt will have accepted the terms.
Although the end to the sovereign debt default should prompt new investment in Argentina, no one in the slum expects miracles and many feel trapped in their poverty.
"I've been without a proper job for 12 years," said part-time pizza maker Ruben Loza. "I tried to get a job as a security guard, but am discriminated because I live in a slum. I have to lie about my address."
Loza earns 80 pesos ($27) a week, enough to feed his family of five once a day at midday. For dinner, they drink tea. (Additional reporting by Lucia Goncalves)