Second Teubal letter about Older Women's Plight in Bankrupt Argentina

By: Ruth Teubal
February 11, 2002


    So many thanks for your rapid diffusion of this issue, and for the many responses you and I are receiving. 

    I entirely agree with those letters that suggest the need of understanding the contextual, global and historical factors to explain why Argentina, one of the then richest of Latin American countries, is now living this terminal condition. I adhere to the reading of Stiglitzīs article, mentioned by Susanne Paul. Besides in this letter I would like to add information to further contribute to the understanding of the Argentine situation.

    A second thought arose from reading the many responses: why not consider the possibility that the important reactions from people working in so many diverse places may have an influence on local sectors.. Why not think that the international opinion of experts from organisms, organizations, systems, may be useful and may exert pressure in the interest of the Argentine people.

    As suggested in these letters, great responsibility lies on the IMFīs contradictory policies towards  Argentina. Of course, not total responsibility since  acquiescence and exaggerated obedience of local political leaderships, corporations, banks, and judges, is also responsible; they  admitted bribes and/or pressures, and made these perverse policies possible. I find it important to briefly describe, as best I can, what has been the journey that leads to this situation.

    During the ī90ties, and following obediently the IMFīs "suggestions", Menem brutally and corruptly privatized all state services (electricity, water, communications etc)  to pay our foreign debt and cut down public expenses. When he left, Menem was a hypermillionaire, and our debt was three or four times greater. The State had many more employees with lowered salaries, and microeconomic indicators showed intense increase of all the social variables: child mortality (for obvious reasons),  undernourishment, health, poverty, unemployment, feminization of poverty with its terrible consequences, medium and small business closedowns, and massive concentration of wealth and monopoly of large corporations. Large sectors of the former middle class downslid and are poor today. And everybody who is not very rich has gradually been losing buying power everyday.

    The "emptying" (economic robbery or devastation) of the IINSSJP, the Pensioneers and Retired Personīs Institute also took place, with consequent reduction of services towards older persons. 13 % of Argentinaīs population is composed of older persons. And 22% of the population of the city of Buenos Aires is older than 60. These persons have been vitally affected.

    During this decade, the IMF and the foreign press continuously praised Menem as the "wizard that transformed Argentinaīs economy" since the macroeconomic statistics were great! I have a very tangible  personal vision and experience of this because I spent time in the US on several occasions during the nineties. Most people (mostly from the Academia or social area professionals) were surprised that I should be so worried about this country. I remember having to explain that  Perón "at least did many things for the poor, for areas of health and education" even if he was a fascist. Or that he was the type that "stole but also was a good doer" as differing from Menem.  

    The fact is that, maybe brainwashed  by the monolithic discourse that what was being carried out "was the only way out" "the only alternative", (now I know that this is an authoritarian discourse), most of the citizenry knew and let pass, more or less passively, different but very gross types of transgressions and illicit actions. If someone initiated legal action,  the results would always be of innocence. (Menem packed the Supreme Court with his friends; weīre now trying to kick its members out). 

    Hence we have the explosions of Israelīs Embassy and the AMIA Community Center still not clarified, millionaire arms sales to the Bosnia Serb region not clarified , the explosion of a whole town that had an arms factory belonging to the army, not clarified, etc etc etc.(the list is very long) with no proof of anything. 

    At present,  the pockets have been touched of  whatīs left of the middle, lower middle, and  higher middle class, in what is clearly and illegal kidnapping: the banks simply refuse to return the savings to their legitimate owners, alleging they donīt have the money because they lent it to “others”. This obviously cannot be an argument in any contemporary country. In the reverse situation, if an individual canīt pay his debts, it means he shall lose his house or his car, etc.   Besides , these “others” seem to be many of the 150 local and foreign corporations that have debts of between 70 million to 300 million dollars each.

    People are not free to dispose of their money as they wish. Every day measures are announced, and taken back the next day; they all tend to try to maintain the money within the banking system, and innumerable consequences arise, related to health problems, payment of debts (school fares, doctorīs bills, getting medicine, and the possibilities to consume). No money circulates outside of the banks; more layoffs have been produced. The government protects the banks because "the financial system must be saved", and has decreed to indirectly "nationalize" or make "public" the private debt of these corporations and companies. We all know that Cavallo did this same thing in 1982; history repeats itself too quickly: and president Duhalde has either had to bend to the pressures, or has wanted to do so, or has been bribed to do so.

    These measures imply an increase of our internal and external debt, which will have to be paid by the people of this country... Truly a deadly mortgage for future generations. In these situations, those that least have (the poor and the vulnerable), pay the most. These measures, and the very complex general situation has endangered the concrete lives and existence of all older persons, including older women. This situation could be called one of economic genocide. All citizens and future generations will have to pay this impressive debt of the corporations, with their poverty. .. .If at present we have 40% of the population living below the poverty line, it is esteemed that with these measures (and others), it soon shall get to a chilling 60%. 

    As with Enron, whatīs going on here, in a way, questions the whole financial system.

    Itīs hard for me to offer a picture that is sufficiently inclusive, but Iīll add an aspect: the chain of payments is broken, and geriatric programs for example, donīt receive their monthly subsidy; hence they canīt pay their employees and canīt buy medicines.  Pharmacies donīt give any more discounts to retired persons because the IINSSJP (National Institute for Pensioners and Retired Persons) is in default and wonīt pay the difference any more. All hospitals have suspended programmed surgeries because there arenīt any essential and basic medical materials such as anesthesia, syringes, etc. In one hospital, they re-floated old glass syringes!

    Since inflation has commenced these passed two weeks, retention and stocking of essential medicines has begun, so as to raise their price in a few days. Two of my friends, who are very dedicated social workers,  had difficulty in obtaining very essential medicines (for asthma and arthritis).   Medicines for oncology , heart diseases, diabetics and hemophilic are missing from public hospitals.. The foreign laboratory lobby wants to prevent hospitals to produce their own generic medicines. Imagine! At the risk of peoples lives!

    It is my understanding (who really knows what was really said or suggested?) that during last November and December the IMF wanted a devaluation (which Cavallo refused to do); now that this has been done (last week), the IMF says the government should have "dollarized" instead. With its continuous sarcasm when the IMF functionaries refer to Argentina , it seems to me that this organism behaves like a schizophrenic parent who never finds anything well done by its child, and probably delights to maltreat, change policies, victimize, pressure, manipulate, to finally tell his child he is free to do his will. For years it has demanded that Argentina to better her internal revenue, for example, thus generating recession.  In addition, locally it’s been impossible to obtain taxes from the big companies; these are the great tax evaders. To compensate, the government historically increases tax pressure on the middle class, the small vendor, the teacher etc., or reduces social programs. Lately, it has cut already modest salaries and the pensions of the retired persons. These measures, so insistently formulated by the IMF, have been very regressive.

    I guess the time has come when people are beginning to say "enough" "this is too much". As Joseph Stiglitz says, we were a bit tardy to react. But now, all over the country everyday  there are  massive and  peaceful protests demanding that the law and the constitution be applied, (juridically), equity, and transparency from the government (local and national), or punctual demands such as demands for jobs, farm subsidizing, payment of late salaries, payment of late pensions, etc.

    In this sense, the country is very much alive, but I donīt know for how long the peaceful stance will last, nor Duhaldeīs presidency. He has again repeated history and bent to the lobbies; and heīs a very tough guy. It wouldnīt be surprising if he insidiously generates violence, in order to justify police and army repression. Maybe that will be the only way he can control this strong and angry citizen movement...

    Hope Iīve not been to boring or too confusing, but why not think that just as international pressure from the companies bent policies in one direction, why not think that pressures from other sectors of the world may have an effect in other directions.

    And thereīs no government, no Congress apparently. Everybody seems to be on leave.


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