Funny money: Street-level initiatives in the economic crisis - Currents - Brief Article

New Internationalist, Jan-Feb, 2002 by Chris Moss

ARGENTINA's four-year long slump has become a full-blown economic crisis. In late December the middle classes, angered at the Government's decision to limit bank withdrawals to just $250 (a week -- a measure designed to prevent a run on the banks -- joined the unemployed and impoverished sectors in mass rallies in several major cities. In the capital, Buenos Aires, the federal police used tear gas and rubber bullets against marchers congregating in the central square, the Plaza de Mayo. Twenty-seven civilians died in the clashes and hundreds were injured by heavy-handed official reaction to what were mainly peaceful, spontaneous solidarity marches.

Meanwhile, Argentina was set to default on its $132 billion foreign debt and its currency, the peso, pegged to the dollar since 1991, is unlikely to stand firm as the meltdown continues. IMF-imposed austerity demands have led to at least 18 per cent unemployment. Economic hardship increases daily, almost half the population living below the official poverty line; the health service is on the verge of collapse and retail and banking are in tatters as powerbrokers wait to see if the Government will allow a slide into hyperinflation.

Between President de la Rua's resignation on 20 December and 1 January, 2002, chaos in the state apparatus was even worse than that in the streets -- five heads of state passed through congress as internecine quarrels in the Justicialist Party took priority over restoring calm and order in the country. The marches continued as disaffection with the political classes, once the preserve of left-wing militants and slum dwellers, became universal.

While a series of administrations have proved inept at dealing with social issues, several non-governmental agencies have worked throughout the recession to fill the void left by a dysfunctional social-services ministry. These include non-cash trading, and microcredit projects.

Arguing that the neoliberal model has led to '7 million people with employment problems, 14 million poor and the collapse of tens of thousands of small- and medium-sized businesses', the National Front Against Poverty (FNCP) has been proposing a payment of 380 pesos ($380) to unemployed heads of Families and 60 pesos per child. In mid-December, the FNCP, in association with ATTAC-Argentina, called for a 'popular consultation' -- an open meeting in which all sectors can appeal to the Government for emergency funds to combat poverty. The FNCP states that this direct appeal is enshrined (if unused) within the constitution and that a similar plebiscite in Uruguay helped limit privatizations.

Microcredit is also making an appearance in the country's slum areas. Marta Bekerman, an economics lecturer at the University of Buenos Aires, leads the Avanzar team which implements microcredit schemes in shanty towns on the outskirts of the capital city. Loans of between $200 and $300 are made available through the Fundacion de la Banco Ciudad, used to help create a variety of small businesses, from takeaway food stores to hairdressers. Bekerman, who helped start the project in June 2000, hopes 'to improve the quality of the businesses being created via training'. The Government, she says, 'has given no help at all'.

Barter is also booming -- provoked by, among other things, the Buenos Aires provincial government's payment of its employees in patacones (IOUs) instead of money. At some 30 nodos (trading nodes) around the capital, thousands of people meet to exchange food, household appliances, furniture and services like cleaning and hairstyling. It is estimated that $40 million worth of transactions take place at these barter markets. Sylvia, a barterer at Nodo 11 in the centre of Buenos Aires says its not just the poor who use the barter markets: 'We are seeing more items from once-wealthy households -- there have even been cases of families sending their maids to trade so they don't lose face socially.'