Argentina: a life of boom and bust
Crisis after crisis has made Argentina the only nation ever to regress to developing country status. The FT provides a glimpse of daily lives overshadowed by constant economic turmoil and asks: can Argentina finally break the cycle of boom and bust?
Executive Producer: Vanessa Kortekaas. Reporter: Benedict Mander. Camera Operator: Ben Marino. Video Editor: Silvia Biagioni. Additional footage by Nico Mu, Reuters. Graphics: Russell Birkett.
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A century ago, Argentina was one of the 10 richest countries in the world. But it has earned the dubious distinction of being the only nation ever to regress to developing country status.
Argentina has had a major economic crisis roughly once every decade in the last half century. So hyperinflation, devaluations, and IMF bailouts have all become facts of life.
So what is it like living in a state of almost constant economic turmoil? And after signing up to the biggest bailout package in the IMF's history, can Argentina finally break free from a cycle of boom and bust?
2018 has tested Argentines' patience. In September, workers took to the streets to protest inflation that has soared above 40 per cent, a currency crisis that has cut the peso's value in half compared to the dollar, and the government's latest loan from the IMF.
President Mauricio Macri has been applauded for his reforms to cut the fiscal deficit and tackle inflation. But signs of a downward economic spiral are all too familiar here. Volatility has defined Argentina's recent history. And memories of the last severe crisis in 2001 are still fresh.
Before the economic crisis of 2001, Luis's taxi licence was worth about the same as a 500 sq ft, one -bedroom apartment in Buenos Aries. But in 2002, after a three-year long recession, Argentina ended a decade-long peg to the US dollar.
Bank deposits indexed to dollars lost more than 70 per cent of their value, wiping out people's savings almost overnight.
Luis was forced to return to the family business at the San Telmo Market, where they have worked since they arrived as immigrants from Italy in the 1930s. Together with his siblings and mother, they also run two hostels, all to help make ends meet.
The Amitrano family have found ways to survive repeated economic crises. But the country as a whole has been left psychologically scarred. In 2001, a lethal cocktail of excessive state spending and borrowing, a flawed currency regime, and volatility in emerging markets, led to the catastrophic failure of an IMF rescue programme.
Argentines have not forgotten the grinding recession, social chaos, and acute political instability of those days. The problem is that in Argentina history has a way of repeating itself. This year the government turned to the International Monetary Fund for help again. They secured a $57bn loan, making it the biggest bailout package in the IMF's history.
Recent volatility in emerging markets, triggered by rising US interest rates and a looming trade war with China, exposed the vulnerabilities of Argentina's gaping fiscal and current account deficits. And when foreign investors were no longer willing to lend to Argentina, the government was forced to seek financial backing from the IMF yet again.
But successive crises and more than a dozen bailouts from the IMF have made Argentines doubtful of the government's ability to break the cycle of economic gloom.
Las Pipinas, about a two-hour drive southeast of Buenos Aries, has been zapped by three successive economic crises. One in the 1970s, which led to the closure of its railway station. Again in 1989, which was followed by a neoliberal stabilisation programme that led to the removal of fuel subsidies for the town's main employer, a cement factory. And the 2001 crisis, which forced the factory's closure.
Claudia Diaz co-founded a co-operative in Las Pipinas after the cement factory closed and people were desperately trying to find a new way of life.
Las Pipinas isn't the only place where ordinary Argentines are trying to fill a void left by what many see as a failure of the state to manage the economy and create opportunities.
Father Lorenzo De Vedia - or Padre Toto, as he is known - has been preaching in these slums for almost 20 years.
Back in the centre of Buenos Aries, the message from government officials contrasts sharply with discontent among ordinary Argentines. But can this government deliver real change that ends the cycle of boom and bust?
President Macri's fiscal discipline is a novelty in Argentina. He signed up to an unpopular IMF-backed austerity drive in the year before an election and is aiming to balance the budget by 2019, potentially derailing his chances of remaining in office.
Although he swept to power on the promise of delivering change, whether his government succeeds in making Argentina a more stable country depends on Argentines' patience with those reforms.