Sunday, March 15, 2009

Don't cry for me, Argentina: an exploration of our South American neighbor

Presented to the Club in 2008 by Michael A. Shirley

Jean, my wife, and I have been going to Argentina for the last four years. We spend two months there in our winter. I’ve traveled and worked in a number of countries in my life so to keep going back to the same country four times should mean that it is an interesting place and has something to offer. This evening I should like to share that with you by appealing to the tourist in you as well as the economist, historian, sociologist, politician and observer of world trends. I hope you will be entertained.

Firstly Argentina is on our doorstep. Well not geographically but developmentally. Although in our hemisphere and eight hours by plane from Miami, it was inhabited by indigenous Indian tribes and discovered by Europeans about the same time as North America so we have much in common. But while we have advanced to become the major super power Argentina has spectacularly prospered, being ranked at the end of World War II as the fourth richest nation in the world only to fall back amongst the pack through one economic crisis after another, the last of which in 2001, the largest default the world has ever known, has in this era of globalization led me and many foreigners to explore this fascinating country.

Argentina is the second largest country of South America after Brazil and the eighth largest country in the world. Argentina is a plain, rising from the Atlantic to the Chilean border and the towering Andes peaks. Aconcagua (22,834 ft.) is the highest peak in the world outside Asia. Argentina is also bordered by Bolivia and Paraguay on the north, and by Uruguay and Brazil on the east. The northern area is the swampy and partly wooded Gran Chaco, bordering on Bolivia and Paraguay. South of that are the rolling, fertile Pampas, which are rich in agriculture and sheep- and cattle-grazing and support most of the population. Next southward is Patagonia, a region of cool, arid steppes with some wooded and fertile sections.

Who were here when the first Europeans arrived? There were Indian tribes about whose history is little known. The main group in the North were the Guarani tribes.The traditional range of the Guaraní people is between the Uruguay River and lower Paraguay River in what is now Paraguay, the Corrientes and Entre Rios Provinces of Argentina, southern Brazil and parts of Uruguay and Bolivia. They are still there today but European colonization has reduced their dominance which has been diluted by intermarriage resulting in the term, mestizos. However the language is widely spoken across their traditional homelands most notably in those areas bordering Paraguay where it is used amongst all classes and ethnic groups as a symbol of national distinctiveness, and is an official language.

The other noteworthy tribe is the Mapuche who live mainly in Chile but have in the past spilled into Southern Argentina. They have fought against Spanish incursions for 300 years & have resisted Spanish & Chilean expansion in recent times but the European has proved unstoppable so that their lands have shrunk under pressure from mining & agricultural companies. Encouragingly today their language thrives and with a new found pride they are fighting for their rights in the courts with more success in Chile than Argentina. Little is known of their pre-Columbian history except they successfully resisted many attempts by the Inca Empire to subjugate them, despite their lack of state organization. And as an aside interestingly enough an analysis of their chickens’ DNA link them to Polynesians.

Back to Argentina, actually Buenos Aires for the foundation of that settlement was a key historical event in the future development of the country and that also affected Uruguay and Chile, Latin America’s Southern Cone. The main Spanish foothold, wealth and administration was centered in High Peru around the middle of the 16th century when they defeated the Inca Empire. The famous Potosi silver mines were “the stuff of their dreams”. In short, the conquest and population streams developed by the Spaniards left from three different places: Higher Perú, Chile and Asunción del Paraguay. From Higher Peru, the cities of Santiago del Estero (1553), Tucumán (1565), Córdoba (1573), Salta (1582), Catamarca (1583), La Rioja (1591) and Jujuy (1593) were founded. The stream leaving from Chile founded the cities of Mendoza (1561), San Juan (1562) and San Luis (1594). And the one leaving from Asunción del Paraguay, founded Santa Fe (1573), Buenos Aires (1580) and Corrientes (1588). The Indian resistance prevented these streams from settling down in the South.

The first settlement in 1536 which Pedro de Mendoza founded when he sailed up the Rio Plata never really established itself because of the relentless Indian attacks. It wasn’t until 1580 that Juan de Garay managed to establish a permanent settlement. Yet the city was unable to take advantage of its wonderful situation, on the magnificent estuary of the Rio Plata and with easy access to the Atlantic Ocean. In the Spanish Empire it was believed that wealth primarily consisted of gold and silver and Buenos Aires had neither. Before 1610 it was little more than a village with roughly 500 inhabitants, castaways in a double sea, the Pampas which they dared not explore because they knew little beyond the outskirts of the city and the Rio Plata which flowed into the Atlantic.

The Spanish commercial system in the mid-sixteenth century relied on fleets or convoys escorted by warships which sailed twice a year from Spain to avoid the pirates and British. They traveled between Cadiz mainly and the isthmus of Panama, where they would unload their goods to be transported to Panama City on the Pacific coast, reloaded on to ships for a port near Lima and distributed through Peru. The port of Buenos Aires was neglected and registered ships, the only ones allowed, were scarce.

Buenos Aires turned to the nearest ready source of wealth, viz. Brazil, which under the Portuguese was a rich colony but not allowed to trade with the city so smuggling became the main activity. To provide barter and money to obtain smuggled goods a bizarre practice sprang up, a practice which was a precursor of future Argentina’s major industry. Livestock in the countryside around Buenos Aires had been reproducing on an extraodinary scale so groups called vaquerias were set up to slaughter the unclaimed cattle nicking their Achilles tendons & slitting their throats just to obtain their hides leaving the rest of their bodies to the wild dogs & rats which plagued the Pampas. However the vaquerias were important because they gradually began to establish political boundaries.

Of course the issue that must be running through your minds at this stage is the comparison between North and South America. Both Britain and Spain were desperate to hang on to their colonies. In 1776 Britain was losing its grip and the game was almost up. Spain meanwhile was not faced with such determined or organized opposition but she needed to find a more effective way to administer the enormous area under her jurisdiction. That same year the Viceroyalty of the Rio Plata was formed which placed a vast area including Alto Peru, Lima, several well established cities like Cordoba, Mendoza (previously ruled from Santiago in Chile) and Ascuncion, the first city to be founded in what was to become Paraquay. This catapulted Buenos Aires into major prominence but set the scene for the subsequent endless battles, literally, very often, with other cities and jurisdictions.

The formation of the Viceroyalty of the Rio Plata marked the beginning of a prosperous period. Trade expanded enormously with ships arriving from Europe and North America, including whalers. Porteno, the name given to Buenos Aires, trading houses sprung up. Immigration increased mostly from Spain but also Italy, France and other countries.

This period did not last long enough as conflicts between neighboring cities, thoughts of independence from Spain, the French Revolution, turmoil in the monarchies of Europe brought on by Napoleon and English invasions interrupted this prosperity.

In 1806 the English from a base on the other bank of the Rio Plata, now part of Uruguay, mounted an invasion of Buenos Aires only to be repulsed. They returned the following year but with the same result. Oh, Calamity of Calamities, said the English and probably many Argentines too in later years! (Please forgive the jingoism!)

There were repercussions and sequelae. The city gained in prestige, it’s administrative structures suffering no damage and managing to retain the respect of the provinces. Its military reputation soared. The Spanish regiment stationed there was really not interested in fighting so an army of locals was recruited especially before the second assault. The English were not novices but fighting men of note especially in their battles with Napoleon. The people’s courage and enthusiasm won the day. And finally the Spanish King’s Representative had been overthrown, an unprecedented event in Spanish imperial history. That Representative, by name Raphael de Sobramente, had followed to the letter instructions which ordered the Viceroy in the event of a foreign invasion to safeguard royal funds along with those of private individuals and to flee which is precisely what he did.

The year 1810 resembled those years leading up to the establishment of the North American constitution. The May Revolution saw various sectors of society with different ideas for the fate of Argentina come together. Some wanted independence from Spain, others, particularly loyalists especially in the provinces advocated a “wait and see” approach while all debated a new concept, that people could choose their own rulers. The old idea that power lies in the crown because it is legitimately given by God was complicated by the fact that the crown had been snatched from the rightful king. This was all revolutionary stuff. Meanwhile criollo (those born in South America not Spain) power was increasing in the legal and military arenas. Military corps were formed depending on their origins, Galicians, Catalans, Arribenos (citizens from the north), mestizos, Blacks. In general over the next 70 years Argentina was evolving to its present shape. The major problem was the relationship between the progressive more sophisticated Buenos Aires and the outlying provinces which were often run for periods by caudillos (little dictators) while at other times by citizens’ councils. The conflicts and civil wars of the years before 1860 were appalling. Leaders were overthrown or assassinated. Prominent men tried to introduce a constitution to unite the areas into a nation. Interminable arguments centered around whether Buenos Aires should be given the capital, much resisted by those Portenos who wished it to remain the capital of Buenos Aires Province. They did not want to see it given up to the nation. Along the way Argentina formally declared independence in 1816.

Suffice it to say that in these years leading up to the end of the 19th century Argentine society was becoming recognizable as we know it today and the significant events occurring in the rest of the world were coming to bear on that society.

The period from 1880 to 1910 was called the Belle Epoque, characterized by peace in Europe( the last war being the Franco-Prussian War of 1870), France resuming its prominent position, Britain becoming the dominant world power and Germany not yet in a position to put the fear of God into rest of Europe. I might add that from a Latin American perspective the United States was seen to be pursuing an aggressive imperialist policy with its occupation of Cuba, the Phillipines and Puerto Rico and encroaching on Pan-American affairs.

Unlimited progress, the elimination of nationalist movements, the lessening importance of religious ideologies, free capital movement and widespread immigration were all cause for reasonable optimism. Argentina went from a country with fairly promising prospects and valuable natural resources but lacking a capital city or a State apparatus, a country in which a third was occupied by Indians and which had no currency of its own and no importance in world markets, to the most advanced in South America with a significant degree of importance in the world’s investment, production and consumption. It boasted an extensive railroad network. Its education system was admirable and it possessed a sizable middle class giving it a stability it had not previously known. The rather conservative regimes of this period relied on the principles of immigration, education and peace. Immigration was not discriminatory. An emphasis was placed on primary education and a deliberate effort was made to avoid wars with neighbors.

The country took advantage of the technology of the time. Just as barbed wire transformed the Mid West so too it did the same in the vast Pampas, defining property limits and lots for pasture, and with delineating cattle from crops. The Australian wind-pump made water available everywhere and steam seed drills and combined harvesters made an appearance. The other key invention that changed the face of the Argentinian countryside was cold storage. The first refrigerated ship left for Europe in 1879 and soon the demand for tasty, fattier beef spurred crossbreeding of cattle.

In 1910 Argentina was talked about in El Dorado terms. In a very favorable environment a transplant of European civilization had been achieved (Buenos Aires was called the “Paris of Latin America”). And yet the transformation to an orderly, just democratic society did not go smoothly just as you might point out it did not in Europe either. An outstanding problem with Argentinian public life still evident today is the politics of the pact, agreement and alliance. Politics is more about personalities than policies. Yes, this has its uses in avoiding conflicts and confrontations but it did give rise to an illusory and deeply immoral electoral system. Great store was placed in the adoption of an Election Law in 1912 which enfranchised men.

I can’t bore you with the details of Argentinian life until 1943 when the name Peron becomes familiar but I can give you an overview of events and trends. Until 1930 parliamentary politics reigned with identifiable parties, Conservatives and Radicals, but elections were rigged, electoral fraud was rife and the concept of a loyal opposition did not exist. Besides the worldwide Depression hit Argentina as it did everywhere else. The Government announced that they would protect their sources of wealth in order to tackle the crisis and reconstruct the economy. As it happened this wealth belonged to the men in government, the big cattle breeders and farm owners, the people involved in the international meat trade and this was of pivotal importance in overcoming the crisis. The poorer peoples’ suffering was of a lower priority. There was a good side. Rural unemployed moved to the cities and founded small businesses, workshops, textile mills, etc. In 1930 the convoluted politics gave rise to an Army intervention, the first time a national constitutional government had been overthrown. The Army allowed conservative interests to rule, to pursue further accumulation of their riches and ignore the common good. No one seems to remember the date of this military coup and there exists a vague unease and a feeling that it was a despicable moment in Argentinian history.

However the Army was back in 1943. The soil was fertile for some sort of totalitarianism. Its success in Europe may have been blunted in the War but many Argentinians looked forward to the defeat of England and America especially because of its dependence on the former. They saw a way to become the dominant player in Latin America. Democracy did not have a good name because of vote rigging and electoral fraud. A silent workforce had grown up employed in factories and workshops around the cities enjoying high salaries, special status and full employment, a rare state of affairs in Argentina. It backed a national ideology with no political party to represent it but was prevalent in the military and upper classes. It wanted to defend national industry, reduce its dependence on Britain and feel more in control of its own affairs. Besides General Franco’s successes in Spain were an inspiration. With confusion reigning in the political arena and an army clique without a clear idea of what it wanted thrust into the limelight the country appeared leaderless. Great pressure was being applied to abandon their neutrality in the War but the army clung to it as a matter of principle (and it might be added as a matter of sympathy for the Axis). Finally in March, 1945 towards the end of the War they were forced to declare war on Germany and Japan, a prerequisite to join the UN.

The Army’s stock was very low. But there was one thing they could salvage: Juan Peron’s record at the Department of Labor. He had assiduously courted the unions, raising wages, making plans to increase workers’ rights and most importantly organizing unassigned workers into new unions. However his power base was a threat to all the authorities including the US. But despite this, arrest and detention he emerged to win a close election in June, 1946.

His ascent may or may not have filled a void but here was something new. His political language was different, no party agenda other than “social action”, that the State should play a stronger role in the economy, the underprivileged should be helped and while no one quite knew what his totalitarian views were he was helped by often being seen with his wife, Evita, a radio actress and a household name of whom he was very proud. Besides the other side the Democrats were discredited.

What did Peronism mean in the nine years that Juan Peron ruled? It was nationalistic, statist & autarkist, i.e. patriotic, the State to control the economy & the country to be self-sufficient. Argentina’s considerable monetary reserves were whittled away by 1951 retiring a not very big foreign debt, nationalizing foreign companies and vastly increasing the number of civil servants. The country could be self-sufficient right after the war but as nations picked up their economies that became unsustainable, competition for exports increased, investment in nationalized utilities companies lagged and inflation priced their goods out of markets.

He became increasingly dictatorial buying up all the radio stations, starting government newspapers and harassing the opposition even with imprisonment. Evita, an extraordinary woman and the theatrical author of my title, assisted him ably by establishing contact between the government and the workers’ movement through the unions, by leading the Peronista Women's Party (women were newly enfranchised) and by her fanatical oratory which gave her a certain mysticism. She also ran a very visible social welfare program.

Peron altered the constitution and won a second term in 1951. Why Peron should have gone under in September, 1955 remains a bit of a mystery. His power base was enormous, he controlled the mass media and still won elections and addressed huge crowds. His bankrupting economic policies were being reversed to quite good effect.

However, irrationally egged on by subordinates he began attacking the Catholic Church quite viciously, after Evita’s death it became well-known that he began keeping the company of girls from a secondary school and had an affair with a 14 year-old girl whom he installed in the presidential residence. The public still loved him but they lost respect. A General in Cordoba with no real support began a revolt. Even though the Armed Forces were divided no one stepped forward to defend him not even his own supporters. He resigned and fled to Paraguay. Remarkably the most discredited man in Argentina he returned to power 18 years later.

With time dwindling and your patience possibly becoming exhausted I’ll bring you up to date quickly. My excuse is that Argentina may not be a major player in the world but it is in Latin America which is on our doorstep and is currently becoming an area of concern to the US, witness the populist Presidents in Venezuela, Bolivia and Equador. After Peron a cruel military dictatorship took control in 1976 mostly to counteract a growing group of terrorist leftists called Monteneros. Opponents were tortured in prisons around the nation, executed( a favorite way was throwing them out of airplanes) and life became stifling. The junta miscalculated by invading the Malvinas or Falkland Islands and the British launched a counter attack which partly because of tacit American help won the day. This loss sealed the military regime’s fate. They ignominiously were thrown out.

The recent history consists of vain attempts to get the economy right. In the 1990s to prevent a repeat of the murderous inflation they had experienced the peso was pegged to the US dollar, one for one. It worked for a few years but resurgent inflation unbalanced the strategem so imports priced in dollars became increasingly cheap and exports dear. In 2001 the government devalued the peso by 66 percent devastating the poor and middle classes. One day you had $90,000 or 270,000 pesos in the bank the next 90,000 pesos or $30,000. The government defaulted on its debts. You cannot imagine what a devastating effect this has had on living standards, morale and esteem.

In the last seven years a family, the Kirshners from the Southern Province of Santa Cruz has taken control of the government and overseen fast economic growth, 7-9 percent a year by holding the peso’s value down against the dollar and taking advantage of the record world prices of meat, wheat, soya beans and sunflower seeds. To rein in inflation, again now running officially at 8 percent but unofficially at 20 percent the government has slapped taxes and quotas on exports provoking farmers to protest massively by blocking roads and holding back produce. The finance minister resigned last week. Argentina looks headed for another crisis. “But don’t cry for me, Argentina we’ve seen it all before”. I should point out that the Kirshners and allies all belong to the Peronista Party which still dominates political life in the Federal Capital and most of the provinces making the eternal struggle between a centralist government and autonomous provinces easier to manage. One still does not see much meaningful discussion of policies. It’s still personalities being supported or recruited with their power bases.

I like to dwell on the comparison between the evolution of the countries in North and South America. Was the absence of an overriding port or city in North America a factor? Buenos Aires so dominated Argentina that provinces could not display real independence to negotiate as equals. Was an Anglo Saxon heritage a factor? Spanish colonies have not exactly developed into successful democracies. And yet today’s Spain is undoubtedly one. Discussions I love!

Four years ago I happened to land in this interesting country. In many ways it is a European country, not South American especially Buenos Aires. It is cheap even in these days of a devalued dollar. A two-bedroom apartment costs $2000 or less for the month. A meal in one of the many excellent restaurants never costs more than $35 and that includes the most heavenly steaks (from cattle eating grass on the Pampas), a bottle of superior wine and tip.

The Portenos and Argentinians in the Provinces are friendly, welcoming and keen to show off their magnificent country. Perhaps they are a little fascist but they are wonderful soccer players, currently No. 1 in the world and I watch cricket at old British clubs. Their tennis players rank with the world’s best.

Buenos Aires is a fine city with superb art and cultural museums, leafy parks and plane trees lining every street. The summers, our winters, are warm, sunny and inviting. Then there is Antartica and its glaciers, the Andes, Mendoza where Jean and I go for two weeks to taste the Malbecs and this year we went to the Northwest where there is more of an indigenous Indian culture. We have not yet seen the Iguazu Falls which apparently outshine Niagara.

I have not mentioned such fascinating subjects as the Anglo-Argentinian community (in 1900 300,000 English lived in Argentina), the Jewish community ( large and influential), the Blacks (disgracefully and deliberately rubbed out) and finally the Indians (denied their rightful place).

I would urge you to follow the country’s progress. It is and will be important in our hemisphere and I can bet a visit will be an adventure well rewarded.

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