Murder, drug cartels and misery counter Argentina's claims of falling poverty
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Version 0 of 1. The gangland murder of four youths in a notorious slum in the south of Buenos Aires came as little surprise to residents. The victims of last April’s attack had each been shot in the head by hitmen amid an ongoing turf war between rival gangs. Known as “villas miserias” – literally, “slums of misery” – the sprawls of redbrick shacks that punctuate the Parisian-style architecture of the Argentinian capital have become synonymous with violence. These marginal neighbourhoods have little or no state presence to oppose the growing influence of drug cartels. Despite often being located in urban centres, most residents do not have access to mains electricity, running water or sewers. In 2013, the NGO Techo identified 1,834 of these informal settlements across Argentina, saying they were home to 500,000 families. In Buenos Aires alone, the number of people living in villas miserias grew by about 50% between 2001 and 2010. These fringe communities have become the focal point of the fight against poverty in the South American country, with investment from the government and NGOs focused on providing basic services and integrating them into wider society. After Argentina’s devastating debt default in 2001/2, a boom in social security spending did much to sustain high growth rates. But the success of these social programmes has been threatened by another default and an inflation-inducing currency devaluation last year. This bleak picture seems to sound a false note given the government’s claims that Argentina has one of the lowest poverty rates in the world. At a UN Food and Agriculture Organisation summit in Rome in June, President Cristina Fernández de Kirchner said the poverty rate was now lower than 5%, compared with a crippling 54% in 2003. When Aníbal Fernández, head of the Argentine cabinet, was later asked on national radio if the country had truly achieved a poverty rate lower than, say, Norway, Denmark and Germany, he replied: “Yes, although you might not like it and it is difficult for you to accept. Countries like Germany are having a difficult time with poverty.” Even discounting the fact that poverty rates in Germany and other European countries are based on different calculations, the validity of figures published by Argentina’s Indec statistics agency has long been challenged. “In terms of ‘fiddling the figures’, the [Fernández presidency] has considerable form – from cooking the books on inflation, to massaging growth data and … fudging poverty data,” said Colin M Lewis, professor emeritus and Argentina expert at the London School of Economics. “A regime that presents itself as a champion of the poor has even more reason than most for making exaggerated claims about poverty reduction, particularly as inflation accelerates and a decline in the rate of inequality appears to be stalling,” he added. It is widely acknowledged that Indec has long published an artificially low consumer price index (CPI). Private economists estimate inflation at more than 25%, while the government has said it is about 15%. But despite evidence of creative accounting, there has also been real progress in tackling poverty, some analysts say. “The reason why the president has high approval ratings of around 50% is that many people have seen their living standards rise – unemployment is low and average wages have risen faster than prices during her tenure, even when you use the estimates of inflation favoured by the opposition,” said Paul Segal, a senior economics lecturer at King’s College London. Argentina measures its poverty rate by calculating the number of people who cannot afford a basic basket of goods and services, such as education and housing. This basket is directly linked to the CPI, which statisticians say can lead to abuse. “If inflation is high, the basket value increases, and therefore poverty increases. This is politically inexpedient for a president whose election, and continued popularity, is partially grounded in a promise to reduce poverty,” said Christopher Wylde, associate professor of international relations at Richmond, the American International University in London. “Manipulating the official inflation rate serves a wider set of priorities, and its impact on poverty data could be interpreted as somewhat tangential. These wider priorities include: lower repayments on inflation-indexed bonds, better gross domestic product data … the impact on the real effective exchange rate and the concomitant impact on balance of payments through the trade channel, and a better bargaining position with unions, who use inflation data to negotiate pay increases,” Wylde said. An independent study by the Universidad Católica Argentina, released in April last year and using more realistic CPI data, reported a poverty rate of roughly 26% in 2013. Away from the rarefied air of pure statistics, in the low shacks of the villas miserias, people echo the charges of official exaggeration and manipulation, grounding their anger in daily deprivations. “In our neighbourhoods, entire families are homeless and there’s no drinkable water. Where is this ‘reduction in poverty’?” said Viviana, an NGO advocate who works in a slum in the gentrified barrio of Retiro in Buenos Aires. She did not want to give her last name for fear of harassment by the authorities. “It’s a joke that the president would announce that [poverty rate] to the world. That number, so untenable to the Argentine eye, is something she’d never say to the people who live in las villas miserias. That’s only something she could have said in Rome.” Indec has agreed to reform its methodology on measuring inflation and poverty but, given that no fresh data on poverty has been published since December 2013, it seems unlikely anything will change before legislative and presidential elections in October. Fernández, whose Front for Victory party has held power since 2003, is barred from standing for a third consecutive term. With persistent economic instability, fears about the prevalence of drug cartels and a creeping fiscal deficit, the ghosts of 2001 haunt every Argentine politician. |