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Argentina's economic disaster

by Jimena Marquez
Today, one in five Argentines lives in extreme poverty as a result of the country's worst socio-economic crisis in living memory. The Red Cross is expanding its relief initiatives to assist the new poor, but should it also develop preparedness programmes to strengthen communities' resilience to these man-made disasters?



In December 2001, popular anger erupted throughout Argentina as people protested against the economic ruin of the country. Thousands looted businesses and supermarkets in search of food. For the first time, the middle class joined in with other vulnerable groups and protested the country's collapse. During the demonstrations, 32 people were killed and hundreds imprisoned.

Argentina, one of the wealthiest countries in Latin America, was once an economic success story. But the situation started going sour in the mid-1990s when emerging markets worldwide collapsed as a result of the volatility of the global financial system. Four years of recession followed, eventually causing the country to default on outstanding international loans and provoking the flight of foreign investment. To stem the crisis, government authorities compounded popular discontent by devaluating the national currency, the peso. This move pushed the country over the brink and into an economic meltdown.

For the Red Cross, the crisis in Argentina is about the millions of individuals either coping with a rapid fall or further descent into poverty. With more people seeking assistance, the Argentine Red Cross is working hard to sustain its programmes and meet the increased needs of the population. But this crisis is not new to the Movement.

Following economic crises in Mexico in 1995, east Asia in 1997, and Brazil and Russia in 1998, National Societies and the Federation were repeatedly called upon to help those most affected by these events. Globally, the Federation estimates that between 1994 and 2000 it assisted 55 million people affected by socio-economic disasters.

With the increasing connectedness of the world economy, it is probable that more such disasters will occur causing further hardship for a large segment of the world's populuation. Knowing this, should the Movement start developing preparedness programmes for these types of crises much as it has done for natural disasters?

Helping the poor

"Economic crises hurt both the poor and non-poor, but they are far more devastating for those already in poverty or nearly poor, even if they are not hurt disproportionately," explains the World Bank in its 2000-2001 World Development Report.

Araceli Villalba knows something about this. She is director of an elementary school in an aboriginal settlement in Chaco, one of the poorest provinces in Argentina, situated in the mountainous north. Some 470 boys and girls between the ages of six and 15, mostly children of brick-makers and crop-pickers, attend the school. These families are already among the poorest in the country, but with the economic collapse their future has become even more uncertain.

"The situation has worsened," explains Araceli. "Children pass out at school because they are cold and hungry. Malnutrition is very common. The kids have viral and infectious diseases, skin diseases and tuberculosis," she adds.

Currently, Araceli is fighting to get free milk supplied to the school by the government. "It is desperate. The national government gives us no assistance and the provincial authorities offer us only a herbal drink."

Health and education are two of the hardest-hit sectors. The World Bank warned in its report that "malnutrition and dropout rates among poor children may rise during economic crisis and natural disasters. Poor households are often forced to sell their meagre assets at depressed prices. These responses are likely to perpetuate chronic poverty." Of?cial ?gures in Argentina bear this out, showing half of the population experiencing some kind of food emergency and one in six children now living in extreme poverty.

Humanitarian organizations, like the Red Cross and Red Crescent, are on the front line of response during national crises such as this. "When people have lost all hope, humanitarian organizations play a decisive role," explains Juan Carr, founder of the Solidarity Network, an initiative in Argentina that puts people in need of emergency assistance in contact with potential donors. At the beginning of the year Juan took part in the humanitarian operation to ship insulin from Spain to Argentina. This operation was coordinated by the Argentine Red Cross, together with other local charities. "It was one of the first dispatches of humanitarian aid. It was an excellent and vital collaboration."

In addition, the Argentine Red Cross, with the assistance of the Spanish Red Cross, is running or financing a number of soup kitchens to tackle malnutrition in some of the most depressed areas of the country. It is also assisting orphanages and day-care centres unable to continue providing services. The Federation launched an emergency appeal earlier this year for US$ 1 million to assist 52,000 beneficiaries.



Argentina's economic decline


October 1998

May 2002

Poverty rate



Poor population



Destitute people



Poverty rate among young people under the age of 18



Destitute people under the age of 18



Poor population under the age of 18



Destitute people under the age of 18



Number of people who become poor every day



Number of people who become destitute every day



Sources: Presidency of the Nation, National Social Policy Coordination Board, Information, Evaluation and Monitoring System for Social Programmes (SIEMPRO).

Getting prepared

The World Bank points out that while economic crises may come in many different forms (fiscal crisis, balance of payments crises, terms of trade shocks, currency crises, banking crises, hyperinflation), their often sudden and catastrophic nature is similar to that of natural disasters. Often there is little early warning, markets and businesses are wiped out in just a few days, creating huge job losses across many sectors. And, as Juan Carr pointed out, it is during crises such as this one that organizations like the Red Cross are needed most.

With one of the Federation's stated objectives being "to improve the situation of persons constantly living in situations that threaten their dignity and socio-economic security, de?ned in terms of 'structural vulnerability'", some people suggest that the Red Cross should consider a more proactive approach to these economic hazards.

"We do not and cannot make up for political failure," says Eva von Oelreich, head of disaster preparedness and response at the Federation. "But we can help people prepare for and avoid exposure to situations that can increase their vulnerability. The main examples are community-based programmes in health, water and sanitation, first aid, HIV/AIDS, disaster preparedness and other risk-reduction programmes." Applying the experience and methodologies used in these other initiatives to devise or enhance programmes to cope with economic crisis seems a good place to start.

But there are those who argue that the Red Cross has enough on its plate trying to cope with new and re-emerging diseases, the increase in the frequency and severity of natural disasters, migration issues and complex wars and conflicts. The reality, though, is that more and more National Societies are being called upon to help the victims of socio-economic disasters. And as Eva von Oelreich points out: "Socio-economic emergencies can be sudden, chronic or hidden. But one thing is sure - their regional and global impact is steadily growing."


Jimena Marquez
Jimena Marquez is Federation communication officer

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