Father Guillermo Torre, known as Willy to his parishioners, has been through this before. “I arrived here 20 years ago in 1999, right before the economic collapse of 2001,” he said.
“Here” is Villa 31, a giant slum that sprawls beside the luxurious Recoleta and Retiro neighbourhoods of central Buenos Aires, a city within a city of which Torre is the parish priest. “Back then Villa 31’s population was 12,500; now it is 45,000,” he says, accepting a constant stream of greetings and hugs from recuperating addicts arriving at his drug rehabilitation centre.
Torre’s ever-expanding parish reflects the gulf that has opened in Argentina over the past two decades between the haves and the have-nots.
Far from shrinking, that gap has widened during the current government of conservative President Mauricio Macri, whose Cambiemos party suffered a resounding defeat in open primaries last Sunday.
Macri lost by 15 points to the populist Frente de Todos ticket of Alberto Fernández and Cristina Kirchner, the fiery and popular two-time former president who has survived countless corruption investigations to dash Macri’s hope of re-election in the presidential elections this October.
Torre said: “Here, 70% of the people voted for the Frente de Todos, which shows the impact of the economic crisis not only on poor people but on the middle class as well, because people here who worked an eight-hour day as domestics in city homes are now only working four hours, because the middle class can’t afford a full day any more.”
Following a sustained reduction in poverty during Kirchner’s years in office, from 2007 to 2015, some 2 million people have fallen below the breadline since Macri took office, statistics from Argentina’s Catholic University show, jumping from 29% to 35% of the population.
The Catholic church is deeply concerned about the growth of poverty in the home country of Pope Francis. Before becoming pope in 2013, Jorge Bergoglio, then a cardinal, lived an austere life, with a firm commitment to Argentina’s poor and marginalised. Bergoglio was a familiar figure in another giant Buenos Aires shanty town, Villa 21-24, to which, as the city’s archbishop, he travelled by bus and on foot to say mass once a week.
Rodrigo Zarazaga, a Jesuit priest and political analyst connected to Pope Francis, believes Macri suffered this unexpectedly harsh defeat because the millionaire businessman had lost touch with Argentina’s reality.
“Argentina suffered a social big bang and now lives in two separate galaxies hurling away from each other: the galaxy of the poor, informal workers collecting social aid who live in shanty towns; and the galaxy of people with formal employment, medical insurance and private schools,” he said.
An expert on the political workings of the greater Buenos Aires Area, where about a third of Argentina’s population are crammed into 0.5% of its territory, the Jesuit believes Kirchner outwitted Macri by winning the support of Sergio Massa, a third-party candidate who came in third with 21% of the vote in the 2015 presidential elections. Despite rumours he might run as Macri’s vice-president, Massa finally opted for a seat in Congress on the Fernández-Kirchner ticket.
Macri seems to have underestimated Kirchner’s political acumen, assuming that she, a once-fiery, polarising president who delivered lengthy speeches on television, was relishing the prospect of a return to the highest office in the land.
Instead, Kirchner stunned the nation by handing the presidential slot to Peronist moderate Fernández, who had resigned from Kirchner’s government in 2008 to become a critic of her populist style. She reserved the vice-presidential candidacy for herself.
Although there is little doubt in people’s minds that it is Kirchner who will call the shots if her party is elected, the implication that her bravado will be kept in check by Fernández’s even temper seems to have convinced middle-class voters.
“Kirchner kept her share of votes among the poorer people, got 2.5 million votes of the lower middle class from Massa, and the vote of the troubled middle class from Fernández,” said Zarazaga.
Fernández is also linked in the public’s mind to the economic turnaround during the 2003-07 government of Néstor Kirchner, in which Fernández was cabinet chief. Cristina Kirchner’s husband, who died of a heart attack in 2010, successfully steered Argentina out of its 2001 economic debacle, when the country defaulted on its massive foreign debt, poverty rose to 54% of the population, and the currency collapsed.
That crisis plunged Argentina into chaos as savers’ accounts were frozen to stop a run on the banks. Dozens died in violent protests and supermarket looting. Today, the whiff of an economic meltdown is again in the air. Macri’s defeat shook the financial markets and sent the peso tumbling, losing 25% of its value against the dollar and adding fuel to Argentina’s already steep inflation rate, the third-highest in the world after Venezuela and Zimbabwe.
Macri, a millionaire businessman, is paying a heavy price for failing to deliver on his emphatic promise of zero inflation and zero poverty when he took office in December 2015. Inflation hit 54% over the last 12 months, twice the rate when he took office. Foreign debt has also more than doubled, after a loss of investor confidence in emerging markets forced Macri to seek a $57.1bn rescue package from the IMF last September, the largest loan it has ever handed out.
Prices rocketed last week; retailers are battling a deadly combination of inflation and devaluation, which makes it impossible for them to keep pace with the crisis. In one day, the price of a macchiato in the trendy coffee shops of Palermo Soho in the capital rose by nearly 25% in pesos, while at the same time dropping from $1.78 to $1.58.
Juan Grabois, a social leader who also has close links with Pope Francis, heads the Movement of Excluded Workers (MTE), a large alliance of people without formal employment. According to him, Argentina’s “new poor” – street sellers, trash rummagers – total about six million people.
Grabois agreed that Macri’s Cambiemos party had lost touch with the dire situation of Argentina’s poor workers and middle class. “Now we are facing a crisis similar to the one in 2001,” he said.
The only reason Argentina hasn’t descended into the popular unrest and supermarket lootings that marked that crisis is due to the social aid programmes put into place by Kirchner’s government. Although these were heavily criticised by Macri’s party, the president himself has tripled the amount of social aid being handed out to stave off unrest.
“The aid only lasts those who receive it to the middle of the month, with luck, but that’s enough to keep them waiting until the start of the next month rather than taking to the streets,” Grabois said.
Grabois criticised as insufficient a string of measures announced by Macri over the course of last week: a reduction in taxes on wages and on essential food items, price controls and the freezing of mortgage payment instalments. He also questioned Macri’s chances of making it to the end of his term this December.
Torre, the parish priest in Villa 31, said: “Social aid is why people have withstood so far and in a way it’s better if it prevents a repetition of the upheaval in 2001.”
Grabois said: “If Macri’s government survives it will be with the support of us, his social and political opposition. We will support him to avoid an institutional crisis.”
Grabois would have liked to see Kirchner stand as president, and was disappointed that she abdicated her candidacy in favour of Fernández, who is expected to respect Argentina’s commitments with the IMF. “Fernández is a very honest, conciliatory candidate, who will help Macri conclude his term safely and will then try to solve the country’s financial and debt problems the most rational way possible. But if the IMF destroyed so many countries, why should our people have to pay for nearly $60bn the IMF placed here? I think the IMF has to be made responsible for this loan. You can’t make a whole country responsible for the international technocrats who ruined our lives.”