Crisis sweeps Argentina towards isolation

Argentines have long fretted about their position at the edge of the world. Now, immersed in the worst economic crisis in their history, they are worried they might drop off altogether.

Geographically the country may be almost a stone's throw away from Antarctica. But during the 1990s the miracles of global capital appeared to bring Argentines closer to the northern hemisphere. Carlos Menem, then president, declared Argentina to be a part of the First World.

Its links to the developed world certainly intensified over the past decade. Dozens of daily flights linked Buenos Aires to the US and Europe. Investment in telecommunications made phoning London or New York as easy as calling next door. Buenos Aires boasted impressive broadband connections and internet usage boomed.

A dollar-pegged currency and open markets made imports cheap and plentiful. Supermarket shelves were stocked with the same goods as European cities. The supermarkets were often European.

The newspaper stands on Florida Street, at the heart of the cosmopolitan capital, were stocked with foreign titles that arrived the same day as in their home markets on the other side of the world.

During the past decade Argentina was perhaps the most frequently cited example of the power of globalisation to bring nations together.

Now Argentina is moving in the opposite direction, falling into isolation despite its best efforts. It is a stunning example of globalisation in reverse.

In January it defaulted on its debt and devalued the currency. Many products that Argentines had taken for granted disappeared or have become prohibitively expensive. Disposable nappies, for example, are so costly that mothers from low-income households use washable ones.

The symbols of 21st century globalisation are starting to look like relics, while products that disappeared a generation ago are returning to haunt the present.

Many foreign companies, such as the Home Depot do-it-yourself group and the Wendy's hamburger chain, that once made Argentine cities look much like north American ones have gone. Television is also changing fast. Sky TV is leaving and CNN was temporarily suspended after devaluation.

The end of the dollar peg and the 70 per cent plunge in the value of the peso since January have halted the national passion for travel. Now foreign trips are beyond the means of all but the wealthiest Argentines, those who held their savings in dollars and in offshore banks.

International airlines have scrapped direct flights to the US and Europe or drastically cut their frequency. The only new route planned by a main airline is to Washington, home to the many multilateral institutions negotiating aid for Argentina.

Even flying to another country at the end of the world is becoming difficult: Qantas dropped its flights to Australia this year.

Phoning is no better: the country's telecommunications network is decaying as foreign-owned phone operators, such as Spain's Telefónica, halt investment. International phone calls take longer to be connected and will soon be priced out of reach of most Argentines if, as planned, they are charged in dollars.

Even the internet, which was supposed to make the distance between nations irrelevant, is deteriorating. Users say connections are slower and less reliable and operators say they cannot import parts to maintain the networks.

And the foreign magazines at the kiosks on Florida Street are looking increasingly frayed. "We always had whatever title you wanted," said María Inés Freire, whose company distributes many foreign titles in Argentina. "The kiosks were overflowing with foreign newspapers and magazines. That no longer happens. We are isolated."

Argentines who used to be versed in world affairs find there is a growing gulf between them and their foreign friends.

Carolina Barros, a public relations executive, said she has had to abandon subscriptions to The Economist and Wallpaper magazines since their price in pesos soared. "Wallpaper is more expensive than an Argentine coffee table book. I feel like I'm being isolated from the world.

"We Argentines always felt we were a touch above other Latin Americans," said Ms Barros. "Now we find we're at the bottom of the pile. I e-mail a Brazilian friend and I feel like we're from a different continent. They'll say they're installing hardware on their computer that we can no longer buy. In less than a year we've managed to erase the progress of an entire decade."

Once i read that Argentinos are mainly Spaniards and Italians, but without Europe. (Indeed the title of the article was "Argentina or the Italians without Europe"), meaning that they have great potentials but need an unrelenting watchdog, since fiscal rectitude, wise planning and , ultimately, "calvinistic" mentality is what they lack.

They had the unrelenting watchdog in the form of the IMF. This is the main part of the problem. That and the huge debt that was foisted on them by their leaders. When the money is all gone, how can there be anything but isolation? People won't sell to you and you can't afford to buy.

You have to lift yourself up by the bootstraps and start all over. Argentina is a living example of a country that has suffered complete monetary collapse. Any number of countries are vulnerable to the same, including our own, if the conditions are right. When your corruption and businesses become so fragile that foreign investment is driven away, things change rapidly.

Thank you for the ping.

"We Argentines always felt we were a touch above other Latin Americans," said Ms Barros. "Now we find we're at the bottom of the pile.

Bump!

You can't run a country with socialistic leftists in charge and the Peronistas still are in charge. The worst political system in the world was devised by the Perons and Evita (an early version of Hitlery), ruined the country for decades. It is very sad to see Argentina fail over and over. I love the country and the people, but despise their political ineptitude.

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