Cash-strapped Argentines return to bartering system ...

Published Monday, January 21, 2002

                        Cash-strapped Argentines
                        return to bartering system

                        BY FRANCES ROBLES
                        [email protected]

                        QUILMES, Argentina -- Fabio Rodriguez makes inexpensive
                        sandals, cheap slip-ons that he exchanges for tomatoes,
                        clothes or gasoline.

                        Ana Gerieri swaps snow cones for rice.

                        To feed her family, Haydee Paz offers crew cuts and
                        hairstyles. And so it goes for these Argentines, who include
                        a plumber, dentist, masseuse and yoga instructor. They
                        have returned to a centuries-old economic system to endure
                        a modern-day economic collapse: the ancient act of

                        ``This started as a hobby. Now the truth is I don't have a
                        job,'' Rodriguez said. ``In today's market, you can't work.
                        Sales with money no longer exist.''

                        More than one million Argentines are finding a way around
                        their nation's crippling economic downfall by joining barter
                        clubs. What started six years ago in an ecologist's garage is
                        now a means of survival for millions of people suffering the
                        consequences of a financial breakdown that left people
                        without jobs and cash.

                        The founders of a barter fair say they believe Argentina's
                        financial crisis will force bartering to become the paradigm
                        for a new economy. In an country where people with cash in
                        the bank were told they can't spend it all until 2005, there is
                        only one kind of money people really trust: their own hard

                        Rodriguez owned a shoe factory until five years ago, when
                        the recession began in full force. He got by with a repair
                        shop, but customers quit coming. But they still needed

                        ``I come here to calm my nerves,'' said Rodriguez, who
                        takes bartering a step further by driving out to the
                        countryside to trade shoes for good cuts of beef. ``It's better
                        than sitting home watching TV, dying of bad news.''

                        The shoemaker joined the barter fair, where members offer
                        services and goods in exchange for printed tickets called
                        credits. The credits can only be spent at one of Argentina's
                        4,300 barter clubs. A whopping 40 million are now in
                        circulation. Everybody from the travel agents, taxi drivers and
                        butchers outside the closed out factory where the Quilmes
                        fair takes place accepts them.

                        ``This is money that offers no interest, no bank freeze and is
                        worthless to accumulate,'' said Horacio Covas, president of
                        the Argentine Cooperative Commerce Network. ``It's a way
                        to survive, live and dream. We're giving people a way to eat,
                        finding the answers the government wasn't coming up with.''

                        Covas and a group of ecologists began the barter fair in 1995
                        with only a few dozen members. The idea caught on and
                        spread throughout the country, even to municipalities and
                        small companies that ran out of currency to purchase goods
                        and pay staff. Last year, Covas said he formed 10 new clubs
                        a week. Now it's 40.

                        Virtually all the participants are out of work.

                        ``I used to be a cook,'' said Maria del Carmen Valdez, who
                        hawks empanadas. ``Now I sell my food here.''

                        Twenty-five percent of the residents are out of work in
                        Quilmes, where the largest fair is held on Saturdays and
                        Sundays. The self-employed have no customers. And
                        outside Buenos Aires, hundreds of thousands have gone
                        without pay for months because the government ran out of
                        cash for salaries. The economic collapse here that reached
                        a low point with the government's default on Argentina's $141
                        billion in foreign debt and a succession of presidents made
                        the barter trend into one of few viable alternatives for making

                        In December, people took to the streets in protests that
                        ended in deaths and the resignation of President Fernando
                        de la Rua. Demonstrations have continued throughout the
                        country, where banks are frequently burned down by
                        mask-bearing protesters. Even the current president,
                        Eduardo Duhalde, says Argentina is on the brink of anarchy.

                        Covas says he is convinced that lack of work is the greatest
                        fomenter of violence.

                        ``Instead of using energy of anger, this is energy of work,'' he
                        said. ``People here aren't worrying -- they are working. This
                        crisis has been a catalyst for growth. We calculate that by
                        2003, Argentina will be turned into a giant barter fair.''

                        He instituted rules, such as prohibiting the services like
                        prostitution or products such as drugs. Used clothes must
                        be clean and electronics must not be stolen or broken. Food
                        has to be fresh.

                        ``I was a merchant,'' said Orlando Alvarez, who sells bags of
                        eight tomatoes for two credits each. ``Now thanks to [former
                        president Carlos Saul] Menem and his friends, here I am,
                        every day a little worse off.''

                        He admits that it's a little humbling to trade for food.

                        ``This is the way I look at it: When you work, you work to
                        buy food. This is the same thing,'' he said. ``You have to
                        have that mentality. So you bring what you have and find
                        what you need. This is our life now.''

                        Virtually anything is available at the fair, from Alvarez's
                        tomatoes, to lettuce, cooked food, toilet paper and
                        refrigerator repair. Most shoppers said they use it to buy
                        basic necessities like eggs. Merchants peddling luxuries
                        like home improvement services saw few buyers. There's
                        even a beauty salon featuring 10 stylists who do dye jobs
                        but no perms. (There's no running water.)

                        Gerieri's one-credit snow cone business has come to a halt
                        because of too many competitors. ``You don't feel great
                        doing this, but there's no other alternative,'' she said. ``I
                        spent 20 years working hard, and it comes to this: burned