The Miami Herald
January 21, 2002

Cash-strapped Argentines return to bartering system


 QUILMES, Argentina -- Fabio Rodríguez 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, Haydée 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 bartering.

 ``This started as a hobby. Now the truth is I don't have a job,'' Rodríguez 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 work.

 Rodríguez 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 shoes.

 ``I come here to calm my nerves,'' said Rodríguez, 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 María 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 purchases.

 In December, people took to the streets in protests that ended in deaths and the resignation of President Fernando de la Rúa. 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 Alvárez, who sells bags of eight tomatoes for two credits each. ``Now thanks to [former president Carlos Saúl] 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 Alvárez'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 out.''

                                    © 2002 The Miami Herald