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Crisis in Argentina

             Each evening, thousands of families take to the alleys and boulevards of Buenos Aires to salvage heaps of cardboard and paper. They make about 4 US cents on every kilo collected. In a country where over half the people are in poverty, this is the only way they can put food on the table. A year ago, when Argentina's economy melted and the peso collapsed by 70%, a new industry was born. All over the country, the feeble economy has pushed Argentines into very desperate measures. In what seems like a chapter from the Russian Revolution, thousands of Argentines have saved their jobs by seizing control of debt-ridden factories when the bosses fled. The men of the Union and Force Co-operative occupied their metal work plant for six months, defying the bailiffs who wanted to liquidate its stock and assets. Finally the courts granted them the right to continue running the business themselves. With half of the country's 36 million population in poverty, the authorities are reluctant to use muscle to enforce the bankruptcy laws, which should give creditors priority. Argentina's grain farmers, who have an estimated $1.6bn of soy and maize in storage, are also devising new ways to keep business buoyant. They have recognized that grain has become a much safer bet than the bankrupt country's beleaguered peso. The silos that store the grain have become another sort of "bank". Rather than put their money with the financial institutions, where you don't know what's going to happen to it, people in Argentina keep it as grain in the countryside. People's fields of soy, when harvested, will be priced in US dollars on the global commodity markets. As the peso is worth just a one third of its 2001 value, farmers now has a lot of buying power in Argentina, where farming accounts for half of the country's $26bn in exports. Farmers also have a valuable commodity for bartering with local suppliers, particularly now that the banking sector has been discredited.

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