Britannia Radio

What happens when a Western economy dies

The 2001 collapse of the Argentine peso set off an economic catastrophe, saysHARRY UNDERWOOD

If you want to know what happens when a 21st century economy crashes, ask an Argentinean.

When their currency, the peso, which had been artificially pegged to the dollar, had to be devalued in 2002, savers lost 70 per cent of the money they had kept in their bank accounts. With the government forced to default on payment of its huge, unmanageable debt and unable to bail out the banks, Argentina went through four presidents in a fortnight.

Before this disaster struck, in the prosperous 1990s, you couldn't walk anywhere in Miami without bumping into well-to-do Argentines, preppy pastel sweaters draped over their shoulders, spending their easily earned dollars in the city's swishest malls. But after the crash, proud, well-dressed people who had nostalgically considered

themselves members of the first world -

 Argentina was once one of the world's 

ten wealthiest nations - 

were reduced to queuing for soup.

With almost a quarter of the population

 forced out of work, 

some skilled factory workers formed 

co-operatives and 

commandeered the businesses that 

had been abandoned 

by their bosses when the economy 

bombed. 

For others, the only way to scrape 

together £10 a week 

was to sell cardboard to recycling plants

 for under 10p a kilo. 

So every night, thecartoneros, a new 

40,000-strong underclass, 

came in from the suburbs with trolleys 

and scoured the streets of 

Buenos Aires. All this in a city once 

called the Paris of the South.

Crime - and sales of self-defence 

courses and burglar alarms - 

soared. Copper from phone lines, aluminium from traffic lights and even the bronze 

plaque on a -1-3    

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