Even amid economic woes, Argentines live it up

Kicking back at a trendy Buenos Aires bistro, Federico With and Diego Castro look marvelous.

And looking good, whether or not they are feeling good, is an art many residents of the world's ninth-largest city take seriously. The Argentine capital boasts more plastic surgeons per capita than nearly anywhere else on the planet. Even street performers who dance the melancholy tango wear designer-label suits and skirts.

But feeling good has not been easy lately. Unemployment stands at 15 percent, personal savings have been clobbered by currency devaluation, and food shortages have led to rampant malnutrition.

Despite the bleak numbers, many Argentines are in surprisingly good spirits. On a warm Thursday night in late summer here, Messrs. With and Castro have joined thousands of other Portenos, as the Buenos Aires locals are known, in the fashionable Las Canitas neighborhood, where nightspots are packed with diners intent on dancing the night away.

"These days, it doesn't do me any good to save my money, because it could lose its value again at any time," says Castro, an accountant. "I am living for today."

This kind of attitude has always suited Argentines. It has provided them a way to forget their troubles - a military dictatorship in the 1970s, hyperinflation in the 1980s, today's economic stagnation.

But while some say a history of throwing caution to the wind has helped breed decades of government mismanagement and corruption, it has also created a rugged self-reliance that is helping the country weather its latest storm.

"We have had crises here before, with the military and others," says Juan Pedriel, a hotel manager. "But Argentines are very good at adjusting."

Argentines have been doing a lot of adjusting over the past year or so. Banking restrictions, implemented in December 2001 to limit withdrawals, have been lifted, and people once again have access to their savings - although few dare to put them back into the banks. An estimated $20 billion to $30 billion is floating around the country, secured in family lockboxes or stuffed under mattresses.

Most people cannot afford to buy new cars or apartments anymore, and trips to the US or Europe are now three times as expensive. As a result, much of the middle class now chooses to spend its disposable income by pursuing leisure.

One of those benefiting from this trend is Isabel Aldao, owner of the La Bamba Estancia, a traditional Argentine ranch 75 miles northwest of Buenos Aires. In addition to a steady stream of foreigners for whom Argentina has become an inexpensive vacation spot, Ms. Aldao says the number of Argentines she has hosted in recent years has increased by 60 percent.

"Before, Argentines used to go to Punta del Este [a posh beach resort in Uruguay] for the weekend. But now they have to pay $500 for that, and they can't afford it," she says. "So they come here instead and learn more about their own country."

Aldao says she has noticed a new sense of national pride among these Argentines, who come to her ranch to ride horses with gauchos, sip herbal mate tea, and eat juicy, homegrown steaks.

This new pride has been hard won. From 1976 to 1983, Argentina was ruled by a military dictatorship that "disappeared" an estimated 30,000 people. Democracy was restored in 1983, but hyperinflation soon followed, where the price of milk would often triple in a matter of hours.

During the 1990s, Argentina enjoyed unprecedented growth and prosperity. Luxury items like perfumes and Palm Pilots were available for the first time. The telecommunications sector was privatized and upgraded, catapulting Argentina into the Internet era. Airlines began running shuttle flights between Buenos Aires and Miami, sending countless Argentines to South Beach and Disney World.

What made much of this progress possible was the peso's one-to-one peg with the dollar, an economic policy that would prove fatal for South America's second-largest economy.

The peg kept the government from being able to print money to cover costs, so instead it began unrestrained borrowing, saddling the country with unmanageable debt.

The government has defaulted on this debt and floated the currency. The peso has since lost 60 percent of its value and now trades around three-to-one to the dollar.

Like many Argentines, With, a lawyer, has seen his life savings slashed by two-thirds. But he is feeling better now with access to his money, and a hint of economic stability has returned.

"After all that has happened this past year, I've finally said, 'Enough with this [stuff], I want to have a good time!' " he says.

But some argue that this fondness for indulgence is exactly what has caused trouble for Argentina time and time again. Graciela Romer, a sociologist in Buenos Aires, predicts this extravagant lifestyle will continue to threaten the country.

"Argentines need to begin to see the value in saving money, not spending money. This is a weakness of the Argentine culture," she says. "Now people are spending more money because they want to gratify themselves."

Citizens go to the polls later this month to elect a new president, choosing from a field of three lifetime politicians - including former President Carlos Menem - and two relative newcomers. But with none of the candidates capturing the public's imagination - none polls above 21 percent - it seems that most people are skeptical that the politicians, some of whom had a hand in causing the current crisis, can repair the damage.

"People here can't plan for the future," says Castro, taking the last gulp from his bottle. "This is not a moment to save, this is a moment to enjoy."