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One Family’s Struggle to Survive : Hyper-Inflation Proving Nightmare for Argentines

Times Staff Writer

Jose and Eva Furfaro used to see themselves as solidly middle class: an occasional vacation, a color television set, weekend trips to the movies, even a bit of savings.

“Then the hyper-inflation grabbed hold of us,” Jose Furfaro said. “Now we are just trying to get to the end of the month without being hungry. I’d say that describes the lower class.”

Along with millions of other Argentines, the Furfaros have tumbled in recent months from relative well-being to the edge of disaster. Their changed lives offer a glimpse of the ravages of hyper-inflation and the toll it has taken on a middle class that was once the largest in Latin America.

The couple and their 11-year-old son, Marcelo, are not yet among the nearly one-third of the population said to have fallen into poverty since February, when Argentina’s economic decline suddenly became a full-scale crisis. But if it is true that a healthy middle class is the backbone of democracy, the Furfaros’ slide bodes ill for Argentina’s future.

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Still, if there is reason to be hopeful for Argentina, it flows from families like this one, devoted to each other and their country and confident that, after touching bottom, Argentines will eventually reclaim a respected place in the world.

Jose Furfaro, 43, has worked for 10 years as an assembly-line supervisor in a tin-can factory in an industrial suburb of Buenos Aires. He is a union member, oversees 20 workers, and his salary as recently as December and January--9,000 australs--was the equivalent of a respectable $550 per month. He now earns 45,000 australs a month, but the austral has depreciated so dramatically in dollar terms that his monthly pay is equivalent to just $64.

His salary has plummeted in value not only in dollar terms, with the collapse of the austral from 17 per $1 to more than 700, but in buying power as well. Despite periodic raises, Furfaro figures his real decline in income to be 50% over the last six months, as hyper-inflation overwhelms his paycheck.

Stratospheric Projection

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Prices rose 78% in May and another 114% in June and are projected to reach the stratosphere this month, climbing at a pace of more than 200% monthly. Until this crisis, inflation-prone Argentina had never known price increases of more than 45% a month.

Inflation in the first six months of the year has been 613% by official reckoning, or nearly double the 387% total for all of 1988. One respected unofficial estimate puts the six-month total above 1,200% and the figure for the past 12 months at 2,800%. If July’s expected rate of 200% persisted for a year, inflation would total 8,000,000% annually.

Armed with a calculator, Eva Furfaro, the “family economy minister,” tries to cope. After working out the fixed expenses each month, she conjures up ways to make do with the little that remains.

-- Jose takes two buses to get to work, and two more home. After this month’s fare increases of 350%, his commuting costs have soared to 500 australs per day, or 10,000 a month--nearly one-fourth of his salary.

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-- Their rent is low by Argentine standards, just 5,000 australs ($7.14) a month for a three-room apartment above a vacant shop on a busy avenue in grimy San Fernando, 15 miles north of downtown Buenos Aires. Their landlord has swallowed a large portion of the recent inflation to keep his prompt-paying and tidy tenants.

-- Food, traditionally abundant and cheap in this land of grain and cattle, has become the constant preoccupation for the family. With prices rising as often as twice daily, they budget now between 700 and 1,000 australs a day, or 21,000 to 30,000 per month.

The food, transport and rent costs, therefore, use up at least 36,000 australs, or more than three-fourths of Jose’s income. At worst, those basic costs alone consume every cent he earns.

‘It’s Like a War’

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“No one was prepared for this; it’s like a war--hyper-inflation means total destruction. All we lack are the destroyed buildings,” Jose said in a conversation at his dinner table, which fills most of the combination kitchen-dining-living room.

“Now we deny ourselves many things that we used to take for granted,” he added. “We used to go out to eat; now we don’t. We could go to a sports event; now we can’t.

“We took a four-day vacation in January to Mar del Plata (a seaside resort), and we thought, ‘This is lovely; we’ll come back soon.’ We didn’t know what was coming.”

For the first time ever, the family has not gone on a single outing during the current two-week winter school holiday, not even to a movie. The cost for a movie for the three would now be nearly double their daily food budget.

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The parents’ faces give away their ancestry. Jose, olive-skinned with a Roman nose, is a fourth-generation Italian, and Eva, fair-skinned and red-haired, a second-generation German. Unlike many Argentines, they have never considered emigrating.

Faith in Menem

“It’s not the matter of cost, but rather of the great hopes we have, because we are going to emerge from this situation,” said Jose. Lifelong members of the Peronist party, they are convinced that Carlos Saul Menem, the Peronist who assumed the presidency July 8, will preside over Argentina’s rebirth.

Menem has surprised many Argentines, choosing a broad-based, conservative Cabinet and announcing sweeping reform plans, including the privatization of inflation-causing state-owned businesses such as the telephone and oil companies. He has warned of months and years of sacrifice ahead as the price for structural changes. That means challenging the privileges of vested interests, including the unions that underpin the Peronist party. The Furfaros are not fazed by that prospect.

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“The worker is already paying now for all this inefficiency and corruption,” Jose said. “We have never had a strong government that was able to say no. Those who governed did so for their own sector, not for all Argentines.

“Perhaps it was necessary that we go through this--like Germany and Japan, which also touched bottom,” he added. “Now many people are willing to cooperate with the new government.”

Deprived of the chance to do much themselves, the Furfaros enjoy life through Marcelo, a slender, quiet, only child.

“The saddest thing is to say to our boy, ‘No, I’m sorry, we can’t do thus and such.’ That hurts the most,” his mother said.

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Until February, Marcelo took swimming lessons in the neighborhood, but inflation halted that. Then the family stopped using the school bus service, and Marcelo makes a 20-minute walk with a parent to his parochial school, which costs about 1,200 australs a month ($1.70). Chocolates are virtually out of the question. Marcelo, his parents proudly note, never complains.

Instead of swimming, he has taken up soccer, and his father has become involved in the club committee. The family goes together to his matches on Saturdays, bringing sandwiches, and the parents are delighted that the solitary child has taken up a team sport.

The Furfaros note that Argentina’s decline has been brewing for years, bringing a steady if bearable decline in living standards over the years. Seven years ago, the family could afford a color TV set paid for in installments. Jose had to sell his car four years ago and scraped together the money to buy his son’s bicycle two years back. But nothing prepared them for what has occurred this year.

Unexpected Benefits

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Nevertheless, Jose said the extra walking to cut transport costs has proved to be healthy and fun for the family, and he has cut down his smoking from a pack a day to half a pack or less to save money. The soft-spoken Furfaros smile at the unexpected benefits of the crisis, both for their health and their family’s already strong bonds.

And they have learned not to waste. “We eat yesterday’s bread, we eat all the meat on the few days we have it,” Eva said. “Necessity teaches us how to survive.” She now combs the neighborhood looking for the best prices, rather than buying from her usual butcher or grocer without a second thought.

They also know that many are far worse off. San Fernando, part of the huge industrial belt around Buenos Aires that is home to the majority of the area’s 12 million people, has set up 40 soup kitchens for the poor, one of them six blocks from the Furfaros’ apartment. The nearby town of San Miguel was a focal point of food looting and rioting that broke out in late May.

A report released Wednesday by the government intelligence service estimates that 44% of the residents of greater Buenos Aires are poor, and about 10 million of the country’s 31.5 million people are technically living in poverty. Hundreds of thousands have been suspended from their jobs temporarily, including many at Jose’s factory.

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Neighbors’ Problems

“It is terrible to see neighbors, men with families, unable to find work and feed their children properly,” Jose said. “Sometimes, Argentines don’t know how to live. They only see those who are better off, and not those who are behind them, and they are many.

“We worry about reaching the end of the month, but I know that many more are worried about getting to the 10th of the month,” he said, adding that the family has so far been able to avoid the need for Eva to go back to work--assuming she could find a job.

Meanwhile, the family goes without its usual weekend desserts, which Eva enjoyed making. At 1,000 australs ($1.42) for the ingredients, a cake or pie is now a once-a-month treat, if that. Coffee, never before a luxury, now is served occasionally, supplanted by cheaper tea and yerba mate, an herb-like drink.

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The greatest cost for the family, however, has been the frustration, for the moment, of a longtime goal: owning their own home. In years past, when they could save, they joined a union-sponsored housing plan and paid installments for a two-bedroom apartment--with the kitchen separated from the living-dining room.

The land has been purchased near their current home, the utilities are in place and construction was to start this year. Now the project is frozen, another casualty of hyper-inflation.

“Our dream is to have our own house,” Jose said. “But with this constant inflation, when we nearly had enough, the price shot out of our reach. Finally, we managed, and then this disaster fell on top of us.”


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