Precis

Argentina was once one of the world’s richest nations but today it’s a country on its knees with annual inflation rates over 100 per cent and 40 per cent of the population living in poverty.

This week on Foreign Correspondent, reporter Carrington Clarke travels to the South American nation where the price of a steak is up by 70 per cent this year alone and soup kitchens are struggling to meet demand.

To make matters worse, the country has been gripped by the worst drought in decades.  

With the nation on the verge of bankruptcy, Argentines will shortly elect their next president.

The frontrunner is a radical libertarian who believes climate change is a hoax and who wants to ban abortion and relax gun laws.

He’s also promising to get rid of the central bank, dramatically reduce public spending and replace the peso with the US dollar.  

Carrington also visits the lithium triangle in Argentina's north-west where vast quantities of the world’s lithium is located.

The area is a modern-day white gold rush and there’s hope mining this rare metal – a vital component of batteries – will help solve Argentina's economic crisis.

Episode teaser

Music

00:10

CARRINGTON CLARKE, Reporter:  Imagine a place where annual inflation is over 100%, where 40% of the population lives in poverty.

00:17

MARISOL INSFRAN: We're not well off and sometimes we can't afford a plate of food.

00:26

CARRINGTON CLARKE, Reporter:  And the money you have today could be worth half in a year's time.

00:32

CAROLINA PIROTTA: You don't eat, travel, buy clothes or educate yourself.

00:37

CARRINGTON CLARKE, Reporter:  That place is Argentina. From the cities to the countryside, the Latin American nation is on its knees.

00:41

WALTER MALFATTO: A huge amount of money was lost last year. A loss for producers, Argentina, for everyone.

00:49

CARRINGTON CLARKE, Reporter:  Argentina was once one of the world's wealthiest nations, so how did this country go from boom to bust?

00:58

Super:
Carrington Clarke

And could the lithium that lies below these vast salt flats in the county's far north be part of the solution to its economic woes?

01:04

GOVERNOR GERARDO MORALES:   We are going to be number one. Argentina will be the biggest exporter.

01:14

CARRINGTON CLARKE, Reporter:  Against this backdrop, Argentines are preparing to go to the polls to pick their next president. And the crisis is fuelling support for a far right candidate who has taken an unexpected lead in the polls.

01:20

JAVIER MILEI: "We are aesthetically superior . We invented the mini skirt and the bikini! You know what? I have decided! Let's go with capitalism! Long live freedom, damn it!"

01:37

EUGENIA ROLÓN: We're tired of the same politicians who lied to us for years and brought us this economic, social and cultural disaster.

01:49

OSCAR RODRIGUEZ: They are voting for the executioner, the one who comes to cut off their head.

01:55

CARRINGTON CLARKE, Reporter:  Can anyone save Argentina?

02:00

Title: SAVING Argentina

Music

02:06

Couple dancing tango. Super:
BUENOS AIRES, ARGENTINA

02:13

La Boca GVs

CARRINGTON CLARKE, Reporter:  It's a Sunday afternoon in the busy tourist strip of La Boca, a working class neighbourhood in the country's capital.

02:23

Carrington walks in La Boca, watches couple dance

Renowned for the colourful houses of Caminito, it's also where the country's national dance, the tango, was born.

02:33

Carolina teaching tango class

At Bar Portuario people are warming up for their weekly tango lesson.

02:52

CAROLINA PIROTTA: "In class we are going to talk with the body. I'm going to have to use words for a bit but you're going to try to silence your words so you can use the language of the body."

02:58

CARRINGTON CLARKE, Reporter:  Carolina Pirotta is tonight's teacher, and despite my lack of rhythm -- and terrible Spanish -- I'm joining her class.

03:10

Carrington introduces himself to class

"I'm Carrington. I'm Australian, journalist. Sorry for my Spanish."

03:19

Carrington in tango class

Carolina has been teaching tango fulltime since 2015.

03:30

Carolina teaching

CAROLINA PIROTTA: Tango is the dance of an encounter and the encounter is one of the heart. It's an embrace, wanting to be close and knowing we are not alone. 

03:35

I am a tango teacher. It's what I love to do most in life, and my objective is to fill the world with tango.

03:51

CARRINGTON CLARKE, Reporter:  And with inflation the highest in thirty years, people are only paying her what they can afford.

04:03

Carolina to class

CAROLINA PIROTTA:  If today you say you're going to get a beer at San Telmo it'll cost 2000 pesos if it's a cheap place. So I think to ask each student to put in 1,500 pesos if they have it, is not crazy.

04:10

Students drop money into hat

CARRINGTON CLARKE, Reporter:  Carolina can't afford to rent and is living in a hostel. She says she's struggling to get by.

04:31

CAROLINA PIROTTA: Before, with one student's payment, I could buy a kilo of local tea, a piece of cheese and a loaf of bread.

04:39

Carolina interview

Today, it only buys a packet of local tea and then only the cheap brand. Not the brand I like. I live day to day. I don't enough for savings or planning.

04:51

Tango class

CARRINGTON CLARKE, Reporter:  It's not just Carolina doing it hard.  Businesses across Buenos Aires are also hurting.

05:11

Oscar serving food in bar

Oscar Rodriguez is the owner of Bar Portuario.

05:20

OSCAR RODRIGUEZ: This was like a dream fulfilled. Somewhere people can meet that has something to do with culture, where they come to dance tango or listen to tango.

05:26

CARRINGTON CLARKE, Reporter:  But while his bar is full tonight, he's not turning a profit.

05:48

Oscar interview in bar

OSCAR RODRIGUEZ:  It's a difficult moment because consumption is down. People have less purchasing power.  The person who comes to dance does not order food. They ask for an empanada or two, the cheapest thing on the menu.

05:53

Oscar walking to butcher

Music

06:15

CARRINGTON CLARKE, Reporter:  For Oscar, running a small business doesn't stop when the doors shut and everyone goes home. Every day he has to adapt the menu to what his customers can afford.

06:20

OSCAR RODRIGUEZ:  I started as a seafood restaurant and sold prawns, mussels, paellas. It got to a point where people hardly consumed that kind of thing so I changed the menu and now sell simpler things. Cheaper things.

06:32

Woman cutting meat

CARRINGTON CLARKE, Reporter:  With seafood out, meat is the key ingredient for most dishes. Argentines love their steak, but the price has risen by 70% this past year, a fact his local butcher is trying to make light of.

06:54

Sign translation: 'Will exchange 2kg of meat for an apartment in Palermo'

07:09

Oscar buying meat

SHOP ASSISTANT: "Good, Oscar, what else? You wanted some brisket?"

OSCAR RODRIGUEZ: "Yes, a piece with plenty of meat."

07:15

SHOP ASSISTANT: "Can you please pay my colleague over there."

OSCAR RODRIGUEZ: "I'll have to sell the apartment in Palermo."

07:22

Oscar pays for meat

I have less money to cover the same expenses, which also increase with inflation, because gas, electricity, water also increase.

07:32

Oscar prices menu

CARRINGTON CLARKE, Reporter:  Back at the bar, Oscar chalks up the menu. The prices he charges change constantly.

07:47

OSCAR RODRIGUEZ: This was normally being done once a month and now we have to do it once a week. It may be twice a week. And there are people who do it up to twice a day or more.

07:55

Oscar cooking

CARRINGTON CLARKE, Reporter:  What would it mean for you if you did lose this business?

08:16

Oscar interview

OSCAR RODRIGUEZ:  It would be like a lost dream. It's the last thing that I am defending. Because it's my house. My place. It's the place where I felt comfortable. My story is here. So for me it has a value beyond money.

08:23

La Boca GVs

Music

08:52

CARRINGTON CLARKE, Reporter:  A few blocks away, behind La Boca's colourful facade and celebration of the country's football icons, a bleaker reality exists.

08:56

JUAN GARCÍA LONGUI: La Boca is like a city within a city. If this soup kitchen wasn't here, life would be a lot harder for people.

09:07

Caminoneritos soup kitchen

CARRINGTON CLARKE, Reporter:  It's nearly midday and away from the busy tourist strip is Caminoneritos soup kitchen. Juan García Longui is busy preparing hundreds of hot meals for those in need.

09:19

JUAN GARCÍA LONGUI: When we started 15 years ago, we had about 40 people, and today we look after around 500 to 550 mothers. We see more families, two or three new families come to us every day.

09:33

Marisol and Diego at soup kitchen

CARRINGTON CLARKE, Reporter:  15 year old Marisol Insfran and 20 year old Diego Abalos travel from across the city to come here.

09:53

MARISOL:  Things have changed, everything was cheap before. Now you have to keep calculating and buy only what you can afford.

10:01

CARRINGTON CLARKE, Reporter:  Diego recently lost his job, and both say they'd struggle without the meal provided here.

10:14

DIEGO:  If this wasn't here, because prices are so bad, we couldn't afford to eat. Not only do they feed you, they provide you with groceries.

10:21

Soup kitchen

CARRINGTON CLARKE, Reporter:  It's staggering to think four out of every ten people in Argentina are now living in poverty.

10:40

JUAN GARCÍA LONGUI: We are providing an emergency service. That's not the reality anyone wants.

10:47

CARRINGTON CLARKE, Reporter:  Juan says something needs to change.

10:54

JUAN GARCÍA LONGUI: Governments come and go while the poor remain and grow.  And the country is getting worse.

10:59

Music

11:06

People on bikes, walking, La Boca GVs

CARRINGTON CLARKE, Reporter:  It's not just rapid inflation crippling Argentina. The government also has a debt bomb, owing hundreds of billions of dollars, including a controversial 44 billion to the International Monetary Fund. And there are real questions about whether the country can avoid bankruptcy.

11:09

Central Bank

As the Central Bank prints more and more money to keep up, the currency's value continues to plummet, meaning the pesos Argentines hold are worth less the longer they hold onto them. 

11:33

Carrington to camera on street

If people do have extra cash many want to exchange for US dollars in order to store the value, but the government restricts how much they can exchange officially. So people come to places like this -- Calle Florida in central Buenos Aires – in order to use black market exchanges. 

11:49

Currency exchanges

MAN: Dollar exchange!

CARRINGTON CLARKE, Reporter:  They only receive about half the dollars for their pesos compared to the official rate,

12:07

Carrington to camera on street

but with confidence in the home currency so low, it's a deal many are willing to take.

12:17

Drone shot over city to drone over Pampas

Music

12:27

Carrington to visit Walter Malfatto on farm

CARRINGTON CLARKE, Reporter:  While those that can afford it stockpile US dollars, outside the city, in the agriculturally rich Pampas region, soy farmer Walter Malfatto has decided it's safer to hold onto his harvest than to sell it.

12:40

Walter and Carrington walk

Walter, how much of your soy harvest have you now stockpiled?

12:57

WALTER MALFATTO: There are 300 tonnes of soy, about 30 million pesos. It sounds like a lot but, when you start thinking about overheads and everything, it's not that much. I don't know if we'll win or lose, but we have grain. And we cover ourselves with that.

13:01

Grain stockpile

CARRINGTON CLARKE, Reporter:  Hoarding grain like this at a time of skyrocketing food prices is controversial, but Walter insists it's necessary.

13:23

WALTER MALFATTO:  I explain to people that this isn't about speculation. If I had a guaranteed price that maintained its value for the full year, I would sell immediately. But how do I protect myself against the runaway inflation rate in this country? It's impossible.

13:32

Plough and tractor

CARRINGTON CLARKE, Reporter:  It's not just inflation and the plummeting peso putting pressure on producers. A severe drought has also wreaked havoc on South America's second largest economy, costing at least 20 billion US dollars in lost revenue and pushing the economy to the brink of recession. 

13:51

Drone shots over farm

WALTER MALFATTO:  I'm 60 years old and it's the most aggressive drought I've ever seen. It's very difficult. Very difficult and it's becoming worse with the climate, which is something we didn't think about before.

14:13

Archival. Peron, Argentina various

music

14:30

CARRINGTON CLARKE, Reporter:  To understand how Argentina got here, you have to go back nearly 80 years to this man, President Juan Peron, and the unique ideology he created known as Peronism. For the first part of the 20th century Argentina was one of the wealthiest nations in the world. A thriving grain and meat exporter and blessed with natural resources. But it was also terribly unequal.

14:33

Archival. Mussolini, Peron

Inspired by Mussolini's fascist Italy, Peron nationalised large parts of the economy and put-up trade barriers while boosting wages, increasing welfare payments and investing in infrastructure. His policies made him and his wife Evita, heroes among the working and urban classes.  But the huge increase in spending was financed by the frantic printing of money;

15:03

Archival. Riots, protests

the inflation genie was out of the bottle. In 1955, Peron was overthrown in a military coup. For the next 30 years, the country swung between brief periods of democracy and decades of brutal military repression.

15:31

Archival. 1980s democracy protests

All the while inflation persisted. In 1983, democracy was fully restored with all leaders from both sides promising to fix the economy. But no one has managed to stamp out inflation for the long term.

15:52

Milei campaign

JAVIER MILEI: "Long live liberty, damn it!... Long live liberty, damn it!... Long live liberty, damn it!"

16:11

CARRINGTON CLARKE, Reporter:  Now, as discontent grows, many Argentines are turning to a political outsider to be the country's economic saviour. Javier Milei, a radical libertarian, says climate change is a hoax. He wants to ban abortion, legalise organ harvesting and relax gun laws.

16:18

TV show, Milei destroying bank

But it's his economic manifesto that's really grabbed attention, with plans to destroy the Central Bank, take a chainsaw to public spending, and replace the peso with the US dollar.

16:41

Milei supporters

CROWD: "President! President! President!"

16:55

CARRINGTON CLARKE, Reporter:  In August, the neoliberal economist turned congressman rocked the political establishment when his coalition La Libertad Avanza won 30 percent of the primary vote, placing him as the frontrunner in the lead up to this month's presidential election.

17:05

Iñaki hugs woman on street

IÑAKI GUTIÉRREZ: We expected a good result but not that good. It was a very emotional night.  We know that behind each vote is a person. These people have dreams, hopes. They want things to change.

17:23

Iñaki and Eugenia campaign for Milei, social media platforms

CARRINGTON CLARKE, Reporter:  Iñaki Gutiérrez and his girlfriend Eugenia Rolón are digital influencers.  They're running Milei's social media campaign and targeting the country's youth, where voting starts at age 16.

17:43

IÑAKI GUTIÉRREZ: My role in the campaign is to manage Tik Tok, social media like Facebook, and YouTube, and to help a little with Instagram and Twitter.

18:02

Eugenia interview

EUGENIA ROLÓN: We know what young people want to hear because we are young. They want a message of hope that we can continue to live in Argentina and have a future here.

18:13

CARRINGTON CLARKE, Reporter:  Recent polls show more than 40% of 16 to 30 years olds want Milei to be Argentina's next president.

18:26

Iñaki and Eugenia interview at café

Why do you think it is that Milei has struck such a chord with young people?

18:35

IÑAKI GUTIÉRREZ: They want people to govern, not politicians because politics got us to where we are now.

EUGENIA ROLÓN: Milei is the anti-politics politician.

IÑAKI GUTIÉRREZ: The same as Donald Trump in the US or Bolsonaro in Brazil, they're more like ordinary people than politicians could ever be.

18:40

CARRINGTON CLARKE, Reporter:  Both believe ditching the peso and replacing it with the US dollar is the answer to stabilising the economy.

19:01

IÑAKI GUTIÉRREZ: We believe that inflation will end with dollarisation.

EUGENIA ROLÓN:  Because there will be no Central Bank to issue pesos.

19:08

CARRINGTON CLARKE, Reporter:  But don't you think a country should have its own currency, or at least some control over its own currency?

19:17

IÑAKI GUTIÉRREZ:  We believe that the worst evil that can afflict Argentina is that if monetary policy is managed by our politicians.

19:23

CARRINGTON CLARKE, Reporter:   But dollarisation is a radical policy.

19:30

IÑAKI GUTIÉRREZ: The starting point calls for radical change and we believe things can't get any worse than they are now.

19:33

Iñaki and Eugenia take selfie in park

"Long live liberty, damn it!"

19:43

Carrington to camera in car to salt flats

CARRINGTON CLARKE, Reporter:  The three leading presidential candidates may offer starkly different policies, but they all agree on one point: that a key component to Argentina's economic future lies in the very northern tip of the country.

19:52

Driving to salt flats

I'm driving up to the Argentine salt flats where a modern day white gold rush is taking place.

20:01

Salt flats. Map overlay showing 'lithium triangle'.

Argentina, along with Chile and Bolivia, is part of an area known as the 'lithium triangle'. The area holds more than 50 percent of the world's known reserves of lithium, a rare metal that's used in batteries, and critical for transitioning away from fossil fuels.

20:15

Driving across salt flats

The lithium is found below these massive salt flats, the remnants of ancient lakes.  But the salt that lies on top is also an important source of income for the indigenous Kolla community who have mined here for generations.

20:34

Rodolfo cutting salt blocks

RODOLFO ALANCAY: I've worked in the salt flats since I was eight years old. I have kept my grandfather's legacy alive and our culture. I like the work, I enjoy it.

20:51

CARRINGTON CLARKE, Reporter:  Rodolfo Alancay often exchanges the blocks for other goods but sometimes he sells them for one US dollar a pair.

21:08

RODOLFO ALANCAY: This salt is given to livestock – cows, horses, sheep. My parents and grandparents used to say it contains a lot of potassium.

21:16

CARRINGTON CLARKE, Reporter:  Like the rest of the country, the financial crisis is biting hard here, too.

21:32

RODOLFO ALANCAY: We work very hard here and inflation punishes us very hard. We can't save, we can't buy anything because we have no money. Right now the money we make is almost nothing. Inflation killed us and it keeps on rising.

21:38

CARRINGTON CLARKE, Reporter:  The Kolla aren't the only ones wanting to make money from the salt flats.

22:08

Olaroz lithium facility

Music

22:12

CARRINGTON CLARKE, Reporter:  In the shadow of the Andes, in Jujuy province, is the Olaroz lithium facility, majority owned by Allkem, an Australian company.  It began producing lithium carbonate in 2014. The metal is pumped up from the briny water under the salt flats and then stored in these large evaporation pools. The sun does the rest. Another 69 projects like this are slated for the region. The man behind the plan is Jujuy governor

22:20

Carrington meets with Morales

Geraldo Morales.

GOVERNOR MORALES: We have various projects.

22:53

Morales interview

I estimate we'll be able to get to 500,000 tonnes in the next ten years.  We're going to be the number exporter. Argentina will be the biggest exporter.

22:59

CARRINGTON CLARKE, Reporter:  The governor is at pains to promote lithium's clean and green image.

23:15

GOVERNOR MORALES:  Lithium doesn't contaminate. The salt flats are like a glass.  It's a closed basin, so it doesn't reach the rivers and the sea. And the water is ten times saltier than the ocean.

23:22

Drone shot over facility

CARRINGTON CLARKE, Reporter:  It takes an estimated two million litres of water to make one tonne of lithium carbonate. And in one of the driest place on earth that's controversial.

23:41

Eloy interview

ELOY QUISPE: Here the rainfall is between 100 to 200 millimetres a year.

24:00

Eloy with community members

CARRINGTON CLARKE, Reporter:  Eloy Quispe is the leader of the San Miguel de los Colorados Kolla community. He's not convinced that lithium mining is environmentally clean.

24:04

Eloy interview

ELOY QUISPE: The salt water and fresh water are closely connected, and so when they drill down, the fresh water replaces the brine from underneath. That's why the aquifers as the geologists call them, don't work as they should.

24:14

CARRINGTON CLARKE, Reporter:  Lithium is essential for helping people transition to green power, away from things like petrol. Don't we need to be able to mine lithium in places like this?

24:36

ELOY QUISPE:  I'm not against advancing technology  I think it's great. Lithium is said to be replacing the old industries but it's not being done in the right way. They should look for a different method that doesn't have such a negative impact on our Mother Earth.

24:46

Tourists at salt flats

CARRINGTON CLARKE, Reporter:  Eloy says lithium mining will impact tourism – another crucial source of income for his community, with hundreds of thousands of people visiting this natural wonder each year.

25:12

ELOY QUISPE: There's money in tourism and it has no impact.  That's why the salt flats are important to us, because we exploit it, but in a balanced way. We don't over exploit it.

25:25

Olaroz lithium facility

CARRINGTON CLARKE, Reporter:  Aside from the environmental concerns, Eloy also questions whether Argentina is reaping enough of the revenue, with miners paying a royalty of 3%, far lower than neighbouring Chile which taxes up to 40%.

25:49

Eloy interview

ELOY QUISPE: They come here, take the riches out of our land, exploit it nothing is left. That's the sad reality.

26:02

Morales interview

CARRINGTON CLARKE, Reporter:  Is there an argument to make that royalties should be higher to ensure that more of the money stays with the Argentinean people and to ensure that they receive the benefits of those resources?

26:19

GOVERNOR MORALES: Both companies currently in the province, Exar and Sales, employ 12,900 people either directly or indirectly. We also have another regulation which forces these companies to leave 5% of their lithium profits in Jujuy for projects with added value.

26:29

Olaroz lithium facility

CARRINGTON CLARKE, Reporter:  The benefits of the boom ring hollow for Eloy and his community.

26:54

Drone shot over salt flats/Eloy on motorbike to salt flats

ELOY QUISPE: They come with a lot of capital but mining jobs are not eternal. Mining only lasts a certain amount of time, 20 to 30 years tops. After 30 years, what are you going to live from? What you had before is gone. Everything is destroyed.

27:05

Eloy leads ceremony

CARRINGTON CLARKE, Reporter:  At the salt flats Eloy leads his community in a ceremony.

27:32

ELOY QUISPE: "We give thanks to our Mother Earth and are grateful for everything she gave us throughout the year."

27:42

CARRINGTON CLARKE, Reporter:  But while Eloy and his community have faith in Mother Earth, they have little in Argentina's political candidates.

27:57

ELOY QUISPE: Argentina is one of the richest countries in the world. It has everything right? But it's poorly managed. It's not in the best interests of the people. There's nobody right now that can lead this country. I don't see any of them as our next president.

28:05

Argentinean flag. Drone shots over Buenos Aires

Music

28:34

Bar Portuario, night. Oscar dances tango

CARRINGTON CLARKE, Reporter:  As the presidential election draws closer, back in Buenos Aires at Bar Portuario, Oscar, like so many Argentines, is just hanging in there.

28:44

OSCAR RODRIGUEZ:  We're in an extreme situation. We always are.  That's why we have to reinvent ourselves. We have to learn to do things differently.

28:58

CARRINGTON CLARKE, Reporter:  But in a country long bedevilled by economic problems he's doubtful anyone has a quick fix.

29:12

Oscar

OSCAR RODRIGUEZ:  I'm not going to see it in my lifetime, because I don't think this can be resolved in 20 or 30 years.

29:21

Kids kick football

Music

29:33

Caminito houses, political poster, grain storage

29:38

Salt flats.

Credits [see below]

29:46

Out point

30:04