The Two Worlds of Buenos Aires: Macri’s Legacy of Inequality

[This article has received very minor edits in response to valid points raised in the comments. Please see COHA’s comment below to see what was edited]

Inequality is nothing new in Latin America; the region has long occupied the unenviable position of being considered the most unequal area in the world. However, the human face of inequality is nowhere more apparent than in Buenos Aires, the capital of Argentina. [1] Buenos Aires is a study in contrasts: the splendid Libertador Street, punctuated with  art museums, luxury malls, and expensive apartments, stands at points directly across the train tracks from the improvised housing of the villas miserias, or shantytowns. Below Rivadavia Street, as the noted Argentine novelist Jorge Luis Borges put it,  “the South begins,” a land of impoverished suburbs and slums.

Buenos Aires is a maze of overlapping jurisdictions. The metro area numbers some 13 million people, nearly 40 percent of the country’s population, but the city’s mayor, Mauricio Macri, presides over a jurisdiction which includes just  3 million residents. The problem has proven too much for Macri, who has been unable to develop a working relationship with either provincial or national governments. Moreover, Macri and his Propuesta Republicana Party (Republican Proposal, PRO) seem primarily interested in projects that benefit the affluent, often neglecting the issues of poverty alleviation, environmental cleanup, and improvement of substandard housing. The people of Buenos Aires deserve better. Only with immediate and decisive action can  improvement come for the lived experience of the city’s poor.

The lines of inequality are starkly delineated in the city,  following the North (rich) and South (poor) gradient (see Figure 1). Levels of income disparity in Buenos Aires have grown steadily, along with a 35 percent jump in poverty in the Greater Buenos Aires area, over a 16 year period. Poverty rates rose from 12.7 percent in 1986 to 49.7 percent of the population in 2002, just after Argentina’s economic crisis, according to government statistics. U.N. Habitat estimated the city’s Gini coefficient, a measure of inequality with 0 being total equality, everyone with the same income, and 1.0 being perfect inequality, one person has all the income, at .52 in 2005. This measure, compared to Quito’s .49 and London’s .34, places Buenos Aires  in the category  “among the most unequal in the world” according to the United Nations. [2] The wealth of the highest decile of the population of the city is equal to 28.3 times that of the poorest. Another way of capturing this inequality is to look at city  real estate prices. The cost of one square meter of land in a rich neighborhood is 116 percent higher than a meter in a poor one. [3] As many as 10 percent of the city’s residents live in informal and improvised housing, lack access to public services, and live in crime-riddled communities. [4] These problems reflect dire circumstances, but the city’s government has many of the necessary tools to successfully address them.

Figure 1: Average incomes in Districts of Buenos Aires (Monthly, in Argentine Pesos, with darker colors representing higher incomes) Source: Buenos Aires City Government - http://www.ssplan.buenosaires.gov.ar/MODELO%20TERRITORIAL/WEB/modelo_territorial.html

Figure 1: Average incomes in Districts of Buenos Aires (Monthly, in Argentine Pesos, with darker colors representing higher incomes)
Source: Buenos Aires City Government – http://www.ssplan.buenosaires.gov.ar/MODELO%20TERRITORIAL/WEB/modelo_territorial.html

Overlapping Jurisdictions

Buenos Aires has been an autonomous region since 1996, when the national government gave up its control over the appointment of the city’s mayor. Today the Buenos Aires mayor is regarded as the third most important political position in the country, after the president and the governor of Buenos Aires province. [5] Macri, scion of a wealthy family and former manager of the popular Boca Juniors soccer club, took office in 2007 after an effective electoral campaign that portrayed him as “business friendly”. The position of mayor is a powerful one, as shown by Figure 2, affording Macri a great deal of independence.

 Figure 2: From C40 Cities. Illustrates Macri’s government’s power  Source: C40 Cities - Climate Leadership Group - http://c40.org/c40cities/buenos-aires

Figure 2: From C40 Cities. Illustrates Macri’s government’s power
Source: C40 Cities – Climate Leadership Group – http://c40.org/c40cities/buenos-aires

Macri is also  the country’s main opposition leader, and this status has figured into his drive to keep the city of Buenos Aires fiercely autonomous. Macri’s policies have moved closer and closer to practices of “city diplomacy,” in which cities, as opposed to central governments, engage in international diplomacy. Scholar Roger Van der Plujim notes that “[i]n instances where local interests are very much represented by central governments, the perceived need by cities to engage in city diplomacy is more limited than in those instances where local interests are less represented.” [6] Essentially, if city leaders do not feel that their interests are represented at the national level, they increasingly have the power and inclination to seek support internationally. On September 17, at an address at the Center for Strategic and International Studies in Washington D.C., Carlos Pirovano, Economic Development Advisor to Mayor Macri, noted that his administration does not even hold meetings with the country’s central government, lead by Christina Fernández de Kirchner, nor with the provincial authorities of Governor Daniel Scioli. Clearly, the local interests of Buenos Aires are not represented at the national level. Following the framework of Van der Plujim, city diplomacy would then become much more important for Buenos Aires, which must look beyond the national government for diplomatic support. Pirovano’s visit to the United States indicates that Macri’s city government has begun to do just that.

These steps are allowing the Buenos Aires city government to set its own terms without having to negotiate with a complicated set of national actors. Macri has the institutional and diplomatic power as mayor to enact sweeping changes on addressing poverty issues in the city. However, he has made neither just nor efficient use of the power at his disposal, and has failed to address the  problems the city faces.

Fundamentally, Macri has spent his time and the city government’s funds on urban planning projects that benefit already well-to-do Argentines. As William Kinney noted in his piece, “COHA Spotlights CSIS Roundtable Discussion with Macri’s Economic Advisor” for the Council on Hemispheric Affairs, Macri’s strategy for urban development has revolved around designating different “districts” within the city for a certain categories of economic activity. The artistic neighborhood of Palermo, for instance, was designated as a “film district,” with tax and infrastructure incentives for further development of the film industry. Carlos Pirovano highlighted the importance of these initiatives, especially in the southern neighborhood of Parque Patricios, which was designated as a “technology district.” This neighborhood, which is one of the city’s poorest, has seen a 200 hectare development of office buildings and the growth of technology sectors, with 158 new businesses moving into the zone. [7] Pirovano also noted that increased security in Parque Patricios had led to reduced use of “paco” (crack cocaine) in the area.

While these are worthy enough projects, the jobs created are largely destined for well-educated middle and upper-class Argentines, not those who live in the neighborhood, severely limiting any poverty-alleviation impact from these measures. Indeed, many of the development districts, like the film district in Palermo, are located in already affluent areas of the city. In addition, this emphasis on the development of individual districts has corresponded with a cutback in funds available for other important projects.

The proposed 2014 city budget indicates the lowest spending on social housing in the last decade, a 19 percent reduction from last year and part of a trend of declining funds for those living in improvised and informal housing. [8] This budget received harsh criticism from Daniel Filmus, former senator for the ruling Frente Para la Victoria (Front for Victory, FPV) party, who charged that the measure could only result in “lowering salaries, lowering social spending, and increasing debt.” [9] Meanwhile, the budget for the city’s Ministry of Social Development will also be reduced by $20 million USD for next year. These cuts have been put into place despite the fact that it is estimated that 350,000 people in the city are living in a situation of “housing emergency.” [10] Educational organizations in the city, like Igualdad Educativa (Education Equality), have also criticized the 2013 budget’s emphasis on subsidies for private schools. The sums destined for private schools exceeded the funds allocated to the Subcommittee for Education Equality, an organization charged with increasing inclusion and equality in public education in Buenos Aires, indicating a powerfully regressive approach to education.

Macri is failing in other ways. Lamentably, his  government has dragged its feet on the logistics of a cleanup of the Matanza -Riachuelo River along Buenos Aires’ southern border. The site is infamous,  recently mentioned on Time Magazine’s list of 10 most polluted places. [11] A dumping ground for tanneries and other industrial sites, the Riachuelo is heavily contaminated with zinc, lead, copper, nickel, and chromium. Many of the two million people who live along its banks rely on the river for their drinking water, putting their health in jeopardy. [12] While cleanup efforts have begun with an edict from the country’s Supreme Court and with the help of $840 million USD from the World Bank, efforts to relocate more than 2,400 families away from unsafe living conditions on the banks have been stalled by  bureaucratic infighting. Furthermore, a recent report by Acumar, a local government agency, noted the reappearance on the banks of more than 70 percent of the waste that previously had been cleaned from the river’s banks. [13] Finally, the city has not yet addressed the sad fact that there are only 35 ACUMAR inspectors and 100 Environmental Protection Agency inspectors for the more than 2,345 companies located along the river in the city’s territory, slowing the pace of clean-up work. [14] The effort could last nine more years and the total cost could be in the billions of dollars. These derelictions of duty on the part of the PRO in Buenos Aires take on grander significance when their aspirations toward national office are taken into account.

Macri’s Poltical Future

Macri’s PRO is currently the fourth-largest political party in Argentina, after Peronism, the social liberalism of the Unión Cívica Radical party, and the socialist Frente Amplio Progresista party. [15] The PRO party’s political victories in Buenos Aires demonstrate that Macri has caught the imaginations of Argentina’s urban elite. The trouble is, however, that the mayor of Buenos Aires is clearly more concerned with image and “business-friendliness” than with the real needs of his poorest constituents. The city’s website is dedicated to burnishing Macri’s self image,  presenting a sunny image of the city where on every street corner, happy Buenos Aires residents bask under banners declaring  “En todo estás vos” (you are in the middle of everything). Perhaps Macri believes this, perhaps he thinks that the benefits of his urban planning projects will “trickle down” to the city’s poor, but up to this point, it does not appear to be working. At rallies and other events, youth from the city of Buenos Aires chant “Macri, basura, se fue la dictadura” (Macri, you’re trash, the dictatorship is gone). If Macri has future political aspirations, as he apparently does, he must learn to incorporate the needs of those outside his rosy bubble of “modernity.”

Thomas Abbot, Research Associate at the Council on Hemispheric Affairs

Please accept this article as a free contribution from COHA, but if re-posting, please afford authorial and institutional attribution. Exclusive rights can be negotiated. For additional news and analysis on Latin America, please go to: LatinNews.com and Rights Action

For additional news and analysis on Latin America, please go to: LatinNews.com and Rights Action

[1] “Buenos Aires.” C40 Cities. Accessed November 18, 2013. http://www.c40cities.org/c40cities/buenos-aires

[2]“State of the World’s Cities 2010/2011: Bridging the Urban Divide” UN Habitat. 2008

[3] “2010-2060: Modelo Territorial Buenos Aires.” Ministerio de Desarrollo Urbano de la Ciudad de Buenos Aires. 2011.

[4] Ibid. Auyero. 2010

[5] Murph, Martin. “Profile: Mauricio Macri.” BBC. June 25, 2007. Accessed November 4, 2013. http://news.bbc.co.uk/2/hi/americas/6222126.stm

[6] Van der Plujim, Rogier. “City Diplomacy: The Expanding Role of Cities in International Politics.” Netherlands Institute of International Relations. April, 2007

[7] Smith, Romina. “Distrito Tecnológico: Parque Patricios se Transforma: ya se radicaron 158 empresas.” Clarín. September 8, 2013. Accessed November 18, 2013. http://www.clarin.com/ciudades/Parque-Patricios-transforma-radicaron-empresas_0_989301167.html

[8] Videla, Eduardo. “ La vivienda, con su presupuesto más bajo.” Página 12. November 11, 2013. Accessed November 18, 2013. http://www.pagina12.com.ar/diario/sociedad/3-233311-2013-11-11.html

[9]  “Filmus denunció que ‘el presupuesto de la ciudad es de ajuste.” Página 12. October 3, 2013. Accessed November 19, 2013. http://www.pagina12.com.ar/diario/ultimas/20-230467-2013-10-03.html

[10] Ibid: Videla, November 11, 2013

[11] Walsh, Brian. “Urban Wastelands: The World’s 10 Most Polluted Places: Matanza-Riachuelo, Argentina.” Time. November 4, 2013. Accessed November 18, 2013. http://science.time.com/2013/11/04/urban-wastelands-the-worlds-10-most-polluted-places/slide/matanza-riachuelo-argentina/

[12] Herrberg, Anne. “Argentina’s filthy Riachuelo River faces clean-up.” DW. September 28, 2011. Accessed November 18, 2013. http://www.dw.de/argentinas-filthy-riachuelo-river-faces-clean-up/a-15417355

[13]  “Riachuelo: Más retrocesos que avances.” La Nación. November 13, 2013. Accessed November 19 ,2013. http://www.lanacion.com.ar/1637708-sin-titulo

[14] Ibid: Herberg, November 18, 2013

[15]  “Latin American Weekly Report: Modest victory fails to mask uncertain future for Kirchnerismo.” Latin News. October 31, 2013. Accessed October 31, 2013. http://www.latinnews.com/media/k2/pdf/btofe.pdf

 

 

5 thoughts on “The Two Worlds of Buenos Aires: Macri’s Legacy of Inequality

  • January 11, 2014 at 8:22 pm
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    I disagree with several ideas in the article. Far from “indifference towards the task of develop a working relationship with either provincial or national governments”, Macri insisted during 2011 and 2012 in cordinating efforts on key issues to no avail since President Cristina Fernandez de Kirchner does not consider it necessary. Since both provincial and national governments belong to the official party there has been limited progress in coordinating efforts. Regarding the clean-up of the Matanza Riachuelo, it is a jurisdiction shared by three governments: National, Provincial and Buenos Aires City, so Macri by himself is not allowed to unilaterally implement it. In case there is an interest to verify how the “needs of those outside (Macri’s) rosy bubble of “modernity” have been adressed, I suggest analyzing the way he was re-elected by winning in every single district of the city, after years in power.

    Reply
  • January 14, 2014 at 8:08 pm
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    The article is absolutely biased, as if it were written by a Kirchner’s supporter. Inequality in Buenos Aires is not Macri’s fault, not even the fault of any previous major (a couple of them part of the national government party); the city receives endless waves of impoverished people from other districts and even from beyond the country’s borders.

    If there is something that Macri or his predecessors are to blame, is not enforcing the law and let these people to illegally occupy big surfaces of land, while other neighbors in the city struggle to make ends meet and have real trouble to pay for their mortgages. The reason they didn’t do anything is because populism in Argentina is very strong, and any action taken against these people – although legal and fair – would be considered as an aftershock of the military regime.

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  • February 19, 2014 at 12:40 pm
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    Dear Mr. Abbot,

    Your recent article on the social and economic situation of the city of Buenos Aires, entitled “The two worlds of Buenos Aires: Macri’s legacy of inequality” (January 7, 2014), touches upon several issues which this administration believes are paramount to progress: mainly, the reduction of inequality and a sustainable approach to development.

    It is therefore unfortunate that your report appears to be based on several unwarranted assumptions, and consequently reaches misinformed conclusions. Let me therefore provide you with some helpful information, should you be interested in revising and correcting the inexactitudes contained in the article. I remain, of course, readily available for any additional questions you may have on these and other subjects:

    1. You stated in the second paragraph that Mayor Mauricio Macri “has demonstrated indifference towards the task of developing a working relationship with either provincial or national governments.”

    Since the moment we took office, this administration has placed great value in cooperating with both the national and provincial governments, and has on several occasions expressed its intention to work hand-in-hand with them for the well-being of the citizens of Buenos Aires. It was the national government’s deliberate policy to segregate those provinces and municipalities ruled by opposition parties. Mayor Macri requested dialogue with President Cristina Fernandez de Kirchner when the national government decided to withdraw the federal police from the city’s public buildings in 2011, and made effort to work together with the Province of Buenos Aires to improve waste management in the metropolitan area. Moreover, we are currently working closely together with the federal government towards the completion of the President Illia highway, which is expected to greatly reduce travel time as well as carbon emissions particularly during rush hours.

    Mayor Macri’s open disposition has always been very clear. We therefore feel that it is unfair to suggest that he has had no interest in pursuing a cooperative relationship with either of the two governments.

    2. Paragraph 3 of the article mentions that “U.N. Habitat estimated the city’s Gini coefficient (…) at .52 in 2005. This measure, compared to Quito’s .49 and London’s .34, places Buenos Aires in the category “among the most unequal in the world” according to the United Nations.”

    Mayor Macri came into office on December 10, 2007, with a strong commitment to advancing social development policies that ensure opportunities for all citizens. It is with this commitment in mind that our administration has worked towards reducing inequality. Our official data shows that the city’s Gini coefficient has steadily shrunk in recent years, reaching an estimated .39 during the second half of 2012. The contrast with the .52 coefficient attributed to the city eight years ago is unmistakable, and shows that significant results have been achieved.

    3. On paragraph 7, it is stated that “Macri has spent his time and the city government’s funds on urban planning projects that benefit already well-to-do Argentines”. In a similar tone, in paragraph 8 you state that “While (the Film and Technology districts) are worthy enough projects, the jobs created are largely destined for well-educated middle and upper-class Argentines, not those who live in the neighborhood, severely limiting any poverty-alleviation impact from these measures.”

    These remarks seem to ignore one of the main principles of the city’s urban planning policy, namely the absolute priority given to the poorer and less developed southern part of the city, which is visible in countless examples. Your analysis of the policy to develop industry-related clusters, which fails to mention that all but one of these districts are located in the historically poorer, more marginalized and displaced southern areas of the city, misses a very significant point: that these districts have positive socio-economic repercussions on the entire neighborhood. The Technology District, for instance, is already enhancing economic prospects for people living in the area. Specialized ICT businesses and a daily influx of people into the neighborhood is driving local business growth, and living conditions are improving with better public lighting, more police presence and improved transport connections.

    4. Your statement concerning spending on social housing in paragraph 9 is also at odds. You say that “The proposed 2014 city budget indicates the lowest spending on social housing in the last decade, a 19 percent reduction from last year and part of a trend of declining funds for those living in improvised and informal housing.” The allocation for housing in the 2014 budget is ARS$ 1.263.711,862 compared to an allocation in the 2013 budget of ARS$1.094.833,218.

    In this respect, I suggest you look into the various programs implemented by the Government of the City of Buenos Aires which are aimed at providing sustainable housing solutions. One such example is the Primera Casa (“First House”) financing program, which tackles the challenge of home ownership, offering favorable housing credits to families. By the end of 2013 over 3,000 credits had been approved by the City Housing Institute and the city’s public bank, with priority given to those families living in socially vulnerable situations.

    5. Finally, I would like to comment on the subject of the Matanza-Riachuelo basin cleanup, which you touch upon on paragraph 10. Saying that “Mayor Macri’s government has dragged its feet on the logistics of a cleanup of the Matanza-Riachuelo” appears to imply that the Riachuelo cleanup is the sole responsibility of the City government. It is not; it is a joint effort in which the City of Buenos Aires City is an important -but in no way a leading- participant. Our administration participates in ACUMAR, the main authority responsible for the Matanza-Riachuelo basin. It is important to point out that ACUMAR’s president is nominated by the national government, and its leadership is composed of three members of the federal government, two from the Buenos Aires Province, and two from the City of Buenos Aires. Responsibility and decision-making capabilities are therefore shared by these three different levels of government.

    Finally, you claim that “The city has not yet addressed the sad fact that there are only 35 inspectors for the more than 16,000 companies located along the river, slowing the pace of clean-up work”. To inform your readers correctly, you should have clarified that the thirty five inspectors mentioned in the article belong to ACUMAR, not the Government of the City of Buenos Aires. The City’s Environmental Protection Agency (APRA) employs one hundred inspectors which devote considerable effort to communes belonging to the Matanza-Riachuelo basin zone. Furthermore, the number of companies located along the river in the city’s territory is estimated at 2,435 (according to figures from November, 2013) not 16,000 as mentioned in the article.

    I trust this information will help you in understanding the social development policies being implemented in the city of Buenos Aires under the leadership of Mayor Macri, and will be reflected in future articles on our work. This administration is driven by the belief that the Buenos Aires of modern and inclusive growth can become a driving force for change in Argentina as a whole, and is committed to working to achieve the bright future it envisions for all Argentines.

    Sincerely,

    Fulvio Pompeo
    Undersecretary for International and Institutional Relations
    Government of the City of Buenos Aires

    Reply
    • February 27, 2014 at 12:43 pm
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      Mr. Pompeo,

      Thank you for taking the time to respond to my article “The Two Worlds of Buenos Aires” (January 7, 2014) and start a constructive dialogue. Several of your points are persuasive and have changed my thinking about specific issues, and I have made some minor revisions in response to your comments. That said, I would challenge you on some of your criticisms and address your comments point by point.

      1. It is not my contention that all of the fault for the current communication breakdown lies with Mr. Macri, and I have modified the language in the article to reflect this. Nevertheless, I am not persuaded that animosity and lack of willingness to negotiate is solely present on the parts of Scioli and Kirchner. Throughout Mr. Pirovano’s September 2013 presentation at the Center for Strategic and International Studies in Washington, the Argentine national government was portrayed as a joke (and many people laughed), indicating a disdain that is not conducive to substantive political relations. I am sure that we can agree that a renewed effort on the part of both Mr. Macri and his counterparts at the province and national levels to improve cooperation would be beneficial.

      2. After extensive searching, I am unable to find the graph you cited, but I am pleased to hear that the city of Buenos Aires has achieved such a notable reduction in inequality. However, a reduction in the Gini coefficient does not mean that the city’s work is done. There are numerous potential causes for such a shift, not all of them are necessarily positive. Growth in the middle class, certainly a positive phenomenon, could lower the gini coefficient while not necessarily improving the fortunes of the poorest porteños. Additionally, impoverished Argentines being priced out and displaced from the city into the surrounding metropolitan area could contribute to such a trend. While this is largely speculation, as further research would have to be conducted in order to get to the root causes of this decline in inequality, I simply intend to point out that a declining gini coefficient does not correlate exactly with improved quality of lives for those in the villas of Buenos Aires.

      3. I think that you are absolutely correct in saying that development in those neighborhoods can have positive external economic effects. However, these “districts” also have the potential to increase prices in those neighborhoods to the point where people are forced to move elsewhere, effectively creating gentrification in Parque Patricios and Barracas. Additionally, are these districts the best way to develop marginalized neighborhoods? By bringing in young tech or design workers who go to their offices during the day and then return to their homes at night, probably in other parts of the city? Perhaps I’ll be proven wrong, but I’m not convinced, and I believe that a concerted effort at neighborhood development aimed at creating jobs for those who actually live there would generate better results.

      4. I think that your correction here is disingenuous, in that you quote nominal figures for the budgets while not accounting for inflation, which independent economists estimate at 25% in 2013. While Mr. Macri is obviously not responsible for changes in Argentina’s inflation rate, failing to increase the social housing budget enough to account for inflation is functionally the same as reducing the budget. Please check the citation for my source on the numbers included in the article.

      5. I apologize for failing to mention the shared nature of the jurisdiction over the Matanza River, and I have added language that points to this fact, but my point still stands. More needs to be done to resolve the environmental catastrophe taking place and to mitigate its effects on those living on the river’s banks. Pointing out that responsibility is shared does not absolve Mr. Macri’s administration from its obligation to act or push for action. I have changed the number of companies along the river to reflect your suggested total and mentioned the Environmental Protection Agency’s additional inspectors.

      Thank you again for your comments, and I’d love to hear more of your opinions on this important issue.

      Reply
  • March 19, 2014 at 10:40 am
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