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6. Buenos Aires: A case of deepening social polarization

Population growth and structure
The urban economy
Income distribution
Living standards
Urban administration
Service provision
Population density and land-use structure
The environment
Conclusions
Notes
References

Luis Ainstein

The city of Buenos Aires was founded by the Spanish on low-lying land on the right bank of the River Plate. This was a magnificent choice. At the mouth of the country's major river and on the edge of one of the most fertile regions in the world, the city was bound to expand as Argentina became incorporated into the world economy. By the beginning of the twentieth century, Buenos Aires had become one of the world's greatest cities. During the next half-century its population was to increase massively. Again its location brought a major benefit; the flat terrain allowed the city to expand with virtually no physical constraint. Over the years, the site has posed only one real problem, poor drainage. The Reconquista and Matanza-Riachuelo river systems have never managed to cope with a climate prone to sudden bursts of rain; certain parts of the city have always had to face the danger of floods.

Population growth and structure

Buenos Aires played an insignificant role in the Spanish Empire. It had little of the economic and political importance of Lima and Mexico City and did not develop significantly until the end of the colonial period. It was only when independence permitted Argentina to trade directly with Europe that the country's rich resources guaranteed Buenos Aires an international role. With its port located at the heart of the rich pampas, the city began to flourish as a major transshipment centre. When Juan Manuel de Rosas, the governor of Buenos Aires, established political control over the country during the 1830s, the city's economic future was virtually guaranteed (Scobie, 1963: 77). It began to expand rapidly and during the latter half of the nineteenth century its growth was spectacular. By 1914, it had become one of the world's great cities.

Table 6.1 Population of Buenos Aires and Argentina

Table 6.1 shows how quickly the populations of both Greater Buenos Aires and Argentina grew between 1869 and 1914. Both received large flows of immigrants from Europe and, in 1914, 30 per cent of the country's population had been born abroad. After 1914, when the number of immigrants into Argentina began to fall, Buenos Aires grew more slowly. Slower growth was accentuated by the fact that national fertility rates fell very early. Thereafter, the urban population was never to grow as rapidly as that in most other Latin American countries.

Buenos Aires and the pampas have long dominated Argentina. The pampas provided most of the country's export revenues and after 1920 industrial development further increased the region's economic importance. Throughout the twentieth century, seven out of ten Argentines have lived in the pampas region and around one-third in the national capital. For more than a century, Buenos Aires has been an extreme example of a "primate" city. In 1971, no fewer than 36 per cent of all Argentines lived in the capital.

It was only when Argentina's economy started to languish in the 1960s and import-substituting industrialization ran out of steam that the national dominance of Buenos Aires began to weaken. During the 1970s and 1980s, the city's share of the national population gradually fell. The decline in national prominence, however, should not be exaggerated. In 1991, Greater Buenos Aires still had ten times more people than Córdoba, the country's second largest city.

Figure 6.1 Urban expansion of Greater Buenos Aires, 1536-1991

Today, the metropolitan area covers a vast area of some 3,900 square kilometres. It overspilled the 200-square-kilometre area of the Federal Capital as early as 1869 (figure 6.1) and most of the city's subsequent expansion has taken place in the Province of Buenos Aires. Since 1947, the population of the Federal Capital has barely changed and, in 1991, it contained only 37 per cent of the city's total population.

The urban economy

It is difficult to find economic data for the whole metropolitan area, because most statistics are computed either for the Federal Capital or for the vast area covered by the Province of Buenos Aires. Nevertheless, the city's key role in the national economy is clearly indicated by the fact that the Federal Capital alone generates almost one-quarter of Argentina's gross national product. The city's dominance is most obvious in tertiary activities: in 1989, the Federal Capital generated one-third of the nation's value added from tertiary activities. Buenos Aires contains most of the federal government's offices and the headquarters of many major businesses, particularly those concerned with trade and finance.

Since 1980, however, the economic health of Buenos Aires has been poor. Economic activity in the Federal Capital declined between 1980 and 1985, although it managed to grow slowly during the rest of the decade. The city's fortunes mirror the difficulties faced by the Argentine economy as a whole. They also reflect the impact of industrial deconcentration on the metropolitan area; the secondary sector declined by almost 9 per cent between 1980 and 1989. Between 1974 and 1985, more than 200,000 industrial jobs disappeared from the metropolitan area. Since 1985, economic growth has been maintained only by the expansion of the tertiary sector. Finance, insurance, and real-estate services have constituted the most dynamic activities in the city.

During the 1980s and early 1990s, Greater Buenos Aires suffered from a serious employment problem. Unemployment rose from 2.3 per cent in April 1980 to 7 per cent in October 1989. By May 1993, unemployment had achieved a twenty-year peak of 10.6 per cent. Underemployment also increased, from 4.7 per cent in 1980 to 8.2 per cent in 1993. Women and young people, particularly those with low levels of formal education, have been the worst affected.

Rising unemployment and underemployment reflect longer-term trends in the national economy. Trade liberalization has meant that more manufactured imports have entered the country and, since 1985, employment in the secondary sector has been in decline. Fortunately, the expanding tertiary sector has absorbed more workers. Between 1974 and 1985 some 120,000 new jobs were created. By 1992, tertiary activities provided 70 per cent of all jobs in the metropolitan area (INDEC, 1992).

Continuing economic problems, secular shifts in lifestyles, and major reforms introduced by the administration of Carlos Menem have brought important changes in the structure of the labour force. Female participation has increased significantly, from 25.6 per cent of the workforce in 1980 to 29.3 per cent in 1992, and is principally explained by the need to sustain family incomes at a time of rising unemployment and falling wages. Casualization of the labour force has also been increasing and working conditions have deteriorated substantially. Official rules and regulations are increasingly being ignored and, as table 6.4 shows, illegality has become the norm. Many new jobs have been created in activities with very low levels of productivity.

Table 6.2 Population growth of Buenos Aires by municipal area, 1970-1991

Source: Author. based on data from the National Population and Housing Censuses of 1970, 1980, and 1991.

Table 6.3 Occupation and employment in Greater Buenos Aires

Sources: INDEC, 1992; Lindenboim, 1985.

Table 6.4 Labour contracts in Greater Buenos Aires, 1990 (percentages)

Source: INDEC, 1990.
a. Because these are non-exclusive categories they add up to more than 100 per cent.

Income distribution

Argentina began to suffer from economic decline and falling per capita incomes in the early 1970s. Economic problems generated political unrest, which gave rise to an extended period of military rule (1975-83). The authoritarian phase introduced a development model which accentuated income inequality.

Table 6.5 Distribution of income in metropolitan area, 1984 and 1989 (percentages)

Source: INDEC, 1992.

Unfortunately, the return of democracy in 1983 made the distribution of income in Buenos Aires even more unequal. Table 6.5 shows that the difference between the income share of the richest and poorest deciles rose from 10 times in 1984 to a startling 23 times in 1989. Growing inequality was associated with increasing poverty during a period when the gross domestic product grew by only 1.4 per cent and when the country was suffering from hyperinflation. Whereas the incomes of the richest 10 per cent increased by almost 60 per cent, those of the poorest seven deciles fell by approximately 30 per cent. Whether considered in absolute or relative terms, the rich have become much richer, the majority much poorer.

Living standards

A major comparative study of poverty in Latin America has used two different criteria of impoverishment. An Index of Unsatisfied Basic Needs attempts to identify the "structural poor" and is based on indicators such as the physical quality of housing, the level of overcrowding within the home, sanitary conditions, schooling of the children, and the earnings potential of the household. The second measure is designed to identify those who have become "impoverished." It is based on a poverty line below which a family cannot afford to purchase a basket of essential goods and services. Those who cannot even buy the food in the household basket are classified as living in extreme need.

Studies comparing living conditions in Buenos Aires and the rest of Argentina show that structural poverty is much less marked in the metropolitan area than in the country as a whole (CEPA, 1992; CEPA, 1993). However, averages can be deceiving and parts of peripheral Buenos Aires are just as deprived as other regions of the country.

Table 6.6 Poverty in the metropolitan area of Buenos Aires (percentage of households)

Source: Minujin, 1992.

Table 6.6 shows that, during the 1980s, although the share of the population living in "structural poverty" remained virtually stationary, the proportion living below the poverty line increased dramatically. Indeed, by 1990, the latter group made up 35 per cent of the Buenos Aires population. Many of the poor included families previously classified as middle-income.

The effect of poverty is apparent in terms of differences in health care between income groups. The proportion of pregnant women receiving medical attention during the first three months of pregnancy is 83 per cent for the non-poor but only 62 per cent for the "structural poor" and 67 per cent for "impoverished" groups. The poor also have more children, the structurally poor averaging 6.6, the impoverished 4.4, and the non-poor 2.9 (INDEC, 1990). Family size is clearly linked to rates of contraceptive use: whereas only 23 per cent of the "structural poor" use some form of contraception, the rate rises to 33 per cent among the "impoverished" groups, and to 45 per cent among the non-poor.

Hyperinflation during the late 1980s had a major impact on the number of people living in poverty or in extreme need. The latter category made up a startling 12.7 per cent of the total population in October 1989, although this had fallen to 2.4 per cent by May 1992.

Levels of poverty vary greatly between different areas of the metropolitan area. At its peak in 1989, indigence in 10 districts of outer Buenos Aires reached 22 per cent compared to 13 per cent in the city as a whole (CEPA, 1992).' Table 6.7 shows how housing and sanitary conditions vary between inner and outer areas of the city; access to the main drainage system varies considerably. It also compares living standards in three areas of the city with very different average incomes (Vicente López in the north of the First district, General Sarmiento in the west of the Second district, and Florencio Varela in the south of the Third district; see figure 6.2). There are major differences in terms of the education of heads of household, with some 29 per cent of heads having an incomplete primary education in Florencio Varela compared to 7 per cent in the Federal Capital.

Table 6.7 Buenos Aires: Quality of life by area, 1981) and 1991

Source: CEPA, 1993.

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