Getting by without money

SUN JOURNAL

Barter: In South American countries where currency is scarce, a parallel economy springs up.

May 18, 2002|By Hector Tobar | Hector Tobar,SPECIAL TO THE SUN

VALPARAISO, Chile - In certain neighborhoods of this bohemian port city, you can get your teeth cleaned, have your water heater fixed or munch on a loaf of homemade bread without spending any money.

All you need are "talents."

That's the name the Valparaiso bartering club has given to its official "currency," little beige certificates that resemble the Community Chest cards in a Monopoly game. A club member might pay you 30 talentos if you fix her kitchen faucet. Take those talentos to the Wednesday night bartering fair, and you can trade them for jars of homemade preserves (two talentos each) or some jewelry (five talentos and up).

With money in short supply here and elsewhere across South America, barter (known as trueque in Spanish) is the engine driving a thriving parallel economy in which millions of dollars in goods and services circulate in a self-perpetuating stream of cashless exchanges.

Bartering clubs such as the one in Valparaiso can also be found in the rural towns of Argentina's southern region of Patagonia, in the impoverished suburbs of Buenos Aires (which has more than 60 clubs) and in slightly better-off communities in Uruguay and Brazil.

In an era of scarcity and social upheaval, South America's barter fairs are a home-grown remedy for empty cupboards and frustrated shoppers, especially among the poor and the middle class.

"It bothers me that everything in our society revolves around money," says Christian Palma, explaining why he helped launch Valparaiso's barter fair two years ago. "We're trying to reinvent the idea of a marketplace and create new types of social ties."

Not everyone is pleased by the spread of the clubs, which were founded in the late 1990s but have been adding members at a rapid pace in the turbulent economic climate of the past year.

A few observers see in the trueque explosion a sign that the region's economy is coming apart, even as some merchants feel that they're being hurt by unfair competition.

In some communities hit hard by unemployment and recession, barter has spread beyond the clubs. The city government of Allen, near the Andes in south-central Argentina, allows residents to pay their municipal taxes by bartering.

"People who are going through hard times, who are unemployed or underemployed, can cover their city debts with goods or services," says Mirta Diomedi, the municipal finance secretary.

Nine in 10 Allen residents are in default on their city taxes, and the local government is so cash-poor that its phones were recently cut off. Now backyard mechanics can pay off their taxes by fixing city-owned trucks. A man with a photocopier churned out hundreds of copies in lieu of 120 pesos in taxes (about $40).

Argentina is home to the continent's largest bartering fairs, with about 1 million members in the nationwide Barter Solidarity Network. Trueque boomed in Argentina after the government partially froze most savings accounts late last year and began declaring intermittent bank holidays that forced most Argentines to empty out their wallets to survive.

"The only miracle the crisis has produced in Argentina is el trueque," says Exequiel Fernandez, a board member of the barter club in Rio Colorado in Patagonia.

Argentina's crisis is only the most extreme case of a continent-wide phenomenon that has seen most governments slash budgets and devalue their currencies. In such a climate, doing business without money has a certain appeal.

Most barter fairs are organized by neighborhood activists of varying stripes. For them, trueque is, all at once, a grass-roots rebuff to U.S. commercialism, a self-help alternative to charity and government handouts, and a way to rebuild a sense of community.

"The idea is that you have to put something in to get something back," says Palma of the Valparaiso bartering club.

In the Argentine town of Rio Colorado, the barter currency is called a credit, or credito.

Fair organizers estimate that 60,000 creditos are in circulation in Rio Colorado, home to about 15,000 people at the northern fringe of Patagonia. The town has two bartering fairs with 1,000 families as members. Most clubs require membership as a way to enforce rules, including the most common: Everyone must bring something to sell.

On Sunday afternoons, hundreds of people descend on the site of the largest fair, the main building of the town's business school. Young mothers pedal in on bikes loaded with homemade cakes. Taxi drivers - many of whom accept creditos for their fares - drop off farmers with crates of apples, grapes and plums.

Young porters - also paid in credits - help the sellers carry their goods to rows of long tables inside. Two tall bulletin boards list all the local service providers who have signed up to offer their labor for barter, including four doctors, about two dozen bricklayers and 40 house cleaners.

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