Economy, Globe, Latin America, United Kingdom

The Argentine economy needs ‘turning upside down’

“There’s not enough money” can be heard in the streets, meanwhile the constant fall of industry and employment are common headlines, just like the elections that are marking an Argentina where many do magic with their salaries.  

 

Maylín Vidal

 

Used to overcoming the bad economic streaks that this southern nation has experienced, privileged by nature, Argentineans are today experiencing a genuine crossroads between presidential elections, where their future will be defined for the next four years, and the complex situation that intersects with the cyclical economy that is not picking up.

The social indicators are not at all promising. The dollar, the head of the government, Mauricio Macri’s dollar, is still intermittent and putting pressure on the already-devalued national peso. The fall of industry, construction, employment, consumption and the rise of inflation are words that are becoming common in popular jargon.

And this inflation is a daily issue.

Prices in shops vary every morning while salaries continue falling and many organisations find themselves on their feet fighting in the street to reopen salary negotiations and the loss caused by a dollar that was worth 45 pesos before 11 August and is now up to 60.

More than 184,000 job positions were lost this year. According to a local television station, there are three million more homeless people.

Living in Argentina, one of the richest Latin American countries in the world, is hard, and recently the National Institute of Statistics and Census stated that at the present moment, at least 33,000 pesos (550 dollars by today’s exchange rate) is needed not to fall into poverty, this is more than two minimum wage salaries.

In just one day, the results of the primary elections indicated a before and after for an economy that was already in intensive care, obliging President Mauricio Macri, in the final stretch of his time in government and seeking re-election, to take urgent measures; half measures in an increasingly complex situation.

From freezing fuel prices for 90 days, regulations that remained in place after an attack on two important refineries in Saudi Arabia, forcing up the price of petrol by 4% in Argentina, to even removing VAT from 13 staple food items.

Squeezed in the middle of a crisis that he is navigating, the President also resorted to a decree out of need and urgency that puts restrictions on access to the purchase of dollars until 31 December.

The legislation states that until the final day of the current year, the exchange value of exporting goods and services must enter the country in foreign currency and/or be negotiated on the exchange market according to the conditions and terms established by the Central Bank.

Nevertheless, the dollar continues to be intermittent at the moment, a month away from the presidential elections, and tension is mounting in many people who, since the government’s decision, have gone out and withdrawn their deposits in this currency.

According to local media, until now 3,355 million dollars have left the banks, although there is still no stampede of depositors, but the tendency to withdraw was accelerated by fear, for many, of what they experienced in 2001. Today, the Chancellor of the Exchequer, Hernán Lancuza, is trying to get the International Monetary Fund to disburse the final part, consisting of 5,400 million dollars of the 57,000 million requested as a loan, whilst on a visit to Washington, and he is also seeking to renegotiate the debt.

Financial uncertainty reached an all-time high in September. Whilst the average food shop registered an increase of 3.4% in August and 164% over four years, to buy essential food items in Argentina today, a typical family with four members needs to allot at least 13,000 pesos of their salary (just over 216 dollars by the current exchange rate).

As well as paying for expenses, rent, electricity, gas, mobile phone charges which have been increasing in recent months and transport, the food shop is increasing little by little while salaries fall.

What is certain is that there are three weeks left to the presidential elections on 27 October, with six candidates, all men, battling for the highest political position in a key country in Latin America. Argentineans will have to decide whether to continue with the current policies or turn the country upside down. (PL)

(Translated by Donna Davison. Email: donna_davison@hotmail.com) – Photos: Pixabay

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