The Limited Times

Now you can see non-English news...

Country in the economic crisis: Arg, anger, Argentina

2019-09-11T15:25:28.553Z


Hunger, desperation, fear of falling: Argentina is rife with inflation and poverty. Protests against the government are forming on the streets. The only one goal is to hold out until the elections in late October.



Shampoo against kids sneakers. Stuffed dumplings for a pair of jeans. "Las Guerreras", the warriors, the women in the quarter Antártida Argentina in the bacon belt of Buenos Aires called their WhatsApp group. Around 300 women meet in chat for the barter and flea market, at least three times a week. There are hundreds of such improvised markets in the metropolitan area of ​​the capital alone.

The barter economy is the last resort for many who can no longer afford shopping.

Gabriela Retamal regularly participates: The 50-year-old lost her employment in a law firm three years ago. Since then she keeps herself afloat with bartering and flea market sales. Familiar and relatives donate their used clothing. "There is no work, I've tried it everywhere," says Retamal. "And even those who have a steady job can not handle the salary anymore."

In fact, according to figures from the state statistics agency Indec, a family currently needs 516 euros a month to survive. The minimum wage is around 200 euros a month. Half a year ago, a study by the Catholic University showed that 3.4 million Argentines eat only once a day.

AP

Soup kitchen in Buenos Aires (archive picture): The bad times are back

Nothing has improved since then, on the contrary. More and more people are sleeping on the street because they can no longer pay their rent. Hospitals postpone operations because dentures should be paid in dollars. In some of the soup kitchens, where many families get the only hot meal a day, there are now waiting lists.

The times were not golden either, when Mauricio Macri took office in December 2015. He had inherited an inflation of 26.9 percent from his predecessor Cristina Kirchner. But Macri promised a lot: inflation should go down. He wanted to fight poverty. At the beginning of his mandate, his Minister of Economic Affairs praised the fact that he knows of no country with as low a debt as Argentina, "except perhaps some country in sub-Saharan Africa or North Korea."

Macri and his crew have failed

Four years later, Argentina is again in debt. Inflation for 2019 is estimated at 55 percent. The national currency, the peso, was last devalued by 30 percent against the dollar in August. This makes all products from abroad more expensive.

Carlos Brigo / telam / DPA

Protests to the ministry: People are calling for an end to hunger

The sober economic data also beat the mood in the country. According to Ipsos' Global Happiness study, the results of which were published last week, only 34 percent of Argentines are happy. In 2018, it was still more than half.

The national debt now equals almost 90 percent of the gross domestic product. The government is behind with the payments. Argentine economists are looking for explanations in their analyzes for how it came to be. In one, liberals and leftists agree: Macri and his team have failed.

Tomas F. Cuesta / AP

Presidential candidate Alberto Fernández: The financial markets reacted in panic

Since the mid-August primaries, it has become clear that left-wing player Alberto Fernández has the best chance of being elected next president of Argentina on 27 October. The 60-year-old lawyer is regarded as a prudent strategist. For the elections, he entered into an alliance with Cristina Fernández de Kirchner - she would be his vice president. The duo clearly won the primaries with 47 percent. Kirchner back in power? The financial markets reacted in panic. The concern: Populism is on the rise. The prices of Argentine government bonds plunged, and interest rates that the country has to pay for new debt shot up.

The shock had been programmed and had nothing to do with the result of the primaries, but says the former Minister of Economic Affairs Roberto Lavagna, who also plays in the presidential elections. In recent years he has repeatedly accused the Macri government of attracting speculative capital in the first place - and no real investments. In addition, the lending funds of the International Monetary Fund (IMF) were used to finance capital flight. The center candidate Lavagna would like to lead the country out of the crisis, but as far as it looks so far, he has no chance to win the elections.

"People are hungry, and the government is not acting"

Argentina is long gone broke, says the economist Alfredo Zaiat. "If a country does not make debt payments and seeks to restructure that debt, what do you call it? I can not think of anything other than bankruptcy," says Zaiat.

Zaiat is one of those who critically questioned the policies of the Macri government from the beginning. Therefore, he was able to bring out a book on the crisis in August, shortly after a severe devaluation of the peso. The title: "Macrisis". "The Macri government does not seem to have realized the extent of the crisis," says Zaiat. "Take a look at food inactivity, people are hungry, and the government is not acting."

Juan Ignacio Roncoroni / EPA-EFE / REX

President Mauricio Macri (m.): First of all attracted speculative capital?

Zaiat is not alone in his view: the opposition wants to force the government to explain the food crisis. Then soup kitchens would receive more money and social programs would be strengthened.

Meanwhile, the government is trying to maintain its position. By the way, it is also an election campaign. With support purchases, the central bank tries to keep the peso stable - at the expense of the currency reserves. In order to curb capital flight, Macri restricted the purchase of foreign currencies last week. It is a measure that already existed under ex-president Kirchner and the Macri had previously demonized. For many Argentines, it is a déjà vu. They queued at the banks last week to withdraw their dollar credits. Once again they place bills in lockers, safes or under the mattress. As in the economic crisis of 2001.

Actually, there should be new money from the IMF on September 15th. But there they have not yet said if and when the next loan tranche of $ 5.4 billion will actually be paid out. Because even with the currency funds seems to have arrived now that Argentina is in the debt trap. If the IMF does not pay, it would be a further weakening of the Macri government.

One thing is clear: whoever wins the elections, Argentina will experience turbulent times.

Source: spiegel

All business articles on 2019-09-11

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.