By Alejo Álvez
Almost a year to the date, the government of Mauricio Macri still has nothing to show for any of the economic and social achievements promised during the campaign that led him to become the new president of Argentina on Dec. 10, 2015. On the contrary, the poverty and indigence rates have experienced a sharp increase, added to the loss of jobs, an out-of-control inflation, the closing of thousands of companies, a noticeable decrease of exports and a steep fall in sales in supermarkets and commercial centers.
The president believes, however, that the measures taken in the first three weeks of government — the exchange rate liberalization that brought on a devaluation of close to 40 percent and led to an annual inflation projected at 42 percent; the abolishment of the tax burden on agriculture and mining; the submission to blackmail of “vulture funds” of debt bondholders; the rise in electricity, water, sewage and gas rates of up to more than 400 percent and the repeal of the social legislation enacted during the terms in office of Cristina Fernández de Kirchner (2007-2015), among others — will bear fruit in 2017 and 2018.
This past April, the Argentina Catholic University’s Social Debt Observatory (UCA) — Alma Matter of the president and some members of his cabinet — said that Macri, in his three months in government, generated more poverty than former President Fernández did in her last four years as head of the executive branch.
On Aug. 10, the conservative university published the study titled “Tiempo de balance: deuda social pendiente” (“Time to take stock: the pending social debt”), in which it informed that from 2011 to 2015 poverty increased by 4.3 percent, reaching 29 percent, while in the first quarter in 2016 the increase was of 5.5 percent, now reaching 34.5 percent. When the UCA confirmed its April forecast, it assigned absolute numbers to its projections: as of April there are more than 15 million people in poverty in Argentina, of which 1.4 million joined the ranks of these social victims in the first semester of the year.
“Making up the figures”
It was the governmental National Statistics and Census Institute (INDEC) that on Sept. 29 assigned values to the Argentine drama. Slightly under the measurement published by the UCA, it said that in the first half of the year poverty stood at 32.2 percent of the population and 23.1 percent of the homes. Some 6.3 percent of these Argentineans are indigent who fall below the minimum dietary energy requirement estimated by the Food and Agriculture Organization of the United Nations (FAO).
After more than a year without collecting statistics, as a result of a closed offensive from the opposition led by Macri, which accused it of “making up the figures” to the convenience of the Fernández government, the INDEC resumed operations. In presenting this first report, Macri looked to implant the idea that he had inherited that 32.2 percent of poverty, not considering that, according to the UCA, he was the one responsible for the exponential increase in poverty in his first 10 months in office.
It was the Argentine Confederation of Medium-sized Enterprises (CAME) at the end of October who added its data to the INDEC indices. It said that the production of companies in the sector, the largest employers, registered a year-over-year decline of 5.4 percent and accumulated 10 consecutive months with loses. Days before, on Oct. 14, the INDEC had revealed that of the 576,807 companies registered in January, 5,251 of them had stopped operations before the closing of the third quarter. Approximately 118,000 formal jobs were lost.
On Oct. 31, a new study by the INDEC reported that industrial production had again had a sharp decrease of 7.3 percent in September compared to the same month of the previous year. Also, the construction sector, another of the large labor force sectors, shrank by 13.1 percent during the same period, blaming a regression of 12.8 percent during the first 11 months of the Macri administration.
According to the optimistic version of the technical staff of the government — 114 executives of multinational companies, domestic mega companies, and the largest law firms, occupy some of the 367 high posts of the bureaucratic structure of the state —, those measures taken during the first weeks were supposed to guarantee a boost on exports led by agribusiness.
Retraction of the demand
The result was not as expected. The statistics show that export sales have fallen by 1.8 percent so far in 2016. When making their calculations the experts forgot to consider that the global situation had led to a general decline in demand. “There are no magical solutions, the tax exemptions to agricultural products and the devaluation was not enough to boost exports,” a study of the state run National University of San Martín pointed out.
In this unfavorable context, with high inflation and a drop in employment, it is logical to think that domestic demand also diminished. The INDEC reported on Oct. 19 that the drop in sales of foodstuff in supermarkets continues, appearing 3.6 percent lower in September compared to August, the worst showing so far this year. The same occurred with invoicing from commercial centers, which contracted by 17.9 percent. Supermarkets and commercial centers, along with construction, were the sectors that saw most of the layoffs.
Despite these reports, the Chief of Staff Marcos Peña, in his last mandatory appearance before Congress, agreed almost verbatim with a mission of the International Monetary Fund (IMF), the first one after the government of Néstor Kirchner (2003-2007) broke with the dependency on this organism.
“It is important to congratulate the president [Macri] for his compromise to lower inflation, poverty and unemployment,” the mission chief of the IMF, Roberto Cardarelli, had said at the end of the visit that took place on Sept. 19-29, while Peña stated that “we can now see the light at the end of the tunnel, the country is taking off with an incredible momentum.”
Staying in tune, Production Minister Francisco Cabrera, appeared surprisingly pleased with the situation of the companies in the industrial sector that moved up the vacation time of their employees or announced a rotation system of work suspensions.
“These suspensions are excellent news”, he said. “This means that the companies trust the government and they resist having to fire their workers.