Buenos Aires, Argentina – As October 22, the date of the presidential elections, approaches, the poverty and indigence data for the first half of 2023 in Argentina was known, which grew compared to the same period in 2022. For its part, the International Monetary Fund criticized recent measures of the Government and put cold cloths on the project dollarizer of the extreme right candidate Javier Milei.
The poverty rate for the first half of 2023 in Argentina was 40.1%, while indigence reached 9.3% of the population. The impact was greater among boys and girls up to 14 years old: 56.2% of them are poor and 13.6% are indigent.
In a press conference, the spokesperson for the International Monetary Fund (IMF), Julie Kozack, said that a series of measures taken by the Government of Alberto Fernández, which increased State expenses, “exacerbate Argentina’s difficulties.” She also made reference to the limitations of dollarization, an idea proposed by libertarian presidential candidate Javier Milei.
To try to reinforce dollar reserves, the Executive announced partial access to a more favorable exchange rate for gas and oil exporters, something it has been doing with soybean exporters.
In the elections for the governorship of the province of Mendoza, the opposition candidate of Together for Change won, which has been consolidating in this year’s provincial elections.
Tens of thousands of women marched on Thursday on the Global Day of Action for Access to Legal, Safe and Free Abortion.
And, finally, the most powerful computer in Argentina, Clementina XXI, began to work.
Let’s review in more depth what this week leaves us in Argentina on the eve of the first presidential debate on October 1 and the electoral campaign ahead of the presidential elections on October 22.
Poverty grew in Argentina
In the first half of 2023, 40.1% of the Argentine population – 18.7 million people – were poor, while the indigence rate was 9.3%, as reported on Wednesday by the National Institute of Statistics and Censuses of Argentina.
In the case of poverty, it was an increase of 3.6 percentage points compared to the first half of 2022, and in indigence the growth was 0.5 percentage points. The impact of poverty is greater among boys and girls up to 14 years old: 56.2% of them are poor and 13.6% are indigent.
According to a report by the Argentine Political Economy Center, the increase in poverty and destitution is explained, among other things, by the sharp increase in food prices (in a context of high inflation, which is above 124% annually ), and by a relative fall in income in many sectors of the population, even when unemployment is low. The situation could worsen in the second half of 2023, due to the impact of August inflation, which was 12.4% monthly.
Measures
The Government launched two aid bonuses, which will be paid on October 15 and November 15, for up to 2.8 million people who work informally and do not have social coverage. On each of those dates they will charge 47,000 pesos (60 dollars at the parallel exchange rate). They add to a series of aid measures for almost all social sectors announced in recent weeks, in the middle of the electoral campaign.
An important tax modification was also recently finalized, signed into law this Thursday by the Senate, which greatly limits who pays the income tax (income tax in some countries), something promoted by the Minister of Economy Sergio Massa, candidate for the Presidency of the ruling party, who for years has insisted on this change.
NO WORKER WILL PAY PROFITS AGAIN
For more than 10 years I have been maintaining that #Salary is no earning, but it is payment for the work they do every day. From now on, the elimination of Income Tax for workers is a reality. pic.twitter.com/62RAZ0XARk
— Sergio Massa (@SergioMassa) September 29, 2023
Since October of this year, only those who earn more than 15 minimum vital and mobile salaries will pay income tax, today 1,770,000 pesos (about 2,240 dollars at the parallel exchange rate).
All the announced measures have an impact on public accounts, by increasing spending and reducing income.
IMF comments on measures and dollarization
On Thursday, IMF spokesperson Julie Kozack said at a press conference that the aforementioned measures “exacerbate Argentina’s difficulties,” and that they are basically evaluating their impact and “the need for compensatory actions that could be adopted to strengthen the stability”.
The agreement with the IMF for the debt of 44 billion dollars contracted by Argentina in 2018 requires a series of policies, including the adjustment of State spending, which is impacted by the measures announced by the Government.
Kozack also referred to the proposal to dollarize the economy supported by the far-right candidate Javier Milei (although he is also referring to alternatives, such as free currency competition).
He said, first of all, that while “determining an exchange rate is the prerogative of a sovereign nation,” the IMF’s main concern when talking to countries about the issue is that “macroeconomic policies are consistent with an orderly transition between exchange rates”.
And he added that in case of making a decision of this type, “it is important to guarantee the long-term viability of the exchange system that is finally selected.”
Furthermore, Kozack added that “it is important to guarantee the long-term viability of the exchange system that is finally selected.”
It is something that Argentina could not do towards the end of the convertibility between the dollar and the peso, which collapsed after the 2001 crisis: quasi-currencies issued by the provinces began to emerge to pay their employees, given the impossibility of obtaining pesos. The situation could be repeated in dollarization if, for example, provinces and municipalities face difficulties in accessing that currency to meet their expenses.
“Dead Cow” Dollar
The Executive announced that in October it will allow oil and gas exporters to collect 25% of the dollars they receive at the “Contado Con Liqui” (CCL) exchange rate, a financial exchange rate that is well above the exchange rate. official. This benefit will apply, in principle, for one month.
They call it the “Vaca Muerta” dollar in reference to the geological formation of that name, in the Patagonian province of Neuquén, which contains the second largest reserves of shale gas in the world and the fourth largest reserves of unconventional oil.
It is similar to the benefit that the Government has given to soybean exporters, as an incentive for them to liquidate their sales abroad and thus bring dollars into the country. With the “Vaca Muerta” dollar, the Executive hopes to raise about 1.2 billion dollars.
The opposition of Together for Change wins the governorship of Mendoza
Last Sunday the elections were held for the governorship of the province of Mendoza, bordering Chile, the country’s main wine producer. In addition to wine, the main economic activities of the province, which is the fifth most populated district in the country, behind the Autonomous City of Buenos Aires, are agriculture, mining and tourism.
The senator of the Radical Party Alfredo Cornejo won the elections and will return to the Executive of the province that he governed between 2015 and 2019. Radicalism, which is part of the opposition alliance Together for Change, thus maintains the governorship of Mendoza, which today is in hands of Rodolfo Suárez. In second place, with a 10 point difference, was Omar De Marchi, former Together for Change and today close to Javier Milei; and in third place the Peronist Omar Parisi.
From the national perspective, the presidential candidate of Together for Change, Patricia Bullrich, celebrated Cornejo’s victory. Together for Change hopes to replicate the successful electoral series that it has had in the provinces in the October general elections, although the August primaries, and various analyzes and surveys, show that the results of the local elections are not necessarily extend to the national ones and that, in fact, are different in agenda and in voter behavior.
March in defense of access to abortion
On Thursday, tens of thousands of women marched in different parts of Argentina on the Global Day of Action for Access to Legal, Safe and Free Abortion.
Although the Argentine Congress legalized abortion at the end of 2020, there are still limitations on access.
And there is also concern regarding positions, such as that of the candidate Javier Milei, against legal abortion, so the demands transcended the issue of voluntary interruption of pregnancy and were transversal in demanding a cordon sanitaire against the far-right policies.
Clementine XXI
On Wednesday the Clementina XXI computer began operating, in the National Meteorological Service Computing Center. It is one of the 100 most powerful computers in the world and the one with the greatest processing capacity in Argentina.
It is 40 times more powerful than the fastest computer in the country before its arrival.
The entire national Science and Technology System will be able to use Clementina XXI. In 1960, the first computer for scientific use that Argentina had had arrived in the country. Her name was Clementine.
#Argentina #rising #poverty #criticism #IMF #strong #opposition #governorates