Argentina: Bohemian recession
Charles McCarthy
Board Member at Executive Recruitment Management. Senior Political Analyst.
As 2019 begins, Argentina’s economy is still stuck in a prolonged recession. Mr. Macri’s administration continues pushing the South American nation into the abyss, as a result of his failed economic policies, along with the figures to prove it.
Inflation during 2018 reached a staggering 47.6%, Argentina’s highest since 1991. Even more confusing is the fact that Argentina’s Treasury Minister, Mr. Nicolas Dujovne, had reassured markets that the target inflation was 15%, as recently as late April 2018.
At the time, Mr. Dujovne also claimed that inflation would be coming down. Unsurprisingly, he was challenged by a Bloomberg reporter, questioning that 15% seemed unrealistic. Mr. Dujovne doubled down on his statement, responding that he thought they would be “pretty close” to the target. That was only 9 months ago, when the Argentinian Peso was trading at 20.18 per U.S. Dollar. Today, it is roughly half its value.
Not even close
And while the target inflation was 15%, 2018 saw Argentina’s highest inflation rate in 27 years, exceeding the target Mr. Dujovne had pledged by more than 200%.
Surprisingly, not even during Argentina’s financial crisis of 2002, which forced it into bankruptcy and default, had the country seen such poor economic results.
Gross domestic product (GDP), or the total value of goods and services produced in the country during the year, shrank by 2.4%. In essence, the country’s economy is weaker today than when Mr. Macri’s administration began, over 3 years ago.
With less than a year to go, Mr. Macri will be handing over to the next administration a country with a weaker economy, more debt, higher unemployment and poverty. But before that happens, Argentina is likely to continue its downward trend.
A country that feeds the world, while its children starve
Argentina is not only a country with vast natural resources, but also a leading producer and exporter of multiple agricultural crops and livestock.
Yet child poverty, a forward-looking indicator of social equality and future development, has risen during 2018, reaching a record 48%. UNICEF has indicated that this figure does not reflect the latter half of 2018, which should result in a higher percentage in the next measurement.
Mr. Macri’s administration has done nothing to improve social inequality. Quite the contrary, his policies have exponentially increased the gap between the rich and the poor, pushing millions below the poverty line.
How did he do it? He eliminated the majority of subsidies to public services, which were essentially financial aid to support social development. As a result, Argentinians must now spend a considerable portion of their income to have access to electricity, heating gas, water and transportation.
These actions have been excruciating for the elderly and retired, as they were forced to have their pensions cut and later diluted due to high inflation, leaving them with little disposable income for food and medications.
Simultaneously, he gave tax cuts to the agriculture and mining sectors, while favoring his own companies.
Birds of a feather flock together
Far from doing anything to improve living conditions for the needy in Argentina, Mr. Macri has found a partner with whom to beat the drum for right-wing extremism in the region.
Disastrous diplomacy
Mr. Macri recently hosted the Crown Prince of Saudi Arabia, Mohammed Bin Salman, in his first international trip after the assassination of journalist Jamal Khashoggi.
Yet he forgot to welcome Mr. Emmanuel Macron, the President of the French Republic.
Fallen Heroes
Ruthless methods were used by Mr. Macri’s administration to subdue anyone who opposes the crusade for the rich and powerful, in detriment of the needy and poor.
Just to name a few examples, there is the case of Milagro Sala’s illegal arrest, which was questioned by Amnesty International and a long list of American and European academics.
There is also the case of Santiago Maldonado, a peaceful demonstrator that died while supporting indigenous rights. Santiago was violently raided by a military force, resulting in his drowning.
Yet another example was Mr. Hector Timerman, Argentina’s former secretary of State, who recently passed away after his courageous fight against cancer.
Mr. Timerman was targeted by Mr. Macri, along with the corporate media conglomerates supporting the President, with a smear campaign and false accusations.
Mr. Ronald Noble, the former Head of Interpol, was unequivocal in his statements relating to these accusations. Upon Mr. Timerman’s death, Mr. Noble took to Twitter with the following:
2. In each and every interaction I had with him while I was#INTERPOL#SecretaryGeneral,#Timerman wanted to make sure that the#AMIA#RedNotices remained in force.
3. Hopefully,#Argentina's judiciary will finally ask#INTERPOL officially, as it should have done years ago: "Did#Timerman or anyone from#Argentina ever ask#INTERPOL to remove or suspend the#AMIA#RedNotices?" The answer will be “No. . .not ever"
Mr. Noble became Interpol’s first American secretary-general and the youngest at the time of his appointment. Prior to his time there, he worked as a public servant in various U.S. government agencies, including the District Court for the Eastern District of Pennsylvania, the Department of Justice and the Treasury.
As an honorable public servant, Mr. Noble considered Mr. Timerman a person of integrity, dedicated to its beloved Argentina and its people.
In addition, he was clear on how Argentina’s corporate media constantly misled with false reporting, including the false accusations from Argentina’s corrupt judiciary.
A heavy burden
This year is expected to be Mr. Macri’s last in office. His administration has been plagued by corruption, failed economic policies, skyrocketing unemployment, staggering inflation and a spike in poverty.
Many had expected Mr. Macri’s administration to be a complete failure. Back in late 2015, Fortune had an article indicating that Macri’s victory was bad news for Argentina. The article indicated that Mr. Macri was clearly against a government role in promoting Argentina’s industry, resulting in the country’s development suffering.
It would seem that Mr. Macri only disappointed those who gave him their support.
Argentina’s soaring national debt will be a heavy burden that the next administration will have to manage, while hoping that interest rates do not continue increasing.
Forgotten are the promises of zero poverty, economic growth, prosperity and joy.
Unless Argentina’s electorate has masochistic desires, the marginal victory Mr. Macri obtained in 2015 should be easily reversed this year, resulting in a more competent administration taking office.
Perhaps Mr. Macri will finally be able to pay the millions in debt he owes to the Argentinian State in connection to the privatization and bankruptcy of its national postal service. After laundering millions in Panama and Bahamas, Mr. Macri should be able to pay his dues.
And while Argentina will have to deal with daunting challenges, its people will find a way to overcome them.
After all, they have done it in the past.
Blog site: https://chuckmccarthy.wordpress.com/
Message from the author:
Special thanks to the many who collaborated in the drafting of this article. Your hard work and dedication do not go unnoticed. Feel free to share the article among your friends and network. Changing the world is possible, a person at a time.
Link to previous articles:
www.dhirubhai.net/pulse/argentina-crocodile-tears-charles-mccarthy/
www.dhirubhai.net/pulse/argentina-bread-circuses-charles-mccarthy/
www.dhirubhai.net/pulse/argentina-repeating-history-charles-mccarthy/
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www.dhirubhai.net/pulse/argentina-lost-identity-charles-mccarthy/
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www.dhirubhai.net/pulse/argentina-game-over-charles-mccarthy/
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Doctor en Bioquímica en el área de Genética y Biología Molecular del ADN.
6 年Very poor article, plagued with falsehoods. The author obviates on purpose the context in which our actual president took command of the country. Even accepting that there were make a lot of mistakes. What about our former president visiitng the courts every week?
Expert in IT Management & OM in Utilities
6 年Charles, you should update your profile and address very clearly that you are a profesional misleading writer and liar, and maybe you should tell whether or not you are being paid for your articles.
Partner at Richard, Brea & Ricciardi Lima
6 年Milagros Sala defending the "needy and poor"? Maldonado "peaceful demonstrator"??? Give us a break. Milagros Sala′s lieutenants were on TV retreiving millions in cash for the bank. She has luxury cars. Everybody in Jujuy would tell us about her constant threats and mafia behavior. Santiago Maldonado was a poor guy who mix with wrong people and end up abandoned by his own friends and drown in the river more than 15 experts validate that conclusion. "Mapuches" are not originary from argentina, and Maldonado was not defending "indigenous rights", he was just supporting his frined (Facundo Jones Huala, amongst them, receintly convicted of serious crimes in Chile. As for Macri, you might have a point in many of the facts your picturing in the article, and yet, if confidence means anything in the ways of the economy, I think it is unfair to say we are worst than we were when Macri won the elections. My 2 cents.
CEO @ Examedi | Building the biggest digital health ecosystem in the world
6 年It s unbeliveble how biassed is this article. I just lost 5 minutes of my time... Won t make that mistake again
Sad but true