Argentina’s honeymoon with Macri is over
Argentina’s honeymoon with Macri is over
Roberto Lampa 13 June 2016
In an article last October, published by DemocraciaAbierta, I analysed the Argentine presidential elections, highlighting how, in the case of a victory for Mauricio Macri, his economic relations agenda both neoliberal and restorative of pre-kirchnerismo, on the one hand, and the resilience of political, social and trade union actors, on the other, would represent two central aspects when evaluating the start of his mandate.
The PRO party's first six months in office seem to confirm the validity of this reading.
First, it is indisputable that the economic policies implemented since last 11th of December have an explicitly classist character and are working to restore the neoliberal orthodoxy of the 1990s: an almost 60% appreciation of the exchange rate; an elimination of state subsidies for electricity, water, gas and public transport; mass layoffs in the public sector; the closure of the Pro.Cre.Ar aid programme for first home-buyers; the closure of the Progres.Ar and Pro.For scholarship programmes for secondary and university study; austerity policies and inflation-targeting policies from the central bank, among others. And from the other side: an (almost) complete elimination of export taxes for agriculture and mega-mining; a removal of foreign currency purchase restrictions and an increase to a five million dollar monthly individual purchase limit; lump sum payments to vulture funds (including huge commissions for the banks involved in the operation); transfers to the banking sector both via differential interest rates (fixing deposit and lending rates is now completely deregulated) and by dollar futures (the strong increase in the exchange rate decided in December triggered the payment of securities linked to dollar futures issued by the Central Bank during the previous administration).
The predictable results of such "shock therapy" have been a tremendous transfer of wealth to the richest sectors of the country, and a catastrophic setback for salaried workers and low-income sectors. Despite the difficulties that we economists encounter because of statistical lockout imposed by the government on the National Institute of Statistics and Census (Instituto Nacional de Estadística y Censos, INDEC) and the Ministry of Labour, various points have been observed: a significant increase in inflation (8% in April, the highest in the last 13 years); a sharp rise in unemployment (up until the 30th of April, there were 60,024 layoffs in the public sector and 64,762 in the private) and a huge increase in poverty (in which, according to a report from the private Universidad Católica Argentina, 29% of the population found themselves in 2015, a proportion which then increased to 34.5% in the first quarter of 2016, an increase of 1.4 million people).
If economic policies implemented by the government and its results were predictable, the initial reaction of other political actors (the parliamentary opposition - which has its own quorum in both houses - unions and social movements) during the first months of government has been a surprise. Not only have the actions of Macri not been criticised, but they have been justified, often defined as a necessary readjustment or the country's economy.
More:
https://www.opendemocracy.net/democraciaabierta/roberto-lampa/argentina-s-honeymoon-with-macri-is-over
