It’s been a lot of days without English… and it is happening a challenging situation in Argentina. I would like to write about this situation in order to “document” these lines with the possibility to be read in the future…
In 2016, I wrote
that the money in Argentina should be used for doing the following things:
*to repair
the current streets.
*to invest
in new lights that reduce the darkness and improve the security
*to build new
infrastructure – new roads, new routes –
*to invest
in the development of a new public transportation system, that improves commuting.
Also,
people in Argentina were in a situation in which the inflation rate was completely
high (30%? At this time) and the prices of the basic products in the supermarket
were completely unstable.
I was convinced
at this moment that the situation should be better and I voted for changing: to
Mauricio Macri.
You can
read the article here https://estemosproximos.blogspot.com/2015/11/triunfo-macri.html
During
Macri’s government, he chose a gradual way in order to update the bill prices,
he kept the whole subsidies – and gave more subsidies -, the started the
reduction of the fiscal deficit and the inflation – stablishing specific objectives
for each year -, and he deleted the
restriction for buying dollars -the usual currency in which a lot of Argentinians
save money-.
The
situation was clear: if you continue your public account with deficit you need
to finance this deficit. The ways for financing these deficits are multiple:
increase taxes, print money, internal debt (left movements), or external debt
(right movements). Apart from that, there was a law approved in the Congress
stablishing conditions for the external investments in Argentina – investors
started to have restrictions to move out their money-. This situation caused that
a lot of investors sold their positions in argentinian pesos and moved out
their money out of Argentina. Consequently, the exchange rate ARSUSD started to
increase and the situation started to be
worse for the country. It was not possible to continue maintaining the same
objectives related to inflation and fiscal deficit – so the government started not
to be confident -. The ARSUSD skyrocketed, the inflation started to be higher
and uncontrollable, the Argentinian bonds slumped, the social climate in Argentina
felt really bad.
The
peronism was back in 2019, and a few months later COVID-19 started, and the
measures adopted were really terrible: more than 9 months without going out for
a walk or for working – if you don’t have the possibility to telework -. After
that, the restrictions continued for a long time. The following steps… peronism
measures: same problems, same solutions than in the past, same results than in
the past. Bad results… The accumulated inflation rate in Argentina in October 2023
is 120% (x4 if you compare with 2016…) and the forecast for the end of the year
is 185% (x6 if you compare with 2016…). With this terrible inflation rate, you
imagine that there are more poor people because the salaries weren’t be
adjusted with this high inflation rate… so the power consumption was lower.
Consequently, more insecurity because people don’t have money to buy food.
Consequently, poor education because people prioritize their basic needs (to
eat) and avoid other needs (education).
Unfortunately,
the situation in Argentina is completely terrible. And the solution wasn’t
Alberto Fernandez (peronism), Mauricio Macri (progressist), nor Cristina
Fernandez (peronism). We need a change, we need changes… and we need changes to
be applied faster (without graduality). The person that society chose was
Javier Milei (libertarian) and he is promising a lot of structural changes and
the most important thing: he communicated that the situation is completely critic
and the changes won’t be visible in the short term. So, be patient. The
reconstruction of Argentina is not easy. Don’t expect to show changes in the
short term, but the situation would be better.
To be continued…
