Argentine govt struggling to reduce poverty, debt

Argentina has been in recession since the second half of 2018 with poverty reaching 35% and inflation now over 50%.

10 February 2020 | Economics

The government faces a huge challenge: improve economic activity without spending ... it's at a crossroads. - Matias Rajnerman, Chief economist: Ecolatina

Yemeli Ortega - With Argentina suffocated by debt, the government has turned to food stamps, price controls and popular markets to alleviate the suffering of its 10 million poor, but there are no guarantees these measures will stem the ravages of recession.

Maria Benitez is a mother of six whose husband finds short-term off-the-books work where he can. She struggles to put food on the table for her family.

For this housewife from the Benavides suburb of Buenos Aires, even buying the bare necessities is beyond her reach.

"You need a lot of money" just to shop in a supermarket, she said.

That's why she travelled to the nearby city of Tigre and queued for hours under the baking summer sun with a four-month-old baby in her arms to get a government card that will allow her to buy food.

New president

When assuming the presidency two months ago, centre-left Peronist Alberto Fernandez said "those with the least" would be his top priority.

Argentina has been in recession since the second half of 2018 with poverty reaching 35% of the population in the first quarter of 2019 and inflation now over 50%.

Fernandez reacted by freezing the price of fuel and certain public services, and controlling the price of various products while launching an application that allows users to locate the shops selling cheaper goods.

The government has also begun distributing 1.4 million electronic food cards worth up to 6 000 pesos (US$90) a month to spend on food, which should benefit more than two million people, including pregnant women, families without formal employment and with children under six years of age.

It's an "emergency measure," social development minister Daniel Arroyo told AFP. It will cost the government seven billion pesos a month and "will last all this year and certainly a lot longer."

According to Fernandez, sales of milk declined 30% during the 2015-19 government of his market-friendly liberal predecessor Mauricio Macri.

Beef consumption - a staple for Argentines - dropped 9.5% in 2019, according to official statistics.

‘Just in time’

For Fernando de la Fuente, a 28-year-old part-time labourer with a young son, the food card has come "just in time."

"That's what we need the most ... milk, beef, chicken. The essentials," he said after picking up his card in Lomas de Zamora, close to Buenos Aires.

"The government faces a huge challenge: improve economic activity without spending ... it's at a crossroads," said Matias Rajnerman, chief economist at the Ecolatina consultancy.

Rajnerman said the effectiveness of the emergency measures will depend on Argentina's ability to renegotiate its external debt, which stands at over 90 percent of GDP, because the government needs "a larger margin to spend" and earn "greater credibility" in the markets in order to reduce inflation.

IMF

The government is hoping to renegotiate US$195 billion out of a total debt of US$311 billion - according to the latest official figures - including a deeply unpopular US$44 billion bailout loan from the International Monetary Fund (IMF) in 2018.

According to the IMF, the government's measures "are heading in the direction of restoring macroeconomic stability and protecting the poor."

While the food cards and price freezes are aimed at easing the pain for consumers, popular markets are designed to boost small businesses.

The markets sell bread, vegetables, honey and jams with the idea of encouraging people to shop there rather than in supermarkets owned by big businesses with rich owners.

However, student Elizabeth Ortiz, a mother of two, says she goes "where you have the best prices."

"At this juncture, everything's delicately poised," said Rajnerman.

"It wouldn't be logical to hope for a significant reduction in poverty" over the coming months. – Nampa/AFP

Similar News

 

Growth is back, says Calle

2 days ago - 21 February 2020 | Economics

Augetto Graig Despite the legislative framework for public private partnerships (PPP) being in place, not a single such project is on the finance ministry books.“Why...

Covid-19: SA at ‘high risk’ of virus

2 days ago - 21 February 2020 | Economics

South Africa, Egypt and Algeria are at high risk of suffering from the deadly coronavirus, a study released Wednesday suggested.The Lancet medical journal reported that...

BoN: Coronavirus an ‘unfolding catastrophe’

2 days ago - 21 February 2020 | Economics

Jo-Maré Duddy - The coronavirus is a “catastrophe that is still unfolding” and it is too early to estimate its impact on Namibia, the governor...

Covid-19 slows Belt and Road push

2 days ago - 21 February 2020 | Economics

Keith Zhai and Matthew Tostevin - When president Xi Jinping made his first state visit this year to Myanmar and signed new infrastructure contracts, there...

Pandemic bond under pressure as virus spreads

2 days ago - 21 February 2020 | Economics

Karin Strohecker - A World Bank bond designed to deliver funding to help the world's poorest countries to tackle fast-spreading diseases has lost half its...

'Party's over,' Shiimi tells consumer

3 days ago - 20 February 2020 | Economics

The latest cut in interest rates is to help create a conducive business environment to boost economic growth, not to encourage more consumption-driven borrowing among...

China craving for Senegal peanuts rattles local business

3 days ago - 20 February 2020 | Economics

Large peanut orders from Chinese traders have cut Senegal's traditional selling season short this year, rewarding farmers with fat profits but leaving local buyers with...

Pompeo takes swipe at Beijingin Addis

3 days ago - 20 February 2020 | Economics

Robbie Corey-Boulet - US Secretary of State Mike Pompeo yesterday closed a three-nation Africa tour with a thinly-veiled swipe at China as he talked up...

Africa Briefs

3 days ago - 20 February 2020 | Economics

Zim threatens to withdraw mining licencesZimbabwe has given holders of mining concessions up to the end of April to pay US$11 million in outstanding annual...

D-Day for interest rate cut

4 days ago - 19 February 2020 | Economics

While the majority of analysts expect the Bank of Namibia (BoN) to drop its repo rate today, they also agree that lower interest rates are...

Latest News

Driving the world through knowledge...

2 days ago - 21 February 2020 | People

Ester Kamati Through dedication to his studies, Albin Jacobs matriculated and went on to secure a Bachelor of Arts degree from the University of Namibia....

Growth is back, says Calle

2 days ago - 21 February 2020 | Economics

Augetto Graig Despite the legislative framework for public private partnerships (PPP) being in place, not a single such project is on the finance ministry books.“Why...

A rock-hard year for Namdeb

2 days ago - 21 February 2020 | Business

Jo-Maré Duddy – Namdeb Holdings’ profitability tumbled by nearly a third last year with the local mining giant reporting an underlying EBITDA of US$121 million...

Fiercely determined

2 days ago - 21 February 2020 | People

Mariselle StofbergThe most important lesson that life has taught Maria Haufiku is that it does not owe you anything. “You must constantly strive for greatness...

No reprieve for Fishrot 6

2 days ago - 21 February 2020 | Justice

The so-called Fishrot Six yesterday returned to the Windhoek Magistrate's Court, which ordered that they be remanded in custody until 23 April to allow for...

Learners in dire straits

2 days ago - 21 February 2020 | Education

At Sinzogoro Combined School in the Kavango West Region, 130 learners are taught in tents where they sit on the ground to take notes. ...

More people at Fishcor must...

2 days ago - 21 February 2020 | Opinion

While a lot of light has been shone on the so-called Fishrot Six since the fishing quota bribery scandal unfolded late last year, the same...

Making it happen

2 days ago - 21 February 2020 | People

· Mariselle StofbergWindsor Markus believes that you have the power within you to take charge of your life and...

Covid-19: SA at ‘high risk’...

2 days ago - 21 February 2020 | Economics

South Africa, Egypt and Algeria are at high risk of suffering from the deadly coronavirus, a study released Wednesday suggested.The Lancet medical journal reported that...

Load More