Argentina: Band Aids on an Economy with a Growing Crisis

By Maylin Vidal on August 14, 2019

The Mauricio Macri Administration has announced a plan of measures aimed at benefitting over 17 million people through urgent patches in a market that is continuously buffeting  the Argentinean economy.

Seeking to calm down the distress in the country since last Monday when financial monopolies caused the dollar to climb from AR$ 47 to AR$ 65 and the Central Bank to inject part of its reserves to try to ease the situation, Macri and his team devised five strategic aims with a view to increase the depreciated minimum wage.

The dramatic drop in the Argentine Peso was directly connected to the thrashing that President Macri his alliance Juntos por el Cambio (Together for a Change). The new political project headed by Alberto Fernandez and the opposition figure, ex-president Cristina Fernandez beat Macri by a surprising 15 point difference. While the primaries mean little in and of themselves this one puts some serious questions into his re election possibilities.

Temporary benefits for workers, small and medium-sized enterprises, increasing social programs such as the Progresar scholarships, and freezing the oil prices for 90 days are the five topics aimed at stabilizing the situation.

But the dollar rose again regardless of the fact that he gave his prerecorded speech an hour before the markets opened showing that capitalist markets and and stop gap measures of a desperate president, beholden to the IMF, are two different

Concerning the workforce, the new plan of economic measures embraces the different types of workers: formal and informal, public and private, employees and self-employed.

For instance, there will be a 20 percent increase in the maximum monthly non-taxable amount for those who pay income taxes and a special reduction will be made in the tax paid by retirees and employees.

According to the Government, it would lead to an improvement of about AR$ 2,000 in the monthly salary (about USD $34) but it could be higher or lower depending on the income and type of family group.

They are also expecting to return part of the taxes already paid during the year: about AR$ 12,000 (USD $ 206) for married couple with two kids gaining AR$ 80,000 per month (almost USD $400).

Regarding employees, they would be freed from paying taxes in their jobs while self-employed will not pay taxes in their monthly fee for the next month. Two extra bonuses of AR$ 1000 each (about USD 20) will be paid for the unemployed during the next two months, or up to the time of the presidential election in October.

The Macri Administration also increased with a special bonus of AR$ 5,000 the wage of public employees, the armed forces, and federal security forces. The minimum wage is going to be increased as well for the second time this year.

About the small and medium-sized enterprises, permanent plans will be increased from six to ten; students who benefit from the Progresar scholarships in turn will have a 40 percent increase next month.

Argentinean citizens meanwhile expressed their reaction in the social media. Many of them say such solutions are arriving very late. With the hashtag #RiesgoMacri (or MacriRisk), others target the Government with strong memes, jokes, and criticism.

“The President was affected, tired and without sleep and this is why he gave a speech that pulverized your salary, made the markets blow up and put the country at the edge of a precipice. His explanation calmed us all,” commented Deputy Gabriela Cerruti in social media.

“Macri’s 2,000 pesos do not exist. Workers must win in the streets for this program: against the increasing inflation, emergency salary reconfiguration, a minimum wage of 30,000 pesos, monthly adjustment due to inflation, and eliminating tax revenues,” posted in turn Deputy and now vice-president nominee Romina del Pla.

While Marci’s attempted bribe to the workers, students, retirees, and small businesses reveals a level of desperation to get re elected. The big question will be whether all those people who rejected him at the polls last week will take the bait.

Source: Resumen Latinoamericano, translation North America bureau