Poverty soars in Argentina; Folha meets favela resident again 16 years later – 03/29/2023 – Market

A resident of the largest central slum in Buenos Aires, Villa 31, Olegário Valdemar Lago, 60, says life has only gotten worse in the past 16 years. “The favela grew upwards and we became poorer”, he says.

After having visited the place in 2007 in the electoral campaign that elected Cristina Kirchner to the Presidency, the Sheet found Lago in the same place where he lived at the time.

Over his house, as over hundreds of others, new floors were erected, forming a labyrinth of small buildings that reach five floors, which greatly increased the population density.

Since 2007, Villa 31 has practically doubled its population, and today has around 45,000 inhabitants. According to an official survey in 2018, the province of Buenos Aires had 1,600 of the 4,228 slums in the country. More than a quarter of them have emerged since 2010.

Lago works in front of his house as a locksmith, doing repairs for local clients. Work, he says, is increasingly scarce and residents can pay less and less. His wife is a street sweeper and the only adult son who still lives with him receives state aid for health reasons.

In a good month, the family gets 130,000 pesos (R$1,733 at the parallel exchange rate), counting the subsidy to the son. But the three incomes are insufficient to lift them out of poverty. They would have to earn at least 172,000 pesos (R$2,290) to leave this condition, according to Indec (National Institute of Statistics and Censuses, the Argentine IBGE) criteria.

Indec considers Argentines poor with individual monthly income below 57,302 pesos (R$774) and miserable, below 26,046 pesos (R$352). By this criterion, 43.1% of the population is poor (19.7 million) and 8.1%, miserable (3.7 million).

In the last ten years, Argentina’s poverty rate has jumped by 15 percentage points. According to the UCA Social Debt Observatory (Catholic University of Argentina), it would affect half of the country if the government did not subsidize in some way (with energy tariffs, transport and cash transfers) around 40% of households.

Even so, for comparison purposes, Argentina is less poor and unequal than Brazil. According to the calculation by economist Marcelo Neri, director of FGV Social, using the World Bank criteria for those who live on less than US$ 5.50 a day (R$ 28), Argentina would have 18.2% of its population in poverty ; Brazil, 29.6%.

The calculation takes into account the so-called PPP (purchasing power parity), a metric that removes distortions caused by exchange rates, different living costs and income.

Also adjusted by the PPP, Argentina’s per capita GDP is higher than Brazil’s: equivalent to US$21,500 and US$14,600, respectively, according to the World Bank.

Argentina also has a higher HDI (Human Development Index) than Brazil. The country is ranked 47th out of 191 countries by the United Nations Development Programme. Brazil, at 87th.

Argentina’s problem, however, is that the labor market has been rapidly becoming precarious, with an explosion of informal vacancies and formal jobs that do not pay the amounts to lift workers out of poverty (according to Indec’s criteria).

A few days ago, an agreement between employers’ and workers’ unions established a new staggered increase of 26.6% for the minimum wage. In June, the amount will reach 87,987 pesos (R$ 1,173) and will not cover the needs of a family of four (with two adults earning the minimum wage and two children).

With inflation rising between 6% and 7% per month, the new minimum, paid to formal workers, will also be devalued in June. But it is informality that advances in the country.

“Of the new jobs, 70% are informal; and we have more than 40% of formal workers in poverty, who are unable to buy a complete basic food basket”, says economist Dante Sica, former Minister of Production and Labor in the government by Mauricio Macri (2015-2019).

According to Daniel Imperial, 71, who operates in the slaughterhouse business, virtually all meat trade outside the large supermarket chains in Argentina takes place in the informal market, with informal workers.

“The taxes are terrible and, in the slaughterhouses, it is very difficult to control”, says Imperial. “Prices, on the other hand, go up every week. But it’s not just today, we’ve been through a very long crisis.”

According to an Argentine businessman working in the area of ​​foreign trade who prefers not to be named, the chronic lack of dollars in the country has led more and more companies to suffer from a shortage of imported products —affecting growth and better quality jobs.

He says that import authorizations have become arbitrary, complicating long-term planning.

According to Argentine economist Miguel Broda, the fact opened a new source of problems in the country. “With so many restrictions, there is more corruption to get dollars for imports. [o suborno] was 10%, now it costs at least 15%”, he says.

With the scarcity of dollars, it is agriculture, also a major employer in Argentina, which suffers most from taxes, especially on exports.

“The enormous amount of taxes takes away income from producers. We are forced to be stingy with our investments”, says Nicolás Pino, president of the Argentine Rural Society. “Instead of producing about 140 million tons [de grãos]we could be in the 200 million range.”

Pino calculates that, in the last 21 years, the State has collected around US$ 175 billion in taxes on agricultural exports. “The country did not improve during this period, quite the contrary”, he says.