‘We are a country of meat, but we only eat chicken’: the crisis in Argentina waiting for promises from Milei

[ad_1]

Argentina is divided over new president Javier Milei’s plans to resolve its economic crisis. Oriana and Samir say they both voted for Argentina’s new president, Javier Milei BBC Argentina was once one of the richest countries in the world — more than France or Germany. Much of this wealth was gained through beef exports, especially to Great Britain. But that was well over 100 years ago. Now, thanks to a deep economic crisis, it languishes around 70th place, according to the most recent data from the World Bank. And a growing number of people in the country simply cannot afford to eat beef raised from cattle that roam the fertile pastures known as the Pampas. They are people like Oriana and Samir, a young couple in their early 20s who live in a run-down neighborhood in the capital, Buenos Aires. “It’s very difficult,” says Oriana. “You constantly ask yourself, ‘How am I going to survive?’. We’re a beef country, but we only eat chicken because it’s cheaper.” Even chicken has become a luxury. Last year, inflation soared to 211%, the highest rate in three decades. In December alone, prices rose by more than 25%. The family shares a small apartment with their daughter, Chiara, and also with Samir’s parents and his brother. Paying the bills is a constant concern. The costs of food, housing, electricity and transport continue to rise steadily. Argentines strike against Javier Milei’s economic reforms Samir is an independent delivery driver, but the economic crisis has caused demand for his work to fall drastically. His earnings do not follow the increase in prices. Furthermore, he worries about the growing insecurity on the streets as people become increasingly desperate. “They can kill you just because of your cell phone,” he says. At least 40% of the population lives in poverty, according to the latest government data. But it is believed that the real percentage is even higher. Both Oriana and Samir voted for Argentina’s new president, Javier Milei, the radical right-wing libertarian who was elected with more than 55% of the vote. “He understands people’s problems,” says Samir. “I think he is exactly what Argentina needs to deal with inflation.” Others aren’t so sure. Claudio Paez was a successful businessman with a chain of confectionery and supermarkets, with 12 stores in total. Now he has just two, as store running costs and collapsing customer incomes have drastically reduced his earnings. And he expects things to get worse, not better: “If the economic problems continue for another three months, I will be in trouble and won’t be able to cover my expenses.” More and more people in Argentina have to improvise to survive. Not far from one of Cláudio’s stores, a small van is parked, its trunk full of trays of eggs. The cheap price, equivalent to R$5 for a dozen eggs, attracted a lot of people. Javier Milei speaks for the first time at the World Economic Forum in Davos The streets of Buenos Aires may still be filled with the ornate architecture of the country’s 19th century bonanza, but they are also full of street vendors, delivery app couriers and pirate taxis . Analysis of official figures carried out by the National University of Salta suggests that the informal sector currently represents almost half of the workforce in Argentina. Added to this, few people pay income tax thanks to a law approved by the previous government, shortly before the elections. This is bad news for a country that is essentially bankrupt and urgently needs to generate revenue. Argentina spends much more than it earns and already owes exorbitant sums: currently, around US$44 billion (R$218 billion) to the International Monetary Fund (IMF), which makes it the organization’s largest individual debtor. Milei says he has answers to the crisis. An economist by training, he firmly believes in unrestricted free markets and a smaller state. During the campaign, he attracted a lot of attention by waving a chainsaw in the air to signal his commitment to cost reduction. He also promised to do away with the Central Bank and completely get rid of the local currency – the peso – and replace it with the US dollar. Both ideas are currently on the back burner, especially because the government itself is very short of dollars. Instead, Milei devalued the peso by half to increase his competitiveness and reduced the number of government ministries by a similar proportion. With a series of proposals known as the “Omnibus” bill currently making its way through Congress, now it’s public spending’s turn. “For the last 30 years, we’ve been printing money like crazy, and that’s why we have such high inflation,” says political scientist Sergio Berensztein. “Now, for the first time, we have a president who understands the problem” The only solution, says Berensztein, is to try to balance the budget, something the government has promised to do by the end of this year. But it will be “difficult”, he adds. This is also a political issue, as well as an economic one. Milei may have a clear personal mandate from voters, but he does not have a majority in Congress. Not even close, actually. His party, Liberdade Avança, won just 15% of the seats in the 2021 legislative elections. In Davos, Milei states that he wants to have an ‘adult’ relationship with Brazil. Added to this is the powerful opposition of the country’s unions, which called a general strike last week and organized large demonstrations across the country. Tens of thousands of people took to the streets in noisy protest. Juan Cruz Díaz, from Grupo Cefeidas consultancy, fears that the impact of the proposed changes could be very harmful. “The majority of people who voted for Javier Milei wanted change,” he says. “But that doesn’t mean they support this libertarian approach to the economy and the state.” Next week, Congress will vote on Milei’s plan. There is no certainty that it will pass. In any case, there is no guarantee that the measures will make any difference to the inflation rate. And ultimately, that’s the only thing that matters to most people in the country. Díaz believes the president only has “a few months” to change the situation and for people to start feeling better. Milei’s political honeymoon is expected to be very short.

[ad_2]

Source link