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Why Argentines are against the agreement of the International Monetary Fund?

President Mauricio Macri holds meetings with the IMF in New York while in Argentina they protest with a transport stoppage

No flights, trains, and buses: Argentina experienced the fourth general strike against the government of Mauricio Macri on September 25, putting him in a delicate position on the eve of his speech at the General Assembly of the United Nations (UN). Between the mobilizations of Monday and the transport strike were 36 hours of protests, an initiative called by the General Confederation of Workers (CGT), according to different national and international newspapers. The demonstration was joined by other important unions such as the Argentine Workers' Central Union (CTA) and leftist parties.

Leer en español: ¿Por qué protestan los argentinos contra el acuerdo del Fondo Monetario Internacional?

Unemployment arose mainly as a response to the economic measure that Macri announced before traveling to fulfill his political agenda. The "adjustment" consists of cutting public spending, raising the interest rate to 60% and negotiating again with the International Monetary Fund (IMF), as indicated by the newspaper El Comercio.

In June, President Macri asked for an advance payment of 50,000 million dollars from his reserve fund, now there is the talk of another additional loan, a deal that has not yet been consolidated but which will reach "the best possible agreement" in the coming days. This was stated by the Minister of Finance and Finance, Nicolás Dujovne, during a press conference from New York, according to the Argentine newspaper Perfil.

The economic support of the IMF seems to be a positive change that would generate confidence in foreign businessmen to invest in the South American country. So, why do Argentines protest?

Cut to public spending

The general secretary of the CTA, Dora Martínez, demonstrates against the "adjustment policies" of Macri because "they are against the pockets of pensioners, public health policies and to the detriment of the popular classes." To which the evident inflation is added with the increase in the price of the passage, electrical and gas services.

 

 

Economic recession

The debt with the International Monetary Fund would mean committing more than a couple of months of "recession," as Macri said in an interview with Bloomberg, the international financial news agency. The downward spiral in the economy is not new for Argentines, who cover with taxes and interests much of the financial gap caused by the fluctuation of the dollar since May when the peso began to fall. Since Mauricio Macri came to power at the end of 2015, public debt has been increasing systematically.

"The latest report from the Ministry of Finance recorded an increase of 3.3% in the first quarter of 2018, up to USD 331,481 million, or 59.3% of GDP. If the PBI Coupon is added (which only generates payment when the economic activity grows more than 3%), the total public debt is USD 345,409 million, 61.8% of the GDP "Infobae pointed out at the beginning of August with data from the Ministry of Finance. "When the United States raised its interest rates, the peso fell; when Donald Trump announced tariffs on aluminum, the peso fell; when Turkey went into crisis, the peso fell, "and so on, reports an article by the BBC.

Read also: Argentina: What saves Cristina Fernández de Kirchner from going to jail?

Added to this, another issue that increases the uncertainty of the Argentines is the surprise resignation of the president of the Central Bank of the Argentine Republic (BCRA), Luis Caputo. The resignation is due to "personal reasons, with the conviction that the new agreement with the International Monetary Fund will restore confidence in the fiscal, financial, monetary and exchange situation". The open letter of resignation was received by Macri on the day of the strike, before which Dujovne's right hand, Guido Sandleris, was positioned.

Despite the high participation in unemployment, another sector of the Argentine population ensures that the protest is a political tactic that takes advantage of the inflation that weighs in the worker's pocket to question the economic measures of Macri. "At this moment we are going through a crisis and there is a collective sacrifice, with the efforts of businessmen, for the applications of retentions, and workers, for the fall in consumption. It was not the opportune moment to make a strike, "said Dante Sica, Minister of Production and Labor, in the news program Desde el Llano. He added that the strike responds to "more political ends than anything else," as quoted in the Argentine newspaper Todo Noticias.

These are not easy times for Macri. During his stay in New York, the President of the Central Bank resigned and a workers' strike was held against his administration , which causes significant economic losses at a vulnerable time for Argentina. That without even worrying about his diplomatic role in the UN General Assembly and the pressure to close an agreement with Christine Lagarde, head of the IMF. Before the massive strike, Macri said he is willing to open a dialogue with the workers' unions to try to mitigate tensions with the sector. "Macri is predisposed to dialogue with the CGT, but will not change any parameter already agreed upon Lagarde," Infobae said.

 

LatinAmerican Post | María de los Ángeles Rubio

Translated from: ' Macri pide mas plata y los argentinos desesperan'

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